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Pelosi Rejects Jordan and Banks; McCarthy Rejects Pelosi

Well, this is a surprise. On Tuesday, Democrats were saying, and news outlets were reporting, that Speaker Nancy Pelosi (D-CA) was ready to accept the pair of bomb-throwing grandstanders that House Minority Leader Kevin McCarthy (R-CA) tried to stick on the 1/6 insurrection committee.

Oops! It turns out that was not the case, which forced more than a few outlets to reword their coverage (we don't like to do that, but we did add a very rare "update" note to our item). Yesterday, she rejected the two Jims (Jordan, R-OH, and Banks, R-IN), both of whom can spew fire with the best of them. She accepted the other three appointees and asked McCarthy to come up with two others. In her statement rejecting Jim2, Pelosi said: "With respect for the integrity of the investigation, with an insistence on the truth and with concern about statements made and actions taken by these Members, I must reject the recommendations of Representatives Banks and Jordan to the Select Committee."

As you can imagine, the right-wing outlets are outraged at Pelosi's decision. CNN's Chris Cillizza was critical, as well. In an editorial headlined "Nancy Pelosi just doomed the already tiny chances of the 1/6 committee actually mattering," he declares: "No matter Pelosi's reasoning, her decision to reject Jordan and Banks, the two most high-profile Republicans put forward by McCarthy, dooms even the possibility of the committee being perceived as bipartisan or its eventual findings being seen as independent."

Cillizza's piece was up very quickly after Pelosi announced her decision, and disappeared from the CNN front page (and politics page, and opinion page) pretty quickly thereafter. Interestingly, the pieces that came after (excepting, again, the ones from reactionary right-wing sites) were almost universally supportive of Pelosi. Some examples:

Truth be told, we are surprised that the commentary ran so heavily in Pelosi's favor, as this seemed like a tricky decision to us. Ultimately, it says something about the Republican House Conference in general, and about the two Jims in particular, that most folks—including Pelosi herself—felt she really had no choice but to do what she did.

McCarthy, of course, did not take the rejection of his two bomb throwers well. He decreed that it is all or none, and said that if the wonder twins are not restored to the committee, then he will pull the other three Republicans. He also threatened to form his own select committee, and conduct his own investigation.

Pelosi, appearing on PBS NewsHour, scoffed at these threats. She knows that she's already got a Republican on the committee in Rep. Liz Cheney (R-WY), which will blunt some of the "partisan witch hunt" talk, while other "partisan witch hunt" talk wouldn't be blunted even if there were 100 Republicans on the committee. In other words, this isn't that big a PR hit, especially since it also rids her of the headaches that would be caused by Jim-Jim-Jer-ee. As to McCarthy forming his own select committee, well, it won't have subpoena power, hearing rooms, a budget, or much of anything else in the absence of enabling legislation.

McCarthy ultimately had a tough hand to play here. He wanted to have some of his people in the room, but not many of his people wanted to get involved. He also had to bow before the Bedminster throne, and convince the combed-over head of the Republican Party that his interests were being represented. However, it was surely an error to pick so obvious a bomb thrower as Jordan. It was also a mistake for both Banks and Jordan to make such public statements, after they were chosen, about how much trouble they planned to make. This surely strengthened Pelosi's resolve, and also gave her cover to do what she did. A wiser play, we think, would have been to replace Jordan with, say, Chip Roy (R-TX), and to have Roy and Banks play nice for a few weeks, until the committee was operating at full steam.

If McCarthy sticks with his current position, and the only Republican on the committee is Cheney, then there will be no one on the committee to defend Trump in the hearings, which start next week. Cheney certainly isn't going to defend Trump and Democrats would be wise to make her the belle of the ball. Having a Republican asking probing questions of all the witnesses will give the committee some credibility with moderate Republican voters, no matter how much McCarthy calls it a partisan charade. Also, the final report will surely be an important input for how future historians, authors, and voters look at the insurrection, how it happened, and whose fault it was. (V & Z)

Republicans Filibuster the Bipartisan Infrastructure Bill

Yesterday, the Senate held a vote on a placeholder bill that would allow debate to begin on the actual bipartisan bill when it is ready in the fall. The bill voted down said something like: "Sec. 1. Congress hereby approves upgrading the nation's infrastructure as described in Sec. 2." But there is nothing in Sec. 2. Then in the fall, some Democrat will move to amend the bill to put the actual bill in Sec. 2. All the vote was intended to do is clear the way for later debate. Republicans weren't buying.

