AGF Management: Return Immigration as Hot Topic, Blocks Covid Bill

IN A COMPLICATED LEGISLATIVE DISPUTE, a relatively modest Covid relief bill has stalled, possibly for weeks, due to renewed friction in Congress over illegal immigration. This maneuver seems trivial, frankly, in light of the carnage in Ukraine, but it sets the tone for Congress for the rest of this session.

BOTH PARTIES ARE FURIOUSLY POSTURING ahead of the fall election, and Democrats will have reason to cheer later today as Ketanji Brown Jackson wins Supreme Court confirmation. But Democrats were hoping to enact a Covid bill this week, and that won’t happen.

A $10 BILLION COVID AID BILL — small potatoes in this age of trillion-dollar spending deals — is stalled as Congress begins a two-week recess tomorrow (a priority major is a dozen weeks of vacation by early October, which will make it difficult for Congress to resolve time-consuming issues such as tax hikes).

THE COVID AID BILL would increase funding for treatment, vaccines and testing, which may be needed in light of an outbreak of variants and a sudden
resurgence of the virus here in Washington. Several cabinet secretaries and members of Congress have been infected in recent days, likely with the new BA.2 variant.

COVID BILL STALLS as Republicans demand a vote to preserve President Trump’s immigration restrictions. GOP lawmakers know that the threat of increased illegal immigration is a huge election problem for them; even some Democrats facing tough re-election battles are reluctant to ease so-called Title 42 restrictions that curb illegal immigration.

[ACTUALLY, the extremely tight labor market, with workers impossible to find, would
benefit from looser immigration policies, but that’s another story.]

Bitter controversies will dominate Congress over the coming months as members consider the fall elections. Yesterday’s public flogging of oil industry executives at a congressional hearing was a glimpse into another major theme – whether the industry is guilty of inflating prices, despite evidence to the contrary.

One of the few areas of agreement will be increased Pentagon spending – far more than President Biden has proposed – in the wake of the war in Ukraine and China’s huge buildup of sophisticated new weapons. . More US shipbuilding will be a major priority.

AS FOR OTHER SPENDING, the growth rate could weaken after last year’s explosion, but it would be inaccurate to say that fiscal policy is becoming restrictive; it will simply be less expensive. GOP victories in November could reinforce a trend toward less accommodative spending (except on defense).

COVID, MEANWHILE, HAS NOT BEEN CRUSHED, as the US nears one million deaths, new variants are breaking out in Europe and China faces a major outbreak. The virus may kill and hospitalize far fewer people than a year ago, but it is still hiding, infecting vulnerable people.

The views expressed in this blog are those of the author and do not necessarily represent the views of AGF, its subsidiaries or any of its affiliates, funds or investment strategies.

The opinions expressed in this blog are provided as a general source of information based on information available at the time of publication and should not be considered personal investment advice or an offer or solicitation to buy and/or sale of securities. Speculations or opinions expressed about future events, such as market or economic conditions, corporate or securities performance, or other projections represent the opinions of the author and do not necessarily represent the point of view of AGF, its subsidiaries or any of its affiliates, funds or investment strategies. Every effort has been made to ensure the accuracy of these comments at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. All financial projections are based on the opinions of the author and should not be considered forecasts. Forward-looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward-looking statements. The information in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to an individual’s situation.

AGF Investments is a group of wholly-owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisers in the United States. AGFI is a registered portfolio manager with Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that make up AGF Investments manage a variety of mandates consisting of equities, fixed income securities and balanced assets.

Founded in 1957, AGF Management Limited (AGF) is an independent, globally diversified asset management company. AGF takes a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and wealth businesses focused on delivering an exceptional client experience. AGF’s portfolio of investment solutions spans a wide range of clients globally, from financial advisors and individual investors to institutional investors, including pension plans, corporate plans, sovereigns, endowments and foundations.

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