The House of Representative’s $3.5 trillion proposed federal spending plan that included massive tax hikes has reportedly died.
According to a report by ValueWalk, West Virginia Senator Joe Manchin made it crystal clear that he cannot support this spending bill unless it is cut to $1.5 trillion.
This demand by Manchin is forcing the House of Representatives to now pick whether or not it wants to pay for extended childcare, green energy incentives, or free community college.
As a result, the proposed tax hikes and spending plans are collapsing.
The report also says that of all the proposed spending plans, extended childcare is most likely to survive, since approximately 2 million of the 5+ million jobs that have been lost due to the Covid-19 pandemic are attributable to working mothers, who had to take care of their kids when schools closed.
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Some of the jobs lost are now permanent due to productivity gains that are not going away. These 5+ million lost jobs also have impacted the Fed, since they are gradually concluding that their low-interest-rate policies are becoming increasingly ineffective at new job creation.
Raising taxes in the midst of a decelerating economy (the Atlanta Fed is now estimating 3.7% annual third-quarter GDP growth) that is also characterized by surging inflation is also political suicide, so it will be interesting if any of the proposed spending plans and related tax increases will get passed.
“Welcome to quarter-end window dressing. For the next couple of weeks, professional money managers will be making their portfolios “pretty,” by loading up on companies with strong third-quarter forecasted sales and earnings.
At the end of September, we should get a free “pop” from equally-weighted ETFs that systematically realign their portfolios every 90 days.
So even though September is a seasonally weak month, the second half of September is a good month for our powerful growth stock,” wrote Louis Navellier, Chairman, and Founder of Navellier & Associates in Reno, Nevada.
However, on Monday, President Joe Biden went to the West to hold out the wildfires burning across the region as an argument for his $3.5 trillion rebuilding plans, calling year-round fires and other extreme weather a climate change reality the nation can no longer ignore.