The vote failed along party lines, with every Republican opposing it. Sen. Rob Portman (R-OH), a member of the gang of senators working on the bill, said if only the vote had been delayed until Monday, it might have passed. But then Sen. Jerry Moran (R-KS) said that maybe not Monday, either. Sen. John Thune (R-SD), the #2 Republican in the Senate, said there isn't enough trust in the Senate right now to pass legislation. This is precisely what the Democrats are afraid of: endless stalling, and in the end the bill still doesn't get 60 votes. This is precisely what the Republicans did in 2009 when they stalled and stalled and stalled in an effort to prevent the Affordable Care Act from becoming law. Democrats haven't forgotten.

A month ago, the gang announced with great fanfare that they had a bill. All that was missing was how the money would be spent and where it would come from. Tiny details, really. Maybe Portman and the others will continue working and come up with a bill by Monday and there will be another vote. Sen. Joe Manchin (D-WV) encouraged that view by saying: "They have the right to see that and we're hoping to have that for them so they're able to make a decision on Monday." But there is a great danger that come Monday, there is still no bill (because the Republicans don't really want a bill and have already eliminated pretty much all possible sources of funding except taxing electric cars). Then the Republicans will ask for more time. Rinse and repeat. If Majority Leader Chuck Schumer (D-NY) wants to hold the Republicans' feet to the fire, he could cancel the usual August summer vacation until there is an actual bill, not just a placeholder, to vote on. (V)

Republicans Also Threaten to Shut Down the Government

From time to time, legislative bodies think they are so powerful they can overrule mathematics. One of the more famous examples is when the Indiana General Assembly effectively tried to set π (the ratio of the circumference of a circle to the diameter) to 3.2. Congress has never tried to set π to anything (or even e), but every year it flirts with overruling subtraction. Here is the formula:

budget_shortfall = government_expenditures - government_revenue

For example, if the federal government spends $6.6 trillion in appropriations but collects only $3.4 trillion in taxes and other sources of revenue, then the shortfall is $3.2 trillion. To pay for the appropriations, the treasury borrows $3.2 trillion by issuing bills, notes, and bonds for that amount. That $3.2 trillion in debt is then added to the as-yet-unpaid debt accumulated in previous years to give the total amount Uncle Sam owes. That's just math.

However, there is also a law stating the maximum amount of debt the government can have outstanding. If this year's revenue and spending numbers cause the total debt to exceed that number, Congress can

Three times in the past decade Congress went for option three when the Senate minority filibustered the bill to raise the debt limit. When that happens, federal employees (mostly) get furloughed, the military isn't paid, National Parks close, and a lot more. Yesterday, Senate Minority Leader Mitch McConnell (R-KY) had a temper tantrum and threatened to do it again if the Democrats insist on spending trillions of dollars on infrastructure in a giant reconciliation bill. Current projections are that the limit will be hit on July 31—in just over a week. However, the shutdown would begin only on Oct. 1, when the new fiscal year starts.

Shutdowns are politically risky. If, say, soldiers who live month to month and have no savings stop getting paid, they will definitely notice it and look for someone to blame. Shutdowns also tend to freak out the stock market. If Joe Biden goes on national television and blames the shutdown on the Republicans for blocking the bill to raise the debt ceiling and the seniors buy that, that will not help the red team in 2022. McConnell can give his version, of course, but the president has a bigger bully pulpit.

