POLITICS NOVEMBER 5, 2010
To get ready for the coming Republican Congress, we asked six of The New Republic's most knowledgeable experts to outline how the change will affect politics, regulation, the environment, education, health care, and the economy. Here's how they responded.
Jonathan Cohn on politics:
The pre-election polls seem to trending, ever so slightly, back towards the Democrats. But it still seems likely that the Republicans will control one, and maybe two, houses of Congress come January.
That's obviously not good news for liberals or for liberalism. The Republicans will try to slash taxes for the wealthy, shrink the federal government, and repeal major legislation starting with health care reform. They probably won't get too far as long as President Obama wields the veto stamp. But majority status and committee chairmanships will give Republicans plenty of opportunities to wield power, whether by controlling the appropriations process or by issuing subpoenas.
At a fundraising dinner on Wednesday, Obama warned Democratic donors that the consequences of a Republican rout would be dire. He's absolutely right.
Still, Republican control of Congress doesn't have to be all bad. In fact, I can think of three distinct ways that minority status might help the Democrats, ideally in ways that would limit the Republicans' ability to wreak havoc and maybe even advance the liberal cause, however incrementally, over the long term.
At the risk of slipping into opinion journalism self-parody--I believe this what twitter users have in mind when they apply the hashtag #slatepitches--here are those three reasons:
1. It would flush Republicans out into the open, by forcing them to compose and defend detailed legislation.
One reason that the Democrats are in trouble right now is that it’s largely a referendum on the state of the country and their ideas. A lot of people are voting Republican simply because they are unhappy with the economy. The Republicans represent change--and that's good enough.
Obviously, some voters really do find the Republican agenda appealing. But that's easy when the agenda consists largely of slogans like “lower deficits” and “smaller government.” The Pledge they published a few weeks ago was supposed to provide specifics, but it was laughably vague. And it's not mystery why. The buzzwords are great until you start talking about what they mean in actual policy terms.
Think Progress, which is part of the Center for American Progress Action Fund, recently produced a video that illustrates this dilemma nicely. It’s a montage of television interviewers asking Republicans promising smaller government exactly which programs they want to cut. The Republicans have nothing to say. And that's because the actual answers would amount to a drastic reduction in government services, the kind voters would likely reject.
Republicans can get away with that now because they're campaigning. But if they gain majority control, they'll have to govern--or at least make an effort at it. That will mean drafting actual proposals and subjecting them to analysis by the Congressional Budget Office, not to mention scrutiny from the media.
Public opinion does change sometimes and, who knows, maybe once in power Republicans will find a way to pass an agenda consistent with their talking points. (They've been known, among other things, to silence government accountants that make unfavorable reports.) But that would require some serious political skills--and that brings me to the second benefit of Republican congressional control
2. It would raise the profile of the party’s legislative leadership, particularly would-be Speaker John Boehner and would-be Senate Majority Leader Mitch McConnell.
I don’t have specific polling information on either man’s popularity. But I feel pretty comfortable suggesting that neither man is a great party spokesman. Say what you will about Newt Gingrich, but he gives a good speech and is sharp on television. I don’t think you can say either thing about Boehner or McConnell.
What's more, the two will be going head to head with President Obama, who for all of his recent political troubles remains among the most well-liked politicians in America. True, communications skills is just one element of leadership. But divided government, particularly in the two years leading up to a presidential election, means elected officials are going to spend a lot more time posturing for the voters than trying to corral votes in committee. My hunch is that Obama comes out the winner.
And what about the Democrats in Congress? What would minority status mean for them? Losing control of Congress would obviously mean losing power, staff, and the ability to shape the legislative agenda. But a change in the majority would also have one clear upside:
3. It would unite the Democratic caucus around a more coherent set of views and policies.
Over and over again in the last two years, division within the Democratic caucus has held the party back. The stimulus ended up smaller, which meant it created fewer jobs. The health care bill won't deliver most of its big benefits until 2014. The middle class tax cut, although wildly popular, never came up for a vote. In every single case, President Obama and the congressional leadership wanted to do more. But without the votes to get their way, particularly in the filibuster-constrained Senate, they compromised with conservative Democrats who wanted to do less.
A Republican rout in November could change that. Thanks to gerrymandering, liberals for the most part won’t be the ones voters turn out of office. Conservatives will be. And that will produce a Democratic caucus that, although smaller, is also more cohesive. Not only will the remaining members be more likely to share a worldview; they'll also be faced with a partisan enemy on the offensive. This is precisely what happened the last time Democrats suffered a congressional rout, in 1994.
