I want to start by reviewing the basic situation in Congress with the two parties. The Democrats have the majority in both chambers, but it’s a precarious majority, especially in the Senate. The Democrats lost seats in the House in the last election, keeping their majority but narrowing it. In the Senate, there are 50 Democrats and 50 Republicans, which means that when there’s a vote that requires only a simple majority, the Democrats will only prevail if all 50 Democrats agree on it, in which case Vice President Harris, in her constitutional capacity as president of the Senate, casts the tie-breaking vote. All it takes for the Democrats to lose that precarious majority is for one Democrat in the Senate to die or have a big scandal that forces a resignation, and not be replaced by a Democrat.
Of course, for most bills to pass the Senate, it takes not just a simple majority but a 60-vote supermajority to overcome a filibuster. The Democrats could take a vote to abolish the filibuster, but they would have to all agree on it, and Democratic Senator Joe Manchin of West Virginia, the most conservative Democrat in the Senate, has made it clear he won’t vote to abolish the filibuster. But certain kinds of vote can’t be filibustered. Confirmation votes can’t be filibustered, and neither can budget reconciliations. The Democrats can therefore pass just about any bill, if it’s purely about taxing and spending, as part of budget reconciliation, bypassing the filibuster and the need for the 60-vote supermajority. Again, though, to do that, they need all 50 Democrats in the Senate to agree in order that Kamala Harris can cast a tie-breaking vote in the Democrats’ favor. (She is going to be busier in the Senate than most vice presidents, these next two years.)
And now about COVID relief. The Democrats have two choices: they can make a deal with the Republicans to pass a bill with at least 10 Republicans votes, or they can pass their own plan using the budget reconciliation process. Because the Republicans want the bill to be for just over $6 billion and the Democrats’ plan comes to $1.9 trillion, it doesn’t look as if they’ll be coming to an agreement. Rather, it looks as if it will be passed by budget reconciliation.
The Democrats in the Senate have already paved the way for that with a nonbinding budget resolution, which makes the next step possible. They’re still working out some details. The Democrats insist that the payment per person needs to be $1,400, but the Democrats and the Republicans agree that upper-income earners don’t need to be included. Joe Manchin’s amendment provides that persons making over $50,000/year will get a little less, and persons making over $75,000/year won’t get a relief check at all. The Republicans think the amounts should be lower all-around. Democrats also give greater priority to aid to state and local governments.
An important difference between the two parties is that the Democrats are more Keynesian than the Republicans. Keynesian economics, it should be remembered, posits that when there’s an economic crisis, the government should undertake massive spending, which can include making direct cash payments to individuals so they can spend it, in order to pump up the economy with more money being put into circulation. To Keynesians, the amount of the federal deficit isn’t something to worry about when there’s a recession or a depression, but rather, deficit spending in time of recession or depression is a good thing, and the time to worry about paying down the debt is when the economy is recovering, when it’s in the boom of the boom and bust cycle. Thus, while Republicans worry that the relief bill could be too big, the Democrats are more concerned with making sure it’s big enough.
Article in TheHill.com, February 7, 2021
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