The Democrats are thinking about adding a provision increasing the debt limit in the reconciliation bill—subject to the approval of Senate Parliamentarian Elizabeth MacDonough, as usual. If she objects, the Democrats could conceivably go nuclear and add to the reconciliation bill a provision to generate enough revenue to keep the debt under the limit, for example by raising the tax rate for millionaires to 91% (as it was in the Eisenhower administration), the tax on estates above $5 million to 90%, the tax on capital gains to ... well, you get the idea. This would definitely bring McConnell to the table. Not as a happy, basking-in-the-sun turtle, but to the table nevertheless. (V)

Can Biden Be Effective and Avoid Divisiveness?

Any Democratic president has the built-in problem that what the progressive wing of the Party wants is often anathema to the centrist wing (and vice-versa). The debate over health care during the Obama administration laid this bare, with Obamacare vs. Medicare for All. However, Joe Biden's low-key style may allow him to bridge the gap. The trick he is trying to use is to sneak all kinds of progressive priorities through by calling them "infrastructure." Paying families $300/mo per child, having free pre-kindergarten for 3-and-4-year olds, and making 2 years of community college free stretches the definition of "infrastructure" to the breaking point and beyond. But giving the progressive wing some of its policy goals while most people have a vision of a bulldozer repaving a road might just work.

One thing Biden hasn't tackled yet, at least not in a big way, is health care. It is too controversial for the moment and can't be easily disguised as infrastructure, the way free pre-K or community college can be. Also, there aren't any powerful lobbies that violently oppose free pre-K or free community college. Any change to the health-care system instantly puts powerful players on the defensive. The one thing Biden wants to do on health care in the reconciliation bill is add vision, hearing, and dental coverage to Medicare. The providers of those services probably don't mind getting new patients (paid for by the government), albeit probably at lower reimbursement rates than they would like. Also, at least one key senator from a dentally-challenged state thinks that dental care is really important, which helps with the votes.

As we get closer to an actual bill, whose provisions can be attacked specifically, one thing in Biden's favor is that most of what he wants is popular with voters. When some Fox News anchor starts screaming that free college is socialism, how is that going to play with a viewer whose daughter or nephew is suddenly going to get free college? Also, the transportation and energy parts of the bill are popular.

Even the pay-fors are popular. Poll after poll shows that taxing the rich and big corporations is very popular, independent of how the money is spent. A large fraction of the country thinks that rich people and big corporations are paying too little in tax. If Fox News tries to defend Apple or Amazon hiding all their profits in shell companies in the Cayman Islands, well, good luck with that.

If Biden gets the reconciliation bill through Congress in the fall, then he will have to decide what to do with the next year until the midterms. He knows he might lose his majority in the House then, so the first half of 2022 might be his last chance to actually govern. He could try to tackle climate change in a big way, but not a lot of the options there are painless (except maybe subsidizing the transition to sustainable energy if it doesn't involve increasing the gas tax). Still, so far his low-key style seems to be working. (V)

Report: Infrastructure Bills Will Create Two Million Jobs

Moody's is a highly respected nonpartisan financial services company that rates bonds and provides other economic data. It also publishes reports on various aspects of the economy. Yesterday, it issued a report saying that the two infrastructure bills the Democrats are working on will create as many as two million new jobs and reduce unemployment by 0.5%. The report was written by Moody's chief economist Mark Zandi and the company's assistant director, Bernard Yaros. The White House immediately circulated the report far and wide, and Chuck Schumer urged all the senators to read it.

The report said that the combined effect of the $4.1 trillion in new spending might be a drag on the economy in the short term because the pay-fors would cut in immediately, but it would take some time for the government to write tenders for contracts, and then to allow time for bidding, and then for the winning companies to start hiring workers.

The analysis also said that labor productivity would increase in the long run beyond the 10-year window of its calculation due to the inclusion of free pre-kindergarten education and free community college. Studies have shown that children who go to pre-K education do better in school afterwards. Free community college will produce a better educated and more productive work force for years to come.

The report also addressed inflation fears and found them likely misplaced, because inflation tends to shoot up when too many employers are bidding for not enough available workers. That isn't the case right now, as unemployment remains "uncomfortably high," to use Moody's phrase.

