AGF Management : One Serious Legal Crisis, One Serious Budget Crisis as Congress Returns

One Serious Legal Issue, One Serious Budget Issue as Congress Returns

January 2, 2024

THE SUPREME COURT FACES A MAJOR CRISIS within the next few days, eclipsing the upcoming budget debate, which may drag on for much of the winter. The high court doesn't have that much time; a ruling on Donald Trump's presence on state ballots has to come within weeks or sooner.

TWO STATES - COLORADO AND NOW MAINE - HAVE RULED that Trump participated in an insurrection, which under a provision in the 14th amendment to the Constitution would preclude him from appearing on election ballots. Virtually all Republican officials, and many Democrats, are opposed to removing Trump's name; they argue that only the voters have that option.

WITH SUPER TUESDAY approaching on March 5, legal experts say the country needs one standard for ballots, so the pressure is on the Supreme Court to take the Trump case, perhaps this week. Then a debate could take a few days; it took the court only three days to rule in favor of George W. Bush on Dec. 12, 2000.

THE KEY, OF COURSE, is whether Trump planned or incited the Jan. 6, 2021 riots on Capitol Hill - an issue that could take months or longer to resolve if left solely to the states, so the Supreme Court has to get involved. Conservatives hold a 6-3 majority on the court, and three of the justices were nominated by Trump.

AT THE STATE LEVEL, justices in Maine and Colorado have ruled that Trump participated in an insurrection, and these rulings could boost Trump's argument that the 2020 election was stolen. Trump supporters in Maine have been energized.

BOTTOM LINE: We'd put odds at 95% that the U.S. Supreme Court will take the case, with odds of about 70-30 that Trump will prevail and stay on the ballots. If he lost in the Supreme Court, the U.S. would plunge into uncharted waters, with write-in campaigns and the very real threat of unrest as voters claim they have been disenfranchised.

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THE OTHER CRISIS - AS USUAL: There's absolutely no consensus on 2024 spending targets, some of which have a Jan. 19 deadline, while others expire on Feb. 2. We'll be writing about this for the next few days, unfortunately, as members of Congress argue about a new "top line" spending target and specific appropriations.

THIS ORDINARILY WOULD BE BUSINESS AS USUAL IN WASHINGTON, with a "kick the can" option, but House conservatives are adamant that they will not act until there's passage of an immigration reform bill, which has strong public support as 10,000 illegal immigrants pour into the U.S. daily with impunity.

UNTIL THERE'S AN IMMIGRATION BILL, THERE WON'T BE SPENDING LEGISLATION - and more importantly, there won't be new funds for Ukraine and Israel. The need for new defense spending has been complicated by intense fighting between the U.S. and Iranian-backed Houthi rebels in the Red Sea, a growing threat to oil price stability this winter.

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

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries 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. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The 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 contained 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 the circumstances of the individual.

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