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Biden presidency depends on 'which Mitch McConnell we get': policy strategist

Yahoo Finance’s Brian Sozzi, Myles Udland, and Julie Hyman speak with AGF Investments Chief U.S. Policy Strategist, Greg Valliere, about the Joe Biden’s victory.

Video Transcript

JULIE HYMAN: Greg, as we look at these dual pieces of news here this morning, we had perhaps the predictable tweet from some people in politics, Donald Trump Junior, Ted Cruz, questioning the timing of this vaccine announcement. When can we start to ignore that sort of stuff?

GREG VALLIERE: Well, I don't think we're there yet. Good morning, nice to be with you. I think it's going to take a while. I think that we at least have to get through all the court filings today and tomorrow from pro-Trump people. They're angry. I mean, they feel the election was stolen from them. I don't see anything that looks substantive in court filings. It looks mostly frivolous. But, there are a lot of angry people out there, and it may take them a while to get over this election.

MYLES UDLAND: Hey Greg, it's Myles here. And on that point, we've seen a lot of enthusiasm, I think, from the Mitt Romney's of the world I guess your mainstream politicians, that maybe they can put the Trump period behind them. Do you think that that hope, perhaps, among some on Capitol Hill is misplaced? That we just go back to mainstream politics as it was done, , let's say, six years ago during the second Obama term.

GREG VALLIERE: Yeah I got to say, I think in talking to the Trump people, they view Romney or Governor Kasich with contempt. They feel that these people are not really on the team. So no, I think there's a lot of anger. I think there are a lot of Republicans who are thinking about 2024, and they don't want to antagonize the Trump base. And we can't forget, he won over 70 million votes, and I think a lot of his people are really angry this morning.

JULIE HYMAN: Greg, I do want to play a little bit of what we heard from President-elect Joe Biden over the weekend, kind of to your point. Let's play a bit of his speech from Saturday Night.

JOE BIDEN: I pledge to be a president who seeks not to divide but unify. Who doesn't see red states and blue states, only sees the United States.

JULIE HYMAN: You know, Greg, you've been in Washington a while, Joe Biden has been in Washington a long while, he knows all these people, except for some the newer people in politics, obviously. Is that going to help at all overcome that eyes on the 2024 sentiment among Republicans that you were talking about?

GREG VALLIERE: Well, you've hit on a really key point, and I think it really revolves around Mitch McConnell. I mean, what kind of Mitch McConnell will we get? Will we get the Mitch McConnell, who's known Biden for decades who's willing to deal, or do we get the Mitch McConnell, who is a sycophant for Donald Trump? Hard to say. My guess is that both Biden and McConnell will be able to cut deals, but these will be deals in the center. I think the progressive Democrats are going to get nervous that they could get frozen out.

MYLES UDLAND: And, Greg, I think there's been a lot of enthusiasm in markets on the notion that there won't be a further left agenda, but you mentioned deals. And we had a guest on the program last week. They brought up infrastructure, we all laughed. Is that the kind of thing that may be the beginning of a Biden administration, trying to do something bipartisan, may actually look at? Or are they just going to try to get through another fiscal package during the pandemic crisis here.

GREG VALLIERE: Yeah, I do think there'll be a fiscal package. It's not going to be as much money as the progressives want, but I think we get one. Infrastructure, yeah, how many times are we going to fall for that? I mean, we hear that every year or so. I think the key, guys, is to see what happens to the initial Biden cabinet nominations. If they sail through, if Mitch McConnell doesn't have a problem, if the Democrats can maybe get a Susan Collins or so and they get all of their nominees approved, that would be a sign we could get things done. But if some of these nominations are blocked, then that could be a sign we're in for a long schlog.

BRIAN SOZZI: Greg, all indications suggest that incoming president Joe Biden will be ready to sign a lot of executive orders, likely on his first day. Does he risk losing any Republican support, and what does it what would that mean to markets and just overall the administration moving forward?

GREG VALLIERE: Well, he'll go right away at environmental issues. Emission standards, whether it's auto emissions or factory emissions, he'll go right away on January 21 I would guess, the day after his inauguration, to come up with a different regulatory agenda from the President. There'll be a lot of squawking, but I don't think the Republicans can do much about that.

JULIE HYMAN: And, Greg, you mentioned the sort of left wing of the party. I mean, despite attempts to tar him as this seriously left wing guy during the election, Joe Biden has a history as more of a moderate. Do you think he will indeed ignore the left wing of the party, or is he going to somehow integrate them in it and finesse that relationship?

GREG VALLIERE: Well, it's a real tricky balancing act, isn't it? The progressives want to see a lot done. He knows he can't get a lot through the Senate. I'm assuming that Georgia doesn't have two Democrats win. I'm assuming that McConnell will control Congress. The key thing to watch for all of the investors out there is taxes. If the President just has a modest tax hike, not big, big tax increases, I think that would be a good story for the markets. Again, the progressives won't be happy, but for now they don't have anywhere else to go.