For Democrats, reports like this from unbiased sources are like manna from heaven. They show voters that the country will benefit from the Party's plans in the medium and long term, even if it takes 6 months or more for the effects to kick in. Many voters don't understand or pay attention to reports from economists, but if there are a few more like this, it could affect some college-educated suburban voters who like the Democrats on social policy and the Republicans on fiscal policy and the economy. If unbiased economists say that the Democrats' plans are going to boost the economy, that could get some of them off the fence and into the Democrats' camp. (V)

Democrats and Republicans Are Roughly Equally Enthusiastic about the Midterms

Politico had Morning Consult run a poll asking voters how enthusiastic they are about the midterms. Among Democrats, 78% are at least somewhat enthusiastic about the midterms vs. 73% of Republicans. On the other hand, 33% of Republicans and only 24% of Democrats are extremely enthusiastic. So what Republicans lack in quantity, they make up in intensity. On the whole, it seems roughly a wash. Here are the results:

Poll on voter enthusiasm; as noted
enthusiasm is pretty high, while people who are not too enthusiastic make up about 13% and people who don't care at all make up less than

Enthusiasm among Democrats has dropped 3 points since Morning Consult ran the poll in April. Among Republicans it has gone up one point. Typically in midterms, the president's party gets fat and lazy and is less enthusiastic than the opposition party. Another Morning Consult poll from last month showed that a quarter of Democrats are unhappy with the Democrats in Congress. After all, they haven't actually done very much except talk with Republicans, which doesn't seem to get a lot of results.

Another Morning Consult poll shows that 62% of Democrats have at least some faith in the U.S. electoral system while only 38% of Republicans do. If we add up these two numbers and divide by two, we see that about half the country doesn't have much faith in the electoral system. This is not a great omen for democracy. (V)

Who Is Running the Trump Organization?

When Donald Trump was inaugurated, he put all of his companies into a revocable trust. Since the trust can be revoked at any time for any reason (or for no reason), Trump didn't really give up very much control. The trust was run by two trustees: Donald Trump Jr. and Allen Weisselberg. After being indicted for a variety of crimes, Weisselberg resigned as trustee, leaving only Junior. And Junior, who lives in Florida, seems to be mostly interested in politics these days. So, who is really in charge?

It certainly isn't Senior, who is mostly busy telling people that he won the election. He could terminate the trust and take everything back by just telling his lawyers to do the paperwork. But he hasn't. In practice, Eric Trump is running day-to-day affairs, but the companies seem to be mostly on autopilot, although Trump's empire seems to be shrinking. No new buildings were constructed during Trump's presidency, some existing buildings took down the Trump name, four hotels closed, and the merchandising empire shrank. In addition, the pandemic hurt the hotel business in general, and Trump's name made some of them even more toxic than the virus did. The company is now trying to sell its flagship D.C. hotel but nobody wants to buy it.

Plans to create a chain of budget hotels under the Scion name have been shelved and the company let the trademarks expire. New York City is trying to evict Trump from the public golf course he runs there. And on top of all this, Trump has hundreds of millions of dollars in debt coming due in the next couple of years and he could yet be indicted in at least two states (New York and Georgia) and maybe by the feds as well. Could all these woes put a damper on his future plans? Trump tends to avoid reality whenever he can, but sometimes it asserts itself in ways that are hard to ignore. (V)

Youngkin Is Running for Governor of Virginia on a Tightrope

Imagine a candidate who said he is honored to have Donald Trump's endorsement because he "represents so much of why I'm running." That part is pretty easy. Now imagine that the same candidate's pitch is that his opponent once accepted a campaign donation from Toxic Trump. Talk about trying to have it both ways: Vote for me because I am Trumpy and vote against my opponent because he is Trumpy. And yet, that is the campaign Glenn Youngkin (R) is running for governor of Virginia against former governor Terry McAuliffe (D).

The worst part of it for Youngkin is that he is desperate for college-educated suburban voters, most of whom aren't going to be fooled by this flim-flam and who don't like Trump one bit and aren't going to be impressed by The Donald's endorsement of Youngkin. So the would-be governor has to walk a tightrope, on the one hand pleasing the Trump-loving Republican base and on the other hand pleasing the Trump-hating suburbanites, without whose votes he has no chance.

