Tuesday, December 22, 2020

What the COVID-19 Relief Package Tells us about Congress

David Super

     As the 116th Congress staggered toward the oblivion it so richly deserves, it offered up a gigantic year-end legislative package that funds the government for the remaining nine-plus months of the fiscal year, provides some relief to those hardest-hit by the pandemic and recession, and attends to a host of other bits of business, large and small.  Both the behemoth itself and the process bringing it about represent potentially significant departures from past patterns that may portend changes in the way policy is made going forward.  This post offers some observations about each.


     First, this country’s ongoing fixation with personalities in politics, to the exclusion of institutional motives, continues to yield grievous miscalculations – and big advantages to those that know better.  To be sure, President Trump lost in what was otherwise an excellent year for Republicans because his personality alienated enough conservative voters that they voted for President-Elect Biden while supporting Republicans for most or all other offices.  And Republicans turned out their base with the specters of Speaker Pelosi, Minority Leader Schumer, and Representative Ocasio-Cortez. 

     The processes that stalled further coronavirus relief for so long, however, as well as those that finally allowed it to move, were overwhelmingly institutional.  When Democratic activists demonize Majority Leader McConnell, they miss the point and indeed fall into his carefully constructed trap.  Senator McConnell’s only real motivation is to be a strong Senate Majority Leader.  I am quite sure he was delighted when millions of liberal dollars poured into the futile attempt to defeat him for re-election – rather than going to Maine, Iowa, North Carolina or other states with genuinely vulnerable Republicans.  If the year had been so bad for Republicans that Senator McConnell would actually have been endangered, other Republican senators would fall first and his own re-election would only have brought him a distasteful return to the minority.

     Senator McConnell blocked further COVID-19 relief legislation since April not because he is a demon but rather because he thought that the best way to maintain a Republican Senate majority.  Having seen Republicans lose their House majority when they devolved into cacophonous warring factions, he was determined to hold his caucus together.  Antipathy to government spending on the Right meant that asking vulnerable senators to vote for another large package before the election would force them to choose between seeming insensitive to their constituents’ suffering and depressing turn-out in their base.  Insisting that the package stay significantly under the arbitrary but scary figure of $1 trillion made the vote tolerable for most of his caucus – at least once he told them that the failure to pass legislation helping Delta Air Lines could sink the run-off campaigns of Sens. Kelly Loeffler and David Perdue in Georgia.  Once Senator McConnell concluded that another large relief bill would split his caucus and depress voter turn-out, no amount of policy concessions or political pressure would have sufficed to make him call a pre-election vote.  Similarly, those imagining that offering up a sufficiently juicy menu of upper-income tax cuts and environmental degradation could bring him to the table again this Spring are likely deluding themselves. 

     Second, public pressure is deeply ineffectual when the electorate has just demonstrated that it will not punish the recalcitrant.  Congressional Republicans won the election – losing only one net Senate seat with this year’s map is a huge win – despite having just allowed enhanced unemployment benefits lapse in July.  Neither Senator McConnell nor any other Republican senators believed that continuing to block relief would be remembered and punished almost two years hence.  (The two possible exceptions, the Georgians, evidently are more afraid of disillusioning their anti-spending right-wing base than they are of abandoning unemployed workers.)  The Left has put a great deal of effort into demonstrations, especially over the past four years.  These play a role in maintaining morale during disturbing times, and they often play a role in ordering the priorities of the diffuse left-of-center coalition.  They are not, however, likely to have much effect on Republicans’ willingness to block initiatives.     

     Third, the growing asymmetry in U.S. politics of which Joey Fishkin, David Pozen, and others have written, was on stark display in this legislation.  Although Republicans depend on the votes of many people devastated by the pandemic and recession, they have learned that identity politics will keep those voters loyal even without economic assistance.  (Part of the reason, I have argued, is that our income security programs historically have served these acutely impoverished people so badly that their expectations are low.)  By contrast, although the failure of negotiations over relief legislation might have helped Democrats embarrass the two Georgia Republicans, far too many Democrats felt urgency about continuing unemployment benefits to displaced workers to make such a strategy remotely viable. 

     More broadly, Republicans are increasingly being expected to make the Party their primary institutional loyalty.  Thus, Republican governors with budgets in desperate straits largely yielded to their Party’s insistence that they not express their desire for fiscal relief publicly.  Some Democrats are primarily partisans, but many others’ chief allegiance is to their states or districts, to their faction within the Democratic Party, or to their key political patrons or donors. 

     Senator McConnell exploited this asymmetry early in the summer by insisting on a sweeping ban on liability for negligently exposing workers to COVID-19.  As this would be wholly unacceptable to several elements of the Democratic coalition, he could be confident that his adversaries would not put him in an awkward position by accepting.  At one point in the negotiations when Democrats showed some openness to liability limitations, Senator McConnell increased the stringency of his demand to ensure no deal could be reached.  In the final package, the Democratic leadership abandoned state fiscal relief, much of which would go to Republican states that refused to fight for the money, to keep out McConnell’s liability shield. 

     Fourth, the aggregation of numerous disparate provisions into a single bill is a result of politics that have become so deeply negative that politicians are defined much more by the objectionable things they do not support than by the laudable ones they do.  Each party’s base cares far less about whether their Member brings largesse to their state or advances positive policy than that she or he never dirties her or his hands voting for something offensive.  Aggregation of legislation is an attempt to add enough appealing provisions to allow Members to vote for it notwithstanding some pieces that key parts of their base reject.  President Reagan pioneered this approach with his aggressive budget reconciliation bills.  Continuing resolutions and omnibus bills, necessary to prevent government shutdowns, have become the only way to pass several of the more contentious appropriations bills; at this point, Congress makes little effort to pass any of the twelve annual appropriations bills individually.  This week’s behemoth sought to provide maximum cover for Members voting for it, containing coronavirus relief, appropriations for the great majority of the federal government, extensions of expiring tax expenditures with strong industry support, surprise medical billing restrictions, renewal of other expiring health program provisions, and quite a few of other items.  As long as gerrymandered districts have most Members fearing primaries rather than needing to demonstrate accomplishments to general election voters, this sort of maximum cover approach is likely to continue.  

     Finally, many progressive Members of Congress and activists still fail to grasp the basic principle that initiatives (other than those with extremely powerful lobbies) will receive the lesser of the result dictated by policy considerations and that dictated by budgetary considerations.  Budgetary room will go unused if the policy case for a proposal fails to persuade, but once budgetary constraints are set virtually no policy arguments will move them.  For example, many of the Affordable Care Act’s failings may be traced to President Obama’s insistence that its gross cost not exceed $1 trillion (even though all those costs would be paid-for).  Similarly, Republicans locked themselves into a budgetary cap for the 2017 tax law that could not accommodate all the promises they had made to interest groups; the result was many of the features that have made that law so unpopular with voters and helped cost Republicans control of the House. 

     In the context of this week’s legislation, once Senator McConnell made clear that he would not ask his senators to vote for a bill with a cost at or near $1 trillion, all spending provisions were competing for limited space.  In particular, the inclusion of a second round of economic impact payments greatly constrained the room available to extend unemployment compensation for those most directly affected by the recession.  Congressional Republicans have been consistently lukewarm about a second round of checks, but Sen. Sanders reportedly threatened to block the package if it did not include them. 

     If unemployment benefits run out early next year because Democrats are unable to induce Sen. McConnell to move another extension, they will have to ask themselves whether those checks were worth it.  To be sure, one theoretically could accommodate a more robust unemployment extension and economic impact checks within a $900 billion package.  With the congressional election results, and Democrats’ desperation to avoid an interruption in unemployment checks, giving Republicans a strong hand in the negotiations, it was unrealistic to expect that they would not insist on including many of their own priorities in the package. 

     I will analyze the legislation’s anti-poverty provisions in a subsequent post after I read a few more Tax exams. 


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