Of course, the post-94 Democratic caucus was also more liberal, as I recall. And there are plenty of people who will argue that going further to the left would merely alienate even more independent voters. (I can already hear David Gergen, on CNN, arguing that the election results mean Democrats should move to the center.)
But keep in mind that it's awfully hard to sell the public on a set of beliefs when a sizeable chunk of the party doesn’t believe them or is afraid to say so publicly--and that’s pretty much the situation right now. For the most part, the actual substance of what Democrats have been proposing--whether it's prioritizing job creation over short-term deficit reduction or regulating the insurance industry or forcing banks to simplify credit agreements--remain popular. If Democrats can push these policies with a clear voice, they might be better off.
Again, to be very clear, I am not saying minority status would be a net plus for the Democrats--or for liberals. Clearly it wouldn’t. And, to be brutally honest, I’m not even sure this analysis is correct. It’s speculation about politics, a topic I think is far less predictable and knowable than policy. But since Republican control of Congress remains such a real possibility, I feel like it’s worth thinking through the implications--and the important, if limited, ways it could actually help the liberal cause.
Update: Jonathan Bernstein thinks I'm wrong. And he makes some pretty good arguments.
John B. Judis on regulation:
Democrats are warning that if Republicans capture the House—and perhaps also the Senate—in this November’s election, they would abolish cabinet departments, repeal Obamacare, and privatize social security. They might want to do these things, but they won’t be able to overcome a Senate filibuster or a presidential veto. What they will be able to do, however, is undermine the work of regulatory agencies like the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), and the Federal Communications Commission (FCC).
The Obama administration has appointed good people to these agencies and increased their funding, and they are beginning to revive after being crippled during George W. Bush’s presidency. A Republican Congress wouldn’t be able to close them down, but it could make life very difficult for them to function by cutting their funding. That’s exactly what happened after the Republicans captured the Congress in November 1994 when Bill Clinton was president.
The newly minted Republican majority in the House, led by Georgia Rep. Newt Gingrich, immediately passed the Job Creation and Wage Enhancement Act, which contained sections specifically aimed at curbing regulatory agencies. The Private Property Reform Act forced the government to reimburse property owners for any loss suffered from regulations; the Regulatory Reform and Relief Act and the Risk Assessment and Cost Benefit Act created a labyrinth of appeals and studies that any new regulation would have to pass through. As the authors of a Contemporary Regulatory Policy put it, they “mired regulatory agencies in a procedural quagmire.”
In the Senate, Democrats killed the bill by threatening a filibuster, but the effort put the agencies on the defensive. In the budget that year, the Republicans—not constrained by a filibuster—were able to get their way. They cut the EPA’s overall budget by 25 percent and cut its critical enforcement budget by 40 percent and put 17 riders on the budget bill limiting the EPA’s ability to police industries. They cut OSHA’s already barebones budget by 16 percent and put a rider prohibiting OSHA from adopting new rules on ergonomic industries (like carpal tunnel syndrome) that had first been proposed in 1990 by George H.W. Bush’s administration.
When Clinton vetoed the Republican budget, the Republicans forced the government to shut down that fall. Clinton eventually won the political battle over the shutdown by demonstrating that Republican tax cuts for the rich were almost exactly equal to their proposed reductions in Medicare, but when the dust cleared from the budget battle, funding for the EPA and OSHA had been cut, and OSHA had been forced to suspend its attempt to enforce standards on ergonomic injuries. EPA director Carol Browner complained that from October 1995 to February 1996, EPA inspections had been reduced by 40 percent because of budget cuts. And there’s a clear lesson there. If you don’t have the people to enforce regulations on pollution or worker injury, it doesn’t matter how tough the rules are.
After Clinton easily won re-election in 1996, and the Democrats won back some of their seats (although not a majority) by running against the Republican leadership in Congress, the administration was able to get back some of the regulatory funding that had been lost, but even at the end of Clinton’s two terms, the agencies were not operating at full speed. In 2000, there were actually less people working in OSHA than there were in 1975. And an ergonomics rule had still not been adopted. (Clinton proposed it finally as a “midnight regulation” after the November election, but George W. Bush promptly threw it out.)
A similar tale could be told of what happened in other regulatory agencies after the Republicans won Congress in November 1994. And the same thing could happen next year if the Republicans win back the House—or the House and Senate—this November. That’s reason enough to worry about the outcome of the coming election.
