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The Threat That May Break the Budget Logjam; Two Interesting New Polls

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The Threat That May Break the Budget Logjam; Two Interesting New Polls

Author: Greg Valliere

September 21, 2023

THE “HAIL MARY” OPTION that we wrote about yesterday is gaining support in both parties, and it just might avoid a lengthy government shutdown. There’s a long way to go — and a shutdown of a few weeks is still possible as details are ironed out — but Democrats are increasingly willing to bail out House Speaker Kevin McCarthy.

THE REFUSAL OF A DOZEN HOUSE RADICALS to consider virtually any deal has exasperated the GOP leadership to the point where the majority will consider a deal in which enough House Democrats will provide the winning votes for a budget deal — and to keep McCarthy in power.

HOUSE MINORITY LEADER Hakim Jeffries is keeping his powder dry. The New York Democrat has encouraged his members to talk in private with Republicans on a budget deal that would protect most of the Democrats’ spending priorities.

NOT SURPRISINGLY, THE THREAT of a spending deal with the Democrats has outraged many House Republicans, so they showed signs of moving yesterday on a deal — any deal — that gets a budget package to the Senate, which would begin a “ping pong” process in which each house bats plans back and forth until there’s a deal. That could take a while.

THERE ARE PLENTY OF OBSTACLES: Would McCarthy do virtually anything to keep his job? Yes. Could the final bill include deep spending cuts? Not necessarily. Will a final bill include a major new chunk of aid for Ukraine? Probably. Could all of this fall apart? For sure.

WHAT TO WATCH FOR: McCarthy will attempt to move the defense spending bill late today. If it passes, that will be a sign that the gridlock may be breaking. But getting a final bill done this fall will be a heavy lift, probably requiring McCarthy to do the unthinkable — appeal for help from the opposing party.
* * * *
TWO INTERESTING POLLS THIS WEEK: First came a CNN poll that showed 51% of respondents believe the U.S. has done enough for Ukraine — the first major poll that has shown a majority of Americans are opposed to more aid. We still think more aid will be approved, but Ukraine will have to show progress soon on the battlefield.

SECOND, A POLL IN NEW HAMPSHIRE shows Donald Trump comfortably ahead for the GOP nomination, no surprise there, but it was very bad news for Ron DeSantis. The Florida governor has dropped by 13 points since July and now is in a four-way tie at about 10 points for second place, with Vivek Ramaswamy, Niki Haley and Chris Christie.

COULD ANY REPUBLICAN SERIOUSLY CHALLENGE TRUMP? There are two modest openings: first, can he win a general election? It won’t be easy, that will be a major theme for his opponents, who will argue that Trump cannot win a general election.

SECOND, Trump may have miscalculated in the past week on the issue of abortion. He knows that winning a general election requires support from moderates, so he criticized bans on abortions at six weeks — too extreme, he said. This infuriated staunch anti-abortion Republians in Iowa, where Trump faces a surprisingly tough race.

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The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

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Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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