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Good News, Bad News for Biden on the Infrastructure Bill

Politics is a "you win some, you lose some" kind of business. And on Monday, Joe Biden and his infrastructure bill got a pretty big win, coupled with (a bit of) a loss.

Let's start with the win, which is certainly more consequential. Senate Parliamentarian Elizabeth MacDonough has examined Senate Majority Leader Chuck Schumer's (D-NY) argument that, because Section 304 of the Congressional Budget Act of 1974 allows Congress to go back and revise the budget, it therefore allows the members to engage in multiple rounds of reconciliation each year. And on Monday, she ruled that Schumer is correct, and that this passes parliamentary muster.

This decision means that, to a large extent, the Democrats can get all kinds of bills passed without Republican votes. As readers of this site know, the rules for reconciliation already allowed three reconciliation bills per year—one for spending, one for revenue, and one for the national debt. Sometimes these are separate, sometimes they aren't. MacDonough's decision facilitates, at the very least, three more reconciliation bills this year (again, one of each type), plus six more next year (three for the 2022 budget as passed, and then three revisions). Depending on how the Democrats slice and dice it, that's anywhere from three (omnibus) to nine (individual) reconciliations in the next 18 months or so. Further, nothing—including MacDonough's ruling—actually says the Democrats can't "revise" multiple times per year, which theoretically means unlimited reconciliations are possible.

If that proves to be the case, then all budget bills would de facto join judicial nominations on the list of un-filibusterable actions by the Senate. And given that a sizable number of initiatives can probably be spun into an expenditure, or a revenue increase, or a debt increase, that could really take a hammer to the filibuster. To take one example, if the Congress were to grant statehood to Washington, DC, wouldn't that create some sort of expenditures, as the federal government would lose some tax income to the newly created state? Or to take another, wouldn't a $5000/assault weapon tax be a budget issue? The filibuster wouldn't be dead, but it could certainly be badly weakened (and Elizabeth MacDonough would become one of the most powerful people in Washington, as she decided which "budget items" would subvert the rules, and which would not).

It is not yet 100% clear, of course, that constant reconciliation revisions would be legal—thus far, MacDonough has only formally approved the one per year. It's also not 100% clear that Schumer wants to blow things up like that. Even if it turns out to be technically possible to introduce unlimited reconciliations, there are at least two reasons that he may not want to do it. The first is that the process itself is pretty obnoxious for Senators, as they all have to sit on the Senate floor and listen to/vote upon unlimited amendments. Even if none of the amendments pass, the Republicans could gum up the works for days or weeks before a bill finally passes. The second is that if an "unlimited reconciliation" precedent is set, then the Republicans will certainly take advantage once they are back in the saddle in both chambers.

So, if Schumer's goal turns out to be something other than blowing a (backdoor) hole through the filibuster, what might he be trying to accomplish here? The most straightforward possibility is that he just wants a little more wriggle room as he helps the White House to implement its agenda, and three reconciliations are better than two. A second possibility is that he wants leverage to use in order to get the Republicans to negotiate: "Work with me here, or I'll be forced to attempt another reconciliation." A third possibility is that he wants leverage with Blue Dog Democrats in hopes of blowing a front-door hole in the filibuster: "Let's trim the filibuster back, or else I'll be forced to pursue our goals through reconciliation."

The upshot is that this could prove to be a pretty big deal. Time will tell, but we'll point out that nobody appreciated what a big deal it was when the original reconciliation legislation was passed in 1974 or, for that matter, what a big deal it was when then-Majority Leader Mike Mansfield (D) engineered an end to the "talking" filibuster in 1970. Perhaps yesterday will be listed with those days at some point in the future.

Meanwhile, as we noted, there was also a bit of bad news on the infrastructure front. The Blue Dogs in the Senate are pushing back against the bill. Sen. Joe Manchin (D-WV) said he's not happy with the idea of a corporate tax hike to 28%, and that he's only ok with 25%. Sen. Mark Warner (D-VA) was more vague, saying he needs to hear more about the plan before he can plausibly give his support.

