Trump and Pelosi Agree: Another Massive Aid Bill Is Coming
Author: Greg Valliere
April 7, 2020
DESPITE GLITCHES IN GETTING MONEY to individuals and businesses, congressional Democrats and President Trump are gung-ho on passing another emergency bill later this spring that may pump another $2 trillion into the staggering economy.
THE NEWS IS VERY ENCOURAGING on new infections slowing in Europe and New York, but Washington will have to do more.
THERE WILL BE OBSTACLES to this next measure compared to the one that sailed through Congress in late March, because deficit hawks are aghast that red ink could exceed $4 trillion this year and next, and because most members of Congress are in no rush to return to Washington, where new virus infections have spiked in recent days.
BUT THE NEED FOR MORE STIMULUS is so acute that Nancy Pelosi reportedly wants to streamline the next measure, excluding anything major on infrastructure or any “Green New Deal” provisions. That may have to wait for a fifth bill in mid-summer.
THE KEY PLAYER PUSHING FOR ANOTHER BILL is Trump. He gets angry whenever anyone suggests that small business aid or government checks are stalled; he’s determined to send more Washington money to the country. Pelosi agrees.
THE DEMOCRATS WILL PUSH HARD for more unemployment aid, another round of direct checks, plus aid to health care workers, first responders, hospitals and education. And there’s a consensus that state and local governments need more assistance, with something significant for small cities and towns. Trump basically agrees on these provisions.
CONGRESSIONAL REPUBLICANS, led by Mitch McConnell, grudgingly concede that another bill is necessary; they worry about exploding deficits. But they have no choice but to move on another bill; quite clearly, aid needs to be expanded despite the chaotic start to the small business loan program.
LAWMAKERS WHO WANT TO GO SLOW point to the rocky start to business loans, but we think by late April the glitches will be ironed out, paving the way for moving another bill in late May.
EVEN AS THE LOCK-DOWN BEGINS TO EASE in a month or so, there’s growing anxiety in Washington that a horrible second quarter GDP rate will be followed by a halting, mediocre recovery in the second half, with unemployment still over 10% for the rest of the year.
SO WE REITERATE OUR MANTRA: Money is no object, the sky’s the limit for both fiscal and monetary policy. More aid will come this summer.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI is registered as a portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2020 AGF Management Limited. All rights reserved.