From a source: “I think that because of the nature of backroom deals this has a decent chance of passing. However due to the large public outcry, is has a decent chance of failing.” Again very close …
It is turning out to be a very, VERY close vote in the House of Representatives. Some of the moderate Rs who were going to vote for it are weakening — like Mary Bono Mack of California. Earlier, it looked like Speaker Pelosi had the votes but was trying to get a big enough margin that politically vulnerable Ds could vote fopr it …now I think the issue is finding enough votes, period. Big gamble for Pelosi might be a bridge too far …
From the great David Goldman:
The negative multiplier occasioned by the retrenching of consumers (lower spending, more unemployment, lower incomes, lower spending in a vicious cycle) is stronger than the Keynesian multiplier from government spending (more government boondoggles for construction unions, more spending).
This is a smart summary: “Waxman-Markey is the climate policy equivalent of Sarbanes-Oxley financial regulation, guaranteeing extensive new bureaucracy and substantial economic cost to the productive economy while achieving few of its stated objectives. And the “cap and trade” system at the heart of the bill is riddled with so many loopholes that it should be considered more of a “hairnet and giveaway.”
From Action Economics (bold is mine):
Today’s U.S. reports revealed a bigger May income boost than we assumed from recent stimulus legislation, but a lower service consumption trajectory nevertheless, to leave a remarkable surge in the savings rate and a slightly weaker trajectory for aggregate demand as we approach mid-year. We also saw a small upward bump in the Michigan sentiment index in June as the various confidence measures post gains from Q4-Q1 lows, though confidence remains remarkably lean. The soaring savings rate shows that households are still bracing for the worst despite improving market conditions, as they hoard distributed stimulus benefits and hence truncate some of the “stimulative” effects.
From IHS Global: “Reduced wealth, high debt, tight credit, and a weakening labor market are all weighing on consumers. Wages and salaries were down in May, and have fallen in four out of five months this year. And higher gasoline prices are biting into spending power.”
My guy Dan Clifton of Strategas Research hears what I am also hearing:
As of early this morning, the votes were not present for passage, but House leadership has publicly claimed progress and is confident they have the votes to pass the legislation. Should the bill pass, the vote will likely be a razor thin majority. While today’s vote will have an impact on the financial markets, we remain convinced that passage in the Senate is a very unlikely event and today could represent a head fake. Passage of the House bill should not be underestimated, but House passage is not a proxy for the Senate passage. A razor thin simple majority in the House does not translate into a required 3/5 majority in a more restrictive Senate.