AGF Management : Infrastructure Bills Are on Life Support — But Talks Halt for Congressional Baseball Game

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September 30, 2021

Infrastructure Bills Are on Life Support -
But Talks Halt for Congressional Baseball Game
September 30, 2021
YOU CAN'T MAKE THIS UP: With President Biden's agenda in jeopardy and a default crisis fast approaching, many of the key players stopped negotiating last night and played in the Congressional baseball game.

THE TONE-DEAF LAWMAKERS will get back to work today, probably passing a short-term budget extension lasting through Dec. 3 to keep the government open. There's an 80% chance that a shutdown will be avoided before the new fiscal year begins at 12:01 tomorrow morning.

THE BIG DRAMA TODAY ON CAPITOL HILL will be in the House, where Nancy Pelosi apparently doesn't have the votes to pass Biden's two infrastructure bills. Her own members - the progressive left - would rather kill the $1 trillion measure if it's not combined with the bloated $3.5 billion social spending package.

WILL PELOSI EVEN BRING THE BILLS TO A VOTE? She's famous for not allowing a vote on measures that are destined to fail. These two bills may have gotten a death blow yesterday from - who else? - Joe Manchin, the erratic West Virginia moderate.

THE BIDEN PLANS ARE "FISCAL INSANITY," Manchin declared yesterday, infuriating virtually all Democrats in Congress. Manchin demanded fundamental tax reform at this late stage, and he still refused to reveal his top-line spending goal for the big bill. Is it under $2 trillion? No one knows, and many of his critics think Manchin's real number is zero.

MEANWHILE, THERE WAS NO PROGRESS YESTERDAY on a debt ceiling deal. Now that Janet Yellen has set a default target date of Oct. 18, Congress has three weeks to dither until that deadline arrives. Default still looks unlikely; the Federal Reserve has three weeks to prepare emergency measures.

THE DYSFUNCTION IN CONGRESS IS SO ACUTE that it's possible the Fed will have to wait for fiscal clarity before beginning its tapering of asset purchases. There will be enormous pressure on Jerome Powell, who suddenly isn't a shoo-in for a second term as chairman.

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