Bradford Plumer on the environment:
First, a question: Have the last two years, with Obama in the White House and Democrats running Congress, really been that great for environmental policy? It depends how you look at it. There was that debacle in the Gulf, which obviously wasn't handled well. Then the Senate failed to pass a climate bill, and the Copenhagen talks dragged along without much resolution. But it hasn't been allgrime and tar: Obama's Environmental Protection Agency (EPA) is ratcheting up fuel-economy standards and knuckling down on air pollutants from coal-fired plants—including greenhouse gases. And the stimulus kicked in $80 billion for clean-energy and efficiency projects, which was a hefty sum by historical standards.
So when Republicans take over the House and expand their Senate numbers this fall, there's plenty of room for major shifts on the eco-front. Things can always get worse. That's especially true when you consider that, by and large, the new crop of conservative candidates doesn't believe in global warming (quite a few of them even believe that climate scientists are engaged in a sinister conspiracy). So here's a rundown of what to expect from a GOP Congress in the next two years:
Cap-and-trade is dead. Okay, a cap on carbon emissions fizzled out this year, too. But it at least passed the House and had a decent base of support in the Senate. Next year, cap-and-trade certainly won't go anywhere in a Republican-controlled House. In the upper chamber, meanwhile, John Kerry has said he'd like to keep toiling away on the issue, but the Senate's not getting any greener. (That's true on both sides of the aisle, by the way. Just look at West Virginia: Robert Byrd may have had a deathbed conversion on coal, but the Democrat hoping to replace him, Joe Manchin, recently cut an ad where he was blasting away at cap-and-trade legislation with a rifle.)
The knives come out for the EPA. Right now, Lisa Jackson's EPA is the country's last defense against endlessly rising carbon emissions. Thanks to a 2007 Supreme Court decision, the agency is supposed to start regulating greenhouse gases as soon as next year. That's not a perfect substitute for cap-and-trade—realistically, agency officials estimate they could only cut emissions 5 percent below 2005 levels by 2020—but it's a start. (Here's my primer on what EPA action would entail.) What's more, the EPA is unfurling a number of rules on pollutants like sulfur-dioxide and nitrogen-dioxide, all of which could force utilities to shut down their oldest, dirtiest coal plants in the coming years.
That is, unless Republicans can stop the EPA. And they'll certainly try. Yesterday, the likely head of the House energy committee, Fred Upton, wrote an op-ed in The Washington Times declaring war on the new pollution rules. For one, Republicans will try to pass resolutions stripping the EPA of its authority over greenhouse gases; Kit Bond, for one, has promised to attach just such a rider to every new bill that moves through the Senate. Granted, Obama can veto these bills—and, as Jon Chait points out, he's in a good position to win p.r. battles over the environment, just as Bill Clinton did in 1995. But this will come up again and again.
Slashing green budgets. If House Republicans can't neuter the EPA directly, they can always try a sneakier, less overt approach—mucking with the budget. Back in 1995, Newt Gingrich's crew managed to slash EPA funding by 25 percent, forcing the agency to cut back on inspections and criminal enforcement. And those budget cuts can have a big effect on policy: That same year, the GOP also managed to block funding necessary to enforce the Clinton administration's new fuel-economy rules. Expect similar fights over the Interior and Transportation budgets.
Chaining Lisa Jackson to the witness stand. The other option is to make Lisa Jackson's life a living hell. Republicans have already promised to drag her in for hearings as often as possible once they control the congressional committees—Frank Lucas, the ranking GOP member of the House agricultural committee, has said he expects EPA oversight hearings once a week. “It will diminish her free time, shall we say,” one former energy staffer told Politico.
Endless "Climategate" puffery. In the House, we still don't know what fate awaits Nancy Pelosi's special global warming committee—which Ed Markey mainly used to hold hearings on arcane energy issues and to take members on climate-related educational trips (visit the melting glaciers, etc.) Upton wants to disband it. But the panel's ranking Republican, Jim Sensenbrenner, has suggested he might want to use it to "investigate" the science of climate change. And the new head of the House oversight committee, Darrell Issa, wants to launch yet more inquiries into those Climategate emails in an attempt to prove some sort of scientific conspiracy—even though plenty of independent reviews have concluded that there's nothing there.
By the way, this is one reason I'm not quite as sanguine as Dave Roberts about climate skepticism simply fading away. True, most Americans aren't on board with climate denialism. But conservatives will now have a megaphone for amplifying every last pseudo-scandal. For a good template, look back to 2006, when Joe Barton led an inquiry into the "hockey stick" temperature graphs. Did Barton reveal anything interesting about paleoclimatology? Not particularly. (The critics made a few helpful suggestions on statistical methods, but subsequent studies ended up confirming Michael Mann's work.) Yet Barton helped vilify an entire field and fostered a generation of keyboard jockeys obsessed with proving that the hockey stick is a fraud.
