There’s a bill sitting on Capitol Hill but it has been having trouble becoming a law. This after intense negotiations for nearly a year. According to Senator Joe Manchin of West Virginia, the ‘Build Back Better Bill’ is getting a big NO from him. Mr. Manchin let loose on West Virginia radio explaining his decision.
"They drove some things, and they put some things out that were absolutely inexcusable. They know what it is, and that's it.
This is not the president -- this is staff.. They drove some things that are absolutely in excusable. I just got to the wit's end of what happened.
They figured surely to God we can move one person. We surely can badger and beat one person up. Surely we can get enough protesters to make that person uncomfortable enough that they'll just say, 'OK I'll vote for anything. Well, guess what? I'm from West Virginia. I'm not from where they're from and they can just beat the living crap out of people and think they'll be submissive, period."
Apparently Joe Biden’s staff alienated the senator from West Virginia and this caused him great consternation. This seems to be a regular theme of the Biden presidency. The staff is packed with hardcore lefties who burn bridges in an attempt to bring unity. It’s a feature not a bug. When they don’t get their way, they lash out claiming the ‘end of democracy’ which is laughable.
Joe Manchin has been clear from the beginning about what needed to happen to get this bill passed. Economist blogger Mish covered this really well here. A quick summary;
Manchin's Demand List
$1.7 Trillion fully paid budget up from $1.5 Trillion - Position since April
Means-testing child-care subsidies and the child tax credit - Position since April
Concerned over inflation - Position since April
No timeline gimmicks of expiring programs to make a fake budget - Position since April
No paid family leave - Position since April
No new entitlements that aren’t means-tested or don’t require work - Position since April
In addition to the above, Manchin will not go along with proposals to change Parliamentary rules, pack the court, or end the filibuster. Those have been his position forever.
It continues to be a shock to the far left that Manchin has principles and will stand on them. He has been adamant that he has no desire to add to the deficit. However, the Congressional Budget Office (CBO) figured this bill would add $1.75 trillion to it. This is after all the budgetary gimmicks were added. In truth, this would likely add $3-5 trillion over 10 years to the always rising government monetary shortfall.
With his ‘Build Back Better’ plan on the ropes and Covid cases rising, Joe Biden is going to address the nation tomorrow. One can only wonder what he might or might not say. It’s obvious the market is extremely concerned about a new wave of government mandated lock-downs.
At the beginning of his presidency, Joe had one poll in his favor. The public was convinced that Ol’ Joe would be able to do a better job fighting Covid than Trump did. As time has gone on, this virus has done what all viruses do, become more transmissible and less deadly. The jabs, masks, social distancing, and all the other voodoo has done nothing to stop this virus from continuing to plug along. As more are becoming aware of this, Joe is beginning to poll worse in the only category that was a bright spot for him. His vaccine mandates have been especially toxic to his poll numbers.
This is another topic that Biden may touch on during his address. Two of his three vaccine mandates are in the process of withering and dying in the court system. His OSHA mandate, however, has been tossed around and is now on track to land at the Supreme Court’s feet. Earlier this year, the Fifth Circuit Court of Appeals issued a stay of the Emergency Temporary Standard issued by OSHA. Now the Sixth Circuit Court has dissolved that stay. This paves the way for it to run straight to the highest court in the land.
This ruling would have a big impact on employment figures, therefore it will be of great importance to the stock market. Many have declared the vaccine the hill that they are willing to die on. This would have a big impact on large businesses. We could see many leaving employers of 100 or more for smaller businesses. This would magnify the current shortages and bottlenecks in the US economy. It could also cause the Fed to ride to the rescue once more, providing endless liquidity to the economy. The Fed has pegged the taper to employment. If employment stagnates because many leave their jobs for smaller sized employers, this could put a real wrench in the Fed’s projections.
These things are weighing heavily on Santa. Will he pull through with a rally to close out the year? It is starting to look increasingly doubtful. However, the previous data on margin use was still elevated and the yield curve is still in positive territory.
Money stock figures come out next week and should clarify how the market will react. I’m concerned that Santa has a different message for Wall Street this year.