CNN ran the Manchin story with the headline "Manchin warns Biden's infrastructure bill is in trouble over corporate tax hikes." This seems a gross overstatement to us, since it makes it seem like the proposal is on life support. What Manchin is doing here is called—and forgive the use of such an obscure term—"negotiating." Biden is a five decade politician; he knows how the sausage is made, and he surely built some wiggle room into the bill. And whether he did, or he didn't, he isn't going to say, "Wait? I can't have everything I want? Well, then, screw the bill." Donald Trump maybe, but not Biden.

One suspects that Manchin has a little bit of flexibility on that 25%, since he wants that nice, juicy pork that was put into the bill specifically for him. And there are certainly ways to fix the math when and if Manchin has to be accommodated. The President badly wants the bill to be budget-neutral, over the long haul, so he's unlikely to add some borrowing to balance the ledger (although he could). More probable is a tax increase elsewhere, or cuts to some of the spending proposals. This is not to say that passage of the bill is a done deal, but thus far the pushback from Democrats has been fairly muted, and certainly within the range of responses that the White House anticipated. (Z)

Fauci Concedes What Everyone Should Already Have Known

Anthony Fauci sat for his latest interview on Monday, with Politico, and was asked about the situation with vaccine passports. In something of a non-revelation, he opined that "I doubt that the federal government will be the main mover of a vaccine passport concept." He left open the possibility that the feds "may be involved in making sure things are done fairly and equitably, but I doubt if the federal government is going to be the leading element of that."

Ultimately, the politics of a mandatory vaccine passport are just too fraught for the Biden administration to consider it. The U.K. is similar to the U.S., culturally, and is a little farther down the vaccine passport road, with Prime Minister Boris Johnson having announced an initiative late last week. Already, the pushback has been fierce, with many liberals (led by former opposition leader Jeremy Corbyn) and many conservatives uniting to frustrate the plan. The U.S. is arguably even more individualistic than the U.K. and also has the Senate filibuster. There is zero chance that a vaccine passport law would get through Congress, and even if it did, the blowback would be fierce.

On the other hand, if private businesses are the ones making the rules, then they are the ones who get to deal with the blowback. Further, there is a bit more of an element of choice there, which is less likely to raise the hackles of the "the government isn't going to tell ME what to do" crowd. After all, a person doesn't have to eat at that restaurant, and doesn't have to fly that airline, and doesn't have to shop at that store. They can choose if those things are more important to them, or if remaining un-vaccinated is more important.

The more interesting question is whether the federal government will get involved in the creation of some sort of document or software that allows those who are vaccinated and who want/need to be able to prove their vaccination status, to do so. That would be a pretty big task at a time when the administration is already pretty busy. Further, trying to centralize information from 50 different states (and D.C., and the territories) would be daunting, particularly given that documentation was pretty haphazard in the early weeks of vaccine distribution.

More probable is that the vaccine passports, in addition to being optional, will largely be left to the states. New York is already deploying what it calls the Excelsior Pass, which allows people to print proof of vaccination and/or to display it on their phone. California is working on something similar. The states are supposed to be "laboratories of democracy," as Louis Brandeis observed, and are likely in a better situation right now to work out the kinks in something like a vaccine passport. Most activities that might require such a passport will be intrastate, and so whatever the state's app or protocol is will meet the need. And for interstate or international businesses, one imagines that a list of accepted options will eventually emerge. For example, "If you want to board a Delta flight, you must show a valid Excelsior Pass, or Golden State Golden Ticket, or Keystone Koupon." The federal government might act as a facilitator, but not a driver, as Fauci predicts. (Z)

Whither the GOP, Part I: Corporate America

The Republican Party is at a crossroads, as both leaders and rank-and-file members try to figure out what the future holds. On one hand, the GOP has a viable coalition right now that allows it to sometimes claim the White House, and sometimes majorities in the Senate and/or House, and to often claim many governorships and state legislatures. On the other hand, the coalition is clearly smaller than the Democrats', is made up of a lot of voters who are...challenging to manage, and as a result of that it is in danger of flying apart at the seams.

Among the foundations of the Republican Party—and perhaps the foundation—is business interests, particularly the corporations. The trade is pretty simple: the corporations donate lots of money to Republican campaigns, and spend lots of money on lobbying. In exchange, the corporations get regulation rollbacks, tax cuts, and the like. Since the day the Republican Party was founded in 1854, it has been pro-big business. It became more so during the Gilded Age (1860s-1900s) and even more so still in the 1920s and 1930s.