As part of his campaign, he announced last week that he wouldn't take part in a debate sponsored by the Virginia Bar Association. His stated reason: Moderator Judy Woodruff made a donation of $250 ten years ago to a relief fund for the Haiti earthquake run by George W. Bush and Bill Clinton. So clearly she is a biased Democrat and represents fake news. Conservative talk show host John Fredericks called that decision "absolutely brilliant." Boy, will that own the libs! Show them that Youngkin is no pushover for fake journalists! Never mind that everybody in Virginia knows who McAuliffe is since he was governor for 4 years, leaving office in Jan. 2018, and nobody had ever even heard of Youngkin until this spring. Most political strategists think that when an unknown candidate is running against a very well known candidate, the unknown one generally benefits from a debate, assuming he doesn't screw up on stage. But what do they know?

Meanwhile, McAuliffe is going all out to tie Youngkin to Trump. McAuliffe said: "Poor Glenn doesn't know what to do. Trump is viscerally disliked in this state. I have beaten Trump every time here." McAuliffe ran Hillary Clinton's Virginia campaign in 2016 and Joe Biden's Virginia campaign in 2020 and Trump lost both of them. So how is Youngkin firing back? His press secretary, Macaulay Porter, said: "Terry McAuliffe is a total fraud who took $25,000 from Donald Trump, hugged Donald Trump, toasted Donald Trump, and now pretends like he hasn't been friends with him for nearly three decades." Again, the charge against McAuliffe is that he is a Trump lover. Porter has to hope that more Democrats are listening to him than Republicans, because if Republicans hear from Youngkin's campaign that McAuliffe loves Trump, is that going to make them hate McAuliffe? It is a strange strategy, to say the least.

Youngkin's background is in business. McAuliffe is surely going to point out that Youngkin, like Trump, is a businessman with no political experience, and how well did that work out? This week, Joe Biden will go to Virginia to stump for McAuliffe. The election is on Nov. 2. (V)

August 3 Could Be a Bellwether for the Democrats

In case you were looking for a summer rerun of the "Bernie vs. Hillary Show," it is playing right now in Cleveland. When former representative Marcia Fudge (D) resigned from Congress to become the secretary of HUD, a special election was called in OH-11. The district has been terribly gerrymandered to make it D+32 by putting as many Black people in it as the legislature could locate:

Map of OH-11

Consequently, the Aug. 3 Democratic primary is the real election. Two serious Democrats are running: Nina Turner and Shontel Brown. Both are Black women with some experience in politics. Turner was an Ohio state senator and also the national co-chair of the 2020 campaign of Sen. Bernie Sanders (I-VT). She is very progressive and extremely outspoken about it. Brown is a member of the Cuyahoga County Council and chair of the local Democratic Party. She is a strong supporter of Joe Biden and has accused Turner of undermining the President with her fiery rhetoric. Last year, Turner compared the choice between Trump and Biden as the choice between eating a bowl full of sh** and a bowl only half full of it. Many people are looking closely to see which way the wind is blowing, and if Black Democrats want a Black woman aligned with Sanders or a Black woman aligned with Biden. The Blackness and the womanness cancel out, so all that is left is Sanders vs. Biden.

Initially, Turner had more money due to her long connection with Sanders' fundraising network. But in June, she did an interview criticizing Rep. Jim Clyburn (D-SC) for supporting Biden last year and bringing him back from the dead. Brown sent the clip to Clyburn, who is widely revered in the Black community, and Clyburn promptly endorsed Brown. So have many other establishment Democrats, including about 100 from Ohio alone. Brown has also attacked Turner for making remarks about Biden that may have hurt him in swing states.

The surrogates will soon show up in beautiful Cleveland: Clyburn for Brown and Sanders and Rep. Alexandria Ocasio-Cortez (D-NY) for Turner. That may or may not help. In both the 2016 and 2020 primaries, the district rejected Sanders. On Aug. 3, all eyes will be on the voters of OH-11 to see if they do it again. (V)

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