Possible compromise legislation? Okay, this might get filed under "wishful thinking," but it's not totally impossible that some useful bipartisan energy legislation could emerge from the next two years. For instance, Indiana Republican Richard Lugar has put forward a proposal to reduce carbon emissions by giving utilities incentives to retire coal plants early. Lindsey Graham is a fan. So is Lisa Murkowski. Lugar's plan has a number of glaring flaws in it—see my summary here—but it's potentially fixable. Who knows?
Recently, Obama told Rolling Stone that he'd like to see clean-energy legislation move "in chunks" next year. That seems like wishful thinking. For instance, the Breakthrough Institute recently sketched out a proposal for $25 billion per year in R&D for low-carbon energy. Presumably this would be an easier sell than pricing carbon. Except that the last time Republicans controlled Congress, they repeatedly slashed funding for renewables and efficiency (and that was back when we were talking about piddling dollar amounts). And, with climate deniers filling the GOP ranks, it's hard to see this dynamic changing. Sure, funding for battery research and new appliance standards may sound sensible, but if it's all to address a problem the base doesn't even think exists, then why bother?
Seyward Darby on education:
Could education be the one policy area where Republicans and Democrats find common ground in a new conservative Congress? Many people, including officials in the White House, think so. A recent New York Times Magazine article reported that the administration “see[s] areas for possible bipartisan agreement, like reauthorizing the nation’s education laws to include reform measures favored by centrists and conservatives.”
It would seem to make sense because, philosophically speaking, Republicans should support many aspects of Obama’s K-12 reform agenda. The president has bucked sections of his own party with his proposals, among others, for improving teacher accountability and expanding good charter schools. Even Diane Ravitch, an education historian and liberal opponent of the president, wrote in the National Journal, “If the GOP takes one or both houses, Obama will gain more support for his misbegotten education agenda.”
Maybe. But don’t hold your breath. Sure, Republicans and Democrats united to pass No Child Left Behind (NCLB) in 2001, and, sure, Obama has proposed school-reform plans that overlap with those long held by conservatives interested in breaking the stranglehold that teachers’ unions and other traditional interests have on education. But none of that trumps the rise of the Tea Parties and the bitter partisanship that has defined the president’s first two years in office—trends likely to continue for the next two years.
“A Republican takeover of the House is a recipe for inaction,” says Kevin Carey, policy director for Education Sector. Or, as Jack Jennings of the Center for Education Policy puts it, “It will mean deadlock.” I think they’re right.
The reasons are simple. First and foremost, Republicans have gained political ground by almost totally opposing Obama’s domestic agenda. Why would they stop now, particularly with the national election looming in 2012? “I doubt they want to give [Obama] an education bill that he would sign at the White House just before a presidential election,” says Jennings.
Moreover, the Tea Party movement’s vigorous focus on shrinking all aspects of the federal government—including the Department of Education, which many Tea Partiers simply want to abolish—is already pressuring more mainstream Republicans to reevaluate where they stand on education. “Anybody who thinks 2010 Republicans or incumbent senators looking over shoulders are interested in substantial legislation around education … just haven’t been paying attention to sentiment on that side of the aisle,” says Frederick Hess, director of education policy studies at the conservative American Enterprise Institute. (Republicans are so uninterested in cooperating on federal school policy that the Pledge to America, the party’s new agenda, doesn’t even contain the word “education.”)
Practically speaking, this means the administration’s blueprint for NCLB, which is already several years overdue for reauthorization and desperately needs restructuring, probably won’t pass, maybe not even in pared-down form. Congressman John Kline, the top House Republican on the Education and Labor Committee, told Education Week in September that, while he supports reauthorization in principle, teachers and superintendents in his Minnesota district are “frankly not real thrilled with the blueprint.” He added, “One of the things that we've been insisting on is that we have to make [NCLB] simpler, easier to comply with and more flexible, therefore putting some meaning back into local control.”
Similarly, don’t expect new money for Race to the Top (RTTT), Obama’s signature program for competitive education grants, because that, too, violates the small-government ethos. After all, it was authorized in the 2009 stimulus package, which Republicans are denouncing every chance they get, and it involves the Obama administration handing out billions of dollars to states that it deems most committed to reform. Kline has already said he won’t support giving Obama the additional $1.35 billion he’s requested for RTTT in the 2011 budget. “This is the U.S. Department of Education, putting [out its] view of what needs to be done. ... It's not the states deciding. It's not local control,” Kline told Education Week.
The question, then, is whether, absent new federal requirements and incentives, states and local governments can drive reform on their own. It’s possible, particularly in places that have already embarked upon reform efforts, but the history is not encouraging. “If school boards, superintendents, and local teacher unions