Hey Influence Traders,
The cold war between the U.S. and the U.S.S.R. was marked by proxy wars being fought outside their borders.
The Hill is looking much the same today, where a fierce Senate battle between radical Bernie Sanders and moderate Democrats Joe Manchin and Krysten Sinema over spending levels is being fought across the Capitol in the House.
This battle could dictate whether Speaker Pelosi brings the infrastructure bill forward for a vote this week.
I want to see a resolution so we can get back to trading stocks!
The Landscape
Sanders, Sinema, and Manchin are all reaching out to House allies to support their positions.
Sanders initially floated a $6 trillion target for the reconciliation bill, which has been whittled down to $3.5 trillion in the budget resolution that passed both the Senate and House.
The centrists want to pass the infrastructure bill to notch a win, and then want to turn to the reconciliation bill, which they feel is bloated.
This is causing Pelosi and Democratic leaders to confront two unpleasant scenarios: either stick with the plan to bring the infrastructure bill to the floor, where liberals are likely to kill it, or delay it again, and infuriate the moderates.
Liberal Position
Sanders is pressing his position hard – maintaining that the reconciliation bill should spend $3.5 trillion “at a minimum.”
Sanders held a conference call with House progressives on Tuesday to urge them to defeat the $1 trillion bipartisan infrastructure bill, which Manchin and Sinema spent months crafting.
Sanders and other progressive Democratic senators believe their House allies will hold firm and stop the bipartisan infrastructure package from passing this week.
“They will not pass it on Thursday. Enough of the House members understand that they would be gutting the Build Back Better agenda,” said a Democratic lawmaker familiar with the internal discussions.
Liberals in the House are dutifully lining up to sink the infrastructure proposal, demanding that Democrats in the House, Senate, and White House first reach an agreement on the boondoggle “human” infrastructure bill.
Rep. Jayapal, the head of the 95-person strong Congressional Progressive Caucus, stated that “We already put out our vision, and we’re going to stick to that vision.”
Centrist Position
Centrist Democrats say the top-line spending number for the reconciliation bill is likely to fall below $3.5 trillion.
Manchin restated that “I can’t support $3.5 trillion more in spending when we have already spent $5.4 trillion since last March.”
“At some point, all of us, regardless of party, must ask the simple question — how much is enough?” he said.
He fired a broadside at his progressive colleagues arguing that the trillions in planned spending is “fiscal insanity.”
Path Forward
Word on K-Street is that bandaids are about to come out.
The House and Senate are likely to pass a short-term funding bill to fund the government through Dec. 3.
Dem leadership wants to get the infrastructure bill passed to get a Biden win.
That means that they need to whittle down the spending bill further to find the sweet spot that will garner centrist support.
That is going to piss off progressives who already believe they’ve compromised.
But Dems need to win over Manchin and Sinema to get 50 votes in the Senate.
In an attempt to create party unity, Rep. Ilhan Omar, ever the bridge builder, when asked about Manchin and Sinema stated that “it is saddening to see them use Republican talking points. We obviously didn’t envision having Republicans as part of our party.”
Old Nancy has her work cut out for her.
Regardless of what’s happening in DC or elsewhere, trading guru Andrew Giovinazzi has been making #powermoves in the Capitol Gaines portfolio.
The live Power Moves Portfolio trade log is here.
Cutting Through the Noise for You.
Frank
