- Washington politics will dominate market attention through early January
- Results of Tuesday’s Georgia Senate seat run-off elections are expected to be delayed
- McConnell is in the process of shooting down $2,000 stimulus checks
Washington politics will dominate market attention through early January — Washington politics will dominate market attention through early January. The markets are closely watching whether Senate Majority Leader McConnell has any serious plan to push a $2,000 stimulus check bill through the Senate. The markets are also waiting for next Tuesday’s Georgia Senate seat run-off elections and next Wednesday’s certification by Congress of the Presidential election results.
The current session of Congress ends at noon this Sunday (Jan 3), at which time any unfinished legislation will die. The newly-elected Congress will take over on Sunday, with Republicans still having a slight majority until the results of the Georgia Senate seat run-off elections are finalized.
Democrats must win both Georgia Senate seat elections in order to achieve a 50-50 split in the Senate. Vice President-Elect Harris would then cast the tie-breaker vote in favor of the Democrats. In that case, Democrats would have full control of Washington and would be able to pass at least part of the blue-wave agenda.
Even with a 50-50 split in the Senate and a tie-breaker vote by Vice President-Elect Harris, Democrats apparently would still not enough votes to do away with the Senate filibuster since Democratic Senator Manchin (D-WV) has already said he would not support a vote to eliminate the filibuster. However, Democrats could still pass tax legislation through the budget reconciliation process in the Senate, which bypasses the filibuster process and requires only a majority vote in the Senate.
On the other hand, if Republicans win at least one of the Georgia Senate seats, then Republicans will retain their majority control of the Senate. In that case, Senate Majority Leader McConnell would be in the driver’s seat as to whether he allows any of the Biden Administration’s legislative agenda to come up for a vote in the Senate. Mr. McConnell is not likely to be shy about frustrating the Democratic agenda, meaning not much would get done in the next two years.
Results of Tuesday’s Georgia Senate seat run-off elections are expected to be delayed — The results of Tuesday’s two Georgia Senate seat run-off elections are not expected to be available for possibly a matter of days because of slow counting and because the polls suggest that both races will be very close. Also, there will surely be lawsuits and demands for recounts.
In the November 3 election, media outlets did not call Georgia for Joe Biden for 10 days, and the certification of the results took another week. There were then recounts and lawsuits.
Early voting has been very heavy for the Georgia Senate races. More than 2.5 million people have already voted in the election between early in-person voting (1.7 million) and mail-in ballots (over 850,000), according to the U.S. Elections Projects. The early voting accounts for 63% of the 4.0 million people that voted in the November 3 election.
The polls for the two elections are very tight and are within the margin of error. The latest poll-of-polls data from FiveThirtyEight shows that Republican Perdue is slightly ahead of Democrat Ossoff by 48.5-47.5%, respectively. However, in the other race, Democrat Warnock is ahead of Republican Loeffler by 49.2%-47.3%.
The betting odds at PredictIt.org, for whatever they are worth, remain little changed at 67% for Republican control of the Senate and 36% for Democratic control.
McConnell is in the process of shooting down $2,000 stimulus checks — Senate Majority Leader McConnell appears to have no intention of allowing a bill to pass the Senate that would give $2,000 stimulus checks. Mr. McConnell said on the Senate floor Wednesday said that there is “no realistic path” for a standalone $2,000 stimulus check bill to “quickly pass the Senate.”
Mr. McConnell on Tuesday released a bill that combines President Trump’s three main demands, i.e., the $2,000 stimulus checks, a repeal of the liability shield for social media companies, and an investigation of his allegation of widespread fraud in the November election. The combination of those measures in one bill ensures that it would have no chance of passing the Senate since the last two measures are opposed by Democrats and $2,000 stimulus checks are opposed by most Republican Senators.
An increase in the stimulus checks to $2,000 would cost another $435 billion, adding to the national debt and adding to the $164 billion cost of the $600 checks, according to the Committee for a Responsible Federal Budget. Mr. McConnell allowed the pandemic aid bill to rise to $900 billion from his previous ceiling of $500 billion. However, it seems unlikely that he would allow the effective cost of the pandemic bill to rise by another $435 billion to $1.335 trillion, regardless of President Trump’s demands.
Meanwhile, Mr. McConnell is maneuvering for the Senate to override President Trump’s veto of the $741 billion National Defense Authorization Act (NDAA). That Act provides discretionary spending to the Defense Department. The House on Monday already overcame Mr. Trump’s veto with a vote of 275-134. A Senate vote could be delayed until as late as Sunday because Vermont Senator Bernie Sanders is slowing down the process by demanding a stand-alone vote on $2,000 stimulus checks. However, the Senate is expected to override the veto by Sunday, allowing the NDAA to become law before the current session of Congress ends on Sunday.
