As usual, your government has over-promised and is virtually guaranteed to under-deliver. It may only be June, but with the election coming up in November, power players like Chuck Schumer, Mitch McConnell, & Joe Biden are already managing the Congressional calendar like it’s the end-of-year crunch time.
What this tells you, from a bettor’s standpoint, is that many of the news stories you are hearing about today will go unresolved tomorrow. And that means…
…Is yours for the taking. However, it’s critical to understand the intricacies of senate dynamics. Otherwise, your betting portfolio risks falling off a fiscal cliff if & when Chuck Schumer acts.
Allegedly, Congress & the Biden Administration are going to tackle all of these issues before the November election (lol):
- Gun Control
- Election reform
- Health care spending
- “Build Back Better”
- China competition (“USICA”)
- Government funding for FY2023 (“the CR”)
But a quick look at the schedule will dispel any notion you may have that more than one or two of these things gets done.
We’ve already covered GUN CONTROL & USICA. Today, let’s tackle RECONCILIATION (aka “Build Back Better”). We checked in with ZUBBY BADGER (the #1 earner in Senate-based prediction markets) to get his perspective on where this stands. So listen up, Jack:
First, it’s important to have a cursory grasp of what “Budget Reconciliation” is and why it’s important.
As I said on our most recent podcast, the practical implications are very easy. Because of how “reconciliation” modifies the Senate’s otherwise catatonic procedure, it amounts to one free shot at the endzone per year for the Majority Party. And the Democrats have until Sept 30 to use theirs.
So far, they’ve failed because moderates Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) have sided with Republicans on the issue of fiscal restraint — a sentiment that has been buttressed by inflation.
But according to Zubby, this story isn’t finished yet, and press reports about Joe Manchin recanting his opposition and cutting a reconciliation deal with Chuck Schumer should be taken seriously.
“It’s going to be a different bill than what we were talking about last year… it’s back in play,” Zubby told SSG.
The reason for Manchin’s change of heart: costly health care subsidies. Zubby told us that:
“Right before the election, everyone on Obamacare, their premiums are about to go up — like a lot. If you’re the Democrats, you’re the party of health care, you really don’t want that to happen, or else you’re looking at maybe losing the Colorado senate.”
Translation, in normal years, the Democrats would be happy to overspend on health care subsidies. But on the eve of what looks like a blowout loss, their incentives are even higher to close this gap.
How they’ll do that has everything to do with this bill’s chances of success. Zubby added that:
“Whatever roundabout funding thing they come up with will be the most inside Washington thing you’ve ever heard of it. It may not be achievable at all”
Our position at SSG is one of continued skepticism.
The political circumstances should elevate this from an underdog pick to a near-even money trade. But the divergence between what Joe Manchin wants and what Kyrsten Sinema will accept remain real. Ergo, we are happy to ride this one out on the NO side.
That’s a riskier move today than it was yesterday. And in the halls of Congress, you never want to be standing opposite Zubby. So listen to the whole segment and reach your own conclusion. This is a lucrative trade no matter what side you take — just take the right one.
LISTEN TO THE FULL PODCAST (Reconciliation, Build Back Better, Gun Control)