What?! Bipartisanship in Congress? - Ahead of Wall Street
December 11, 2013
This is Mark Vickery covering for Sheraz Mian, who will be away on business until later this week.
So the image of Paul Ryan appearing at a podium with a Democratic budget committee chairwoman -- and behaving as if they're in accordance -- is perhaps the biggest surprise of the week so far. Is it truly possible we may be seeing bipartisanship in the halls of the U.S. Capitol?
If so, it's a long time coming. Apparently, there are at least a few people aware that 2014 is a mid-term election year. And considering the current Congress has already been cited the least-productive in U.S. history -- OK, it's not Rome, but we're still talking 224 years here -- you can say it's a good time for that alarm clock to have gone off.
A budget agreement would assuage fears of yet another government shutdown after the new year. It's no "Grand Bargain," but anyone paying attention to federal politics over the past 5 years can't possibly expect that was going to occur anyway.
This agreement is still at the mercy of the Congressional vote, and there are plenty high-profile representatives -- including some who will likely run for president -- who poo-poo it out of hand. (Hmm -- there's got to be a better way to phrase that.) Basically, we're by no means looking at a "done deal," at least not at this stage.
If the agreement is to pass, it will include $6 billion in cuts to federal workers' retirement benefits, as well as $6 billion in cuts to military pensions. In return, Sequester measures will be eased nearly a year after being implemented. Basically, this is a measure to improve the traction of the U.S. economy while avoiding raising taxes. Seems as if the congressional thinking caps were put on for this measure.
Whether or not these thinking caps will give way to the tinfoil hats worn by others in Congress remains to be seen. But as always, curing elements of economic doubt should do wonders for the stock market. We may need to wait for Congress to vote before they retire for the session to know for sure, but any time you can remove question makes from the equation, the market has got to think it's a good thing.