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Infrastructure Bill - Status

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Funding, infrastructure and debt
Keeping track of the latest happenings on Capitol Hill can get confusing, especially when deadlines are as close together as they are in the fall of 2021. While it's still too early to tell how things will play out, investors have been monitoring the events as lawmakers play politics with the nation's pocketbook. Here are the three big items that are on the radar and how they could impact your portfolio:

Government funding - Congress last night passed stopgap spending legislation to avert a U.S. government shutdown, which was later signed by President Biden. The bill will keep the lights on at federal agencies through Dec. 3, giving Congress nine more weeks to pass a full budget plan. Buzz surrounding government shutdowns can trigger some market volatility, but this is the least likely event to affect investor holdings.

Infrastructure - House Speaker Nancy Pelosi promised to move ahead with a vote on a $1.2T bipartisan infrastructure bill before Democrat progressives said they have the numbers to stall it. They want the Senate to agree to a separate $3.5T social spending and climate policy package (or what the White House terms "human infrastructure") before pressing ahead on this front. Negotiations are still ongoing, but the developments have the potential to dent some sentiment in the market, especially infrastructure-related names, since the bill was a key part of Biden's economic agenda.

Debt ceiling - Treasury Secretary Janet Yellen has said the U.S. will run out of funds to pay its bills by mid-October and even called on Congress yesterday to eliminate the mechanism entirely. A default would "likely precipitate a historic financial crisis that would compound the damage of the continuing public health emergency," according to Yellen. It could also "trigger a spike in interest rates, a steep drop in stock prices and other financial turmoil. Our current economic recovery would reverse into recession, with billions of dollars of growth and millions of jobs lost." (11 comments)