Senators Sinema And Manchin's Grip On Biden Agenda Hangs In Balance As Georgia Vote Unfolds

Zinger Key Points
  • Will the Senate end up divided 50-50 between Democrats and Republicans, or will Democrats have a 51 majority?
  • The Senate’s configuration can have a particularly strong effect on stocks related to the energy sector.

On Dec. 6, Georgia voters could be key in deciding the power dynamics of the U.S. Senate, as runoffs in the state come to a close.

With early voting taking place, more than 400,000 Georgians have already cast their ballot, according to the Washington Post.

The runoff is being held between incumbent Democrat Senator Raphael Warnock and Republican Herschel Walker. Neither won the majority of the initial vote, after Libertarian Chase Oliver, took 2.1% of the cast ballots.

Why The Georgia Runoffs Matter To Democrats

Regardless of how the runoff election turns out, Democrats have already won the Senate majority, as a 50-50 Senate and Vice President Kamala Harris able to break the tie.

What’s at stake is whether the Senate will end up divided 50-50 between Democrats and Republicans, or if Democrats will have the 51-member majority, which would remove the need to forge a power-sharing agreement.

Power-sharing agreements take a long time to establish and have historically slowed down the legislative process.

Related: Is Congressional Gridlock Good For Your Nest Egg? What A Divided Government Means For Personal Finances

While the Senate requires a supermajority of two-thirds of the body to pass most legislations, achieving a 51-member majority would give Democrats the ability to confirm judicial nominations, giving President Joe Biden the ability to fill judicial vacancies.

There are still 118 federal judicial vacancies that need to be filled, reported Vox.

Having a clear majority would also give Democrats the ability to reject bills approved by the House, which is under Republican control after the November election, effectively setting the agenda for Congress.

Impact On The Equity Market

A Democrat-controlled Senate can have a direct effect on the stock market.

In July, shares of several electric vehicle-charging companies, including ChargePoint Holdings Inc CHPTBlink Charging Co BLNK and EVgo Inc EVGO, jumped after Senator Joe Manchin reversed his opposition to a bill that includes provisions to address climate change.

The Senate’s configuration can have a particularly strong effect on stocks related to the energy industry, and those affected by climate change policies.

The Inflation Reduction Act of 2022, for instance, was backed by Senate Majority Leader Chuck Schumer and Manchin.

The law intends to raise $738 billion and authorizes $391 billion in spending on energy and climate change, setting goals to reduce U.S. greenhouse gas emissions by 2030 to 40% below 2005 levels.

The bill also adds provisions related to electric vehicles and clean mobility, which can directly affect the sales of Tesla Inc TSLA and other EV manufacturers.

Now Read: Tesla's Recall Woes Multiply As 80,561 Imported And MIC Electric Vehicles Now Impacted In China

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Posted In: NewsPoliticsMarketsGeneralChuck SchumerJoe ManchinUS Senate
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