Back to DC

Hey Influence Traders,

Andrew Giovinazzi and I went deep on energy, Virginia and Brazil this week.

We explained why forces in play have caused a seismic shift in the energy sector and how you can benefit from it.

Even the New York Times admitted that “Coal Stocks Rise, Even as the Planet Warms.

We also discussed why all eyes, from the White House to the Hill, are on the Virginia’s governor’s race.

Finally, we told you why political strife in Brazil is leading to investment opportunities.

If you missed out, Capitol Gains membership is now closed.

But it will be back one day … maybe.

Back to DC

Now we go back to DC where the talks on the spending bills are … still stalled.

Earlier this week saw a bunch of announcements from the White House and the Democrat leadership from both houses that a deal was at hand.

But that came to a screeching halt on Wednesday.

Part of that is the Virginia gubernatorial race.

The race between Democrat Terry McAuliffe and Republican Glen Youngkin is tightening.

An easy win for McAuliffe, a former governor of the state, has now become a fight.

Rather than distance himself from a down-ballot race, the president has tied himself increasingly to it.

The race has become a litmus test on Biden’s policies ahead of the midterm elections.

Joe Biden and Democrats can’t afford a loss.

That is causing some Dems to put the brakes on spending talks to gauge the outcome of that race.

If they lose, they will negotiate down the spending bills with a straight face.

If they win, they will declare it a referendum on their policies and press last-minute for a meatier bill.

Manchin Tax

The other issue is Joe Manchin from West Virginia.

He successfully got some green energy provisions knocked out of the mega-spending bill.

He then helped negotiate some of the tax provisions, including the Billionaire’s tax, which seemed to have broad Dem support (and it polled well, which the Dems love to see).

Dem leadership thought they finally had him on board.

Heck, he spent the weekend with President Biden in Wilmington, Del., and agreed that Dems might have to take action to raise the debt ceiling on their own.

Well, it turns out that he’s not onboard.

Manchin did a 180 on the Billionaire’s tax and declared it to be divisive.

Pelosi, Schumer, et. al, are not happy.

What Now?

Back to the drawing board on some issues.

The progressive wing of the party is done cutting programs … they feel they’ve given up enough.

One idea being floated is to keep as many programs as possible but just limit the number of years they will be in force as a means to keep down the costs.

That’s a solid strategy since we all know that once a major government program goes into effect it is almost impossible to stop or unwind.

If the Dems go that route, they will certainly draw the ire of Republicans, which could further dent the left’s armor.

Wednesday morning started with paid family leave, climate change provisions, Medicare and Medicaid expansions and a tax on billionaires as the remaining open items.

By the end of the day, Dems had already caved on including the paid family and paid medical leave provisions (something dear to Bernie Sander’s heart) and Manchin appears to be throwing a roadblock at the billionaire’s tax.

The White House said that no matter what, it wants to see at least $500 billion in climate provisions in the bill.

Infrastructure Bill

The infrastructure bill has taken a back seat to the spending proposal.

The uncertainty of the spending bill is not helping the bridge-and-tunnel bill’s prospects.

Many Dems believe that passing the infrastructure bill could help Dem gubernatorial candidates, but the progressive wing is doubling down on opposing the popular public works bill until a larger benefits package is finalized.

Biden is heading overseas for a climate meeting this week and wanted the bill wrapped up prior.

It’s not looking good.

Nothing is easy in DC!

But we make it easy to understand.

Cutting Through the Noise for You.

Frank

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.