Right now, however, the relationship is fraying, visibly enough that just about everyone is writing about it this week (see here, here, here, here, and here for examples). The basic dynamic is that the GOP keeps passing a lot of controversial legislation, either to try to maintain their hold on power, or to appeal to their socially conservative and populist base, or both. This legislation offends a sizable majority of Americans, who have learned to express their pique with their wallets. The big businesses are often caught in the middle and forced to choose, and they tend to choose the side where more of the money is. That generally means picking against the Republicans, who often respond with angry verbiage meant to (once again) appeal to the socially conservative and populist base.

The last week has given us an excellent case study of this dynamic. Georgia Republicans passed their controversial voting laws, which produced public pressure, which caused Major League Baseball (a $10 billion/year corporation) to yank the All-Star Game from Atlanta (and give it to Denver, which conveniently happens to be located in a blue state with a Democratic trifecta). Following the move by MLB, prominent Republicans fell all over one another in their rush to express their "outrage." Sen. Marco Rubio (R-FL) wrote a letter to baseball commissioner Rob Manfred, calling him a hypocrite and wondering if he will give up his membership at Augusta National golf club. Gov. Greg Abbott (R-TX) sent his own letter to MLB, accusing them of perpetrating a "false narrative about the election law reforms in Georgia," and advising that he was no longer willing to throw out the first pitch at the Texas Rangers' season opener (which happened yesterday). And Senate Minority Leader Mitch McConnell (R-KY) warned that there will be "serious consequences" if corporate America keeps behaving like "a woke parallel government."

At this point, let us observe that the Republican Party is still the party of regulation rollbacks and tax cuts, even if they don't make quite so much a point of saying it publicly, for fear of aggravating the populists in the base. Further, the corporate bigwigs know what political theater looks like, and that Rubio, Abbott, McConnell, et al. are mostly just putting on a performance for the base.

That said, these sorts of things have to give corporate interests pause, and to get them thinking about which party is the better basket to put their eggs in. In the 2020 cycle, the Republicans collected less money from big business than in many decades. Notably, the U.S. Chamber of Commerce, traditionally a loyal supporter of the GOP, endorsed nearly two dozen Democratic candidates for Congress while withholding support for Donald Trump. There are a number of reasons why corporate interests might plausibly decide they're better off with the Democratic Party:

  • Predictability: The modern-day GOP has become unpredictable and impetuous. This was particularly true with Donald Trump, of course, who might impose or yank a tariff at any time, or who might say something harmful to the economy, or who might set his sights on a particular corporation. He's now on the sidelines, but many Republicans have embraced his style, both in terms of rhetoric and policy. For example, when Delta Airlines expressed opposition to the Georgia election bill, many Georgia legislators ripped the airline on Twitter, and they voted to lift a key tax break (on jet fuel) that Delta relies upon.

    The Democrats may be the party of regulation and higher corporate taxes (see, for example, the infrastructure bill), but they are also predictable. Their actions, within some reasonable range, can be anticipated and planned for. It is extremely unlikely that Joe Biden is going to carelessly say or do something that causes the Dow to drop 12% in one day (as it did, for example, on March 16 of last year, partly in response to Trump's mismanagement and unwise rhetoric in the early days of the COVID-19 pandemic).

  • Reality: Corporations are also fans of, for lack of a better word, reality. Again, the CEOs understand the need for occasional political theater, and occasional kowtowing to the base. The corporate types have, for years, listened patiently while Republicans denounced undocumented immigration...and then did little to address the issue, thus keeping the pipeline of cheap labor flowing.

    It is another thing, however, when a political party operates in the realm of fantasy, and governs consistent with that. The Trump administration's COVID-19 denial, and its promulgation of non-evidence-based theories and treatments, was most certainly not good for business. Similarly, it is very clear to the folks who make automobiles that global warming is real, and that the age of the electric vehicle is imminent. If this was, say, 1985, then GM, Ford, and Chrysler would have sat down with Ronald Reagan's people and extracted some fat tax concessions or other corporate welfare in exchange for a commitment to shift toward EV production. Today, however, if corporations want to follow the science on global warming, or immunology, or any of a dozen other things, they can either work with the Democrats or they can go it alone. The modern GOP is all-in on anti-science in general, and anti-global warming in particular.

  • The Economy: It is true that the business interests like corporate tax cuts and regulation rollbacks. However, they also like big-time government spending, which tends to goose the economy, and which tends to be the province of Democrats. Here is how much the Dow Jones Industrial Average grew, as a percentage, during the first 48 months in office for every president elected since 1932:

    President Growth
    Franklin D. Roosevelt 236.5%
    Bill Clinton 105.8%
    Barack Obama 73.2%
    Democrats' Average 72.8%
    Dwight D. Eisenhower 65.4%
    Donald Trump 50.9%
    George H. W. Bush 41.3%
    Ronald Reagan 35.8%
    Republicans' Average 32.6%
    Lyndon B. Johnson 16.7%
    Richard Nixon 5.6%
    Harry S. Truman 5.3%
    Jimmy Carter -0.7%
    George W. Bush -3.7%

    And here is the growth of the DJIA after 96 months as a percentage, for those presidents who managed to make it through a second term:

    President Growth
    Bill Clinton 228.9%
    Democrats' Average 166.2%
    Barack Obama 148.3%
    Ronald Reagan 147.3%
    Dwight D. Eisenhower 123.7%
    Franklin D. Roosevelt 121.5%
    Republicans' Average 81.5%
    George W. Bush -26.5%

    The Dow Jones isn't the best way to judge the health of the economy, but it is pretty good when it comes to judging how corporate America is doing. And it's pretty clear that, on the whole, Democrats are a better bet for corporate stock prices than Republicans are, particularly when those Democrats are spending lots of money at the start of their terms, as FDR and Obama both did. Joe Biden, by the way, has already seen the Dow Jones rise 11.3% since taking office, and is also spending lots of money.

If corporations shift from the Republicans to the Democrats, that would be a sea change in American politics. It's still far from a done deal, and inertia and the basic political program of the two parties both argue against it. That said, with the Republicans embracing populism and trying to become the party of blue-collar workers, it's not impossible. (Z)

Whither the GOP, Part II: The Religious Right

In addition to thinking about their relationship with corporate America, today's Republicans also need to think long and hard about their relationship with the religious right. Like the angry, white, male populists, Protestant evangelicals tend to demand policies and rhetoric that are broadly unpopular with the populace at large.

Monday actually gave us a very clear example of this dynamic. Arkansas, which clearly remains a part of the Old South, has seen its legislature working overtime recently to pass socially conservative legislation. The latest was a bill that would have criminalized gender-affirming care for transgender minors. In other words, doctors who prescribed hormones or agreed to perform surgery would be guilty of a felony. Gov. Asa Hutchinson (R) vetoed the bill, not so much because he disagrees with the goals, but because he was worried about the legal and economic fallout. He encouraged the legislature to "think through the issue again" and find a different approach.

Meanwhile, the state of Virginia, which is about as New South as it gets, is home to Danica Roem, the first openly transgender person to be elected to and serve in an American state legislature. She introduced a bill banning gay and trans panic as a valid defense for murder or manslaughter. A total of 11 other states had already decreed that "When I found out he was gay, I just lost my head and murdered him" was an unacceptable defense, but Virginia was the first Southern state to take up the matter. And now, Roem's bill has passed the legislature and been signed into law by Gov. Ralph Northam.

When it comes to social issues like this, the key demographic is the percentage of voters who are evangelical Protestants. In Arkansas, that number is 46%, which puts them fifth in the nation, behind only Tennessee (52%), Alabama (49%), Kentucky (49%), and Oklahoma (47%). In Virginia, that number is 30%, which may seem a lot, but puts them in the same neighborhood as Oregon (29%), Arizona (29%), Colorado (26%), Hawaii (25%), and many others. Put another way, 46% is close to a majority, while 30% is not.

The Republican Party's relationship with evangelicals is a particular area where they have a tough choice between short-term and long-term benefits. On one hand, the partnership works very well in some places, as evangelicals are reliable voters who donate money and who can be kept on board with the "right" stance on just a few issues. In other words, they are much more manageable and much more reliable than many other constituencies.

