In a note last week entitled “Obamerica: The Honeymoon is Over” we highlighted President Obama’s inability to get a single vote from Republicans in the House for the stimulus bills despite a week of vigorous lobbying. Nonetheless, given the Democratic majority, the bill passed and is now in the Senate, where its future, at least in the current form, seems questionable.
Senate Republican Leader Mitch McConnell made a statement Sunday implying the bill would go down in defeat if it wasn’t stripped of unnecessary spending and focused more on housing issues and taxes. McConnell also went on to specifically challenge Obama’s ability to manage his Democratic colleagues in Congress when he said in an interview:
"I think it may be time ... for the president to kind of get a hold of these Democrats in the Senate and the House, who have rather significant majorities, and shake them a little bit and say, “Look, let's do this the right way”. I can't believe that the president isn't embarrassed about the products that have been produced so far."
While President Obama and Vice President Biden seem to be posturing to suggest they will get at least some Republican support for the bill in the Senate, the Republican Party appears very well organized in opposition to this bill. Senator Jon Kyl from Arizona, who is the No. 2 Republican Senate, backed up McConnell with even stronger words when he stated:
“When I stay start from scratch, what I mean is that the basic approach of this bill, we believe, is wrong.”
Given that the Republicans currently have 41 seats in the Senate, they do have the ability to stop the bill, so it is likely that the bill will change in form, and perhaps dramatically. Ultimately, the investment implications are that approval of the bill will likely be pushed out and with it the duration of the investment catalyst(s) relating to the bill.
Interestingly, the Republicans are continuing to focus on creating the image that President Obama is unable to manage his former Democratic colleagues in the House. They are placing the blame on Democrats in the House for the impractical and unwieldy nature of the bill, but implying that Obama should have managed them better in the process.
That may be partially true, but the reality is that President Obama, due to no action of his own, has in both Nancy Pelosi and Harry Reid two teammates that seem somewhat unwilling to create legislation that would garner bipartisan support. In Reid specifically, President Obama also has a Senate Leader that seems unwilling to cede much influence to the President, which was highlighted by his January 9th comment,”I don’t work for Obama”. Indeed.
Daryl G. Jones