On the other hand, the evangelicals are the source of some of the policies that most anger the rest of the country, thus triggering the corporate dynamic discussed above. Further, the number of places where evangelicals dominate is shrinking. In only six states, all of them small-to-medium sized and Southern, do they make up at least 40% of the electorate. In only 11 states, again all of them small-to-medium sized and Southern, do they make up at least a third of the electorate. Further, the number of evangelicals continues to shrink, and a primary reason is that many young people who might otherwise join these churches are repelled by the hardcore social conservatism, particularly the anti-LGBTQ stuff. They see the church and the Republican Party as partners in this, with good reason, and are turning their backs on both.

As with the GOP-corporate America relationship, there's no predicting where this one is headed. The only thing that can be said is that if the Party stays on the path it's currently on, it's eventually going to lead them to a very bad place for them to be. (Z)

Whither the GOP, Part III: The Right-Wing Media

And finally, since we have now dwelled on the subject at great length, let's talk about one more large and difficult existential issue that the Republican Party is going to have to grapple with, sooner or later: the right-wing media.

Former Speaker of the House John Boehner will publish an autobiography next week entitled On the House: A Washington Memoir. And in order to goose sales, the Ohio Republican has made excerpts from the book available to various media outlets. Here's the passage that everyone is talking about (including one of our letter writers this weekend):

[Michele] Bachmann, who had represented Minnesota's 6th Congressional District since 2007 and made a name for herself as a lunatic ever since, came to meet with me in the busy period in late 2010 after the election. She wanted a seat on the Ways and Means Committee, the most powerful committee in the House. There were many members in line ahead of her for a post like this. People who had waited patiently for their turn and who also, by the way, weren't wild-eyed crazies.

There was no way she was going to get on Ways and Means, the most prestigious committee in Congress, and jump ahead of everyone else in line. Not while I was Speaker. In earlier days, a member of Congress in her position wouldn't even have dared ask for something like this. Sam Rayburn would have laughed her out of the city.

So I told her no—diplomatically, of course. But as she kept on talking, it dawned on me. This wasn't a request of the Speaker of the House. This was a demand.

Her response to me was calm and matter-of-fact. "Well, then I'll just have to go talk to Sean Hannity and everybody at Fox," she said, "and Rush Limbaugh, Mark Levin, and everybody else on the radio, and tell them that this is how John Boehner is treating the people who made it possible for the Republicans to take back the House."

I wasn't the one with the power, she was saying. I just thought I was. She had the power now.

We see no reason to believe he's not telling the truth.

In the end, this anecdote is a reminder that Fox News (and OAN, and Newsmax) may seem to be in the same business as the Republican Party, namely advancing conservative priorities, but they really aren't. More specifically:

  • Resentment: If the product being peddled by the right-wing media could be reduced to a single word, it is resentment. And that goal is best served by amping up the rhetoric and throwing as many Molotov cocktails as is possible, in hopes of keeping the viewers coming back. However, as we have plainly learned in the last couple of decades, and in particular the last 5 years, ultra-partisan rhetoric and bomb-throwing is utterly antithetical to consensus-building and to governance. That applies on both a national level and a party level.

  • The Fringe: In a related dynamic, the right-wing outlets have relatively little use for calm, sensible, establishment Republicans. They might chat with a Sen. Chuck Grassley (R-IA) or a Rep. Hal Rogers (R-KY) on occasion, because they are current officeholders. But the folks that Fox, OAN, and Newsmax are falling all over themselves to book are the ones who will say outrageous stuff and generate some buzz, like Reps. Lauren Boebert (R-CO) and Jim Jordan (R-OH).

  • True Believers: Who knows how much Sean Hannity and Tucker Carlson believe what they are saying? We may never know; Rush Limbaugh is dead and it's still not clear how much of it was a put-on. In any event, those men (or, at least, the personas they play on TV) can afford to be uncompromising true believers. They can buy into the conspiracy theories (well, as long as they don't piss off Dominion Voting Systems), they can lament each and every compromise made with the Democrats, and they can encourage every Republican to dig his or her heels in. After all, media figures get paid regardless of how little or how much actually gets done. Politicians get paid regardless of how little or how much actually gets done, too, but between Sean Hannity and Hal Rogers, only one of them has to submit themselves to voters on a regular basis.

To hear Boehner tell it, Fox News is currently the captain of the S.S. GOP. The former Speaker learned that is not a good place to be, again because the goals of the media outlets are ultimately so different from the Party, and are so often harmful to it. Republicans enjoyed having such a powerful propaganda arm for so many years, but now the inmates are running the asylum. As with the evangelicals (above) and the populists (further above), the Party faces a tough choice between short-term pain, or potential long-term irrelevance. (Z)

Putin Apparently Isn't Going Anywhere

Last year, there were many rumors that Vladimir Putin would soon be out of power due to serious health issues expected to quickly end his life. With apologies to Mark Twain, it would seem that reports of Putin's imminent death were greatly exaggerated, because on Monday he signed a law that would allow him to run for two more six-year terms beyond his current one. That would take him to the year 2036 and the age of 83. The exception applies only to him, so there would be no point in signing it if he did not expect to take advantage of the new rules.

This means that the U.S. is presumably going to have to deal with Putin for years to come. And since he's ex-KGB, and sees the, U.S.-Russian relationship through the lens of the Cold War, that relationship is overwhelmingly likely to be chilly. Well, unless Putin manages to pull enough strings to get a Russia-friendly U.S. president that he can manipulate elected to the White House. But really, what are the odds of that happening? (Z)

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---The Votemaster and Zenger
Apr05 Battle of the Bridges Begins
Apr05 Maybe the Georgia Law Isn't As Bad as Feared
Apr05 Other States Are Watching What Happens in Georgia
Apr05 Biden's Infrastructure Plan May Hurt Unions
Apr05 The Old White Guy Is More Progressive than the Young Black Guy
Apr05 Thanks, but No Thanks
Apr05 Trump Scammed His Supporters
Apr05 Private Property Is Socialism
Apr04 Sunday Mailbag
Apr03 The First Shoe Drops...But What Will Follow?
Apr03 Saturday Q&A
Apr02 Let the Games Begin
Apr02 Gaetz' Troubles Mount
Apr02 Democrats Hope Johnson Breaks His Word
Apr02 Past as Prologue, Part II: Midterm Elections and the House
Apr02 Guess It Kinda Worked Out, After All
Apr02 COVID Diaries: No Light at the End of the Tunnel
Apr01 Biden Unveils His Big Plan
Apr01 Biden Won't Ask for a Wealth Tax
Apr01 No Gas Tax or Mileage Tax, Either
Apr01 Democrats Are Arguing about H.R. 1
Apr01 EPA Starts the DeTrumpification of Its Scientific Panels
Apr01 The 2020 Election Is Over
Apr01 Rick Scott Heads to Iowa
Apr01 House Freedom Caucus Is Split
Apr01 Summer Zervos' Case Can Resume
Apr01 New York Legalizes Pot
Mar31 Biden Branches Out
Mar31 Biden Will Announce Infrastructure Plan Today
Mar31 Just Assume the Russians Are Reading Everything
Mar31 Matt Gaetz In Hot Water
Mar31 While You Weren't Looking...
Mar31 Another Poll, More Good News for Newsom
Mar31 DNC Gets Ready to Tinker With the Rules
Mar30 What Is Going on in Georgia?
Mar30 Get Ready to Hear a Lot about Section 304
Mar30 This Is Going to Take a While
Mar30 World Leaders Propose Pandemic Alliance
Mar30 Past as Prologue: Presidential Retirements
Mar30 Van Drew Draws Potential Nightmare Opponent
Mar29 The Voting Wars Have Now Officially Begun
Mar29 Taxes Are Going to Go Up for Corporations and the Wealthy
Mar29 Dominion Sues Fox News for $1.6 Billion
Mar29 Another Autopsy Looks at Why Democrats Lost House Seats
Mar29 Bannon Could Face State Charges
Mar29 Raffensperger Is in Trouble
Mar29 Biden's Approval on COVID-19 Hits 75%
Mar29 Biden Has Frozen the 2024 Field
Mar28 Sunday Mailbag
Mar27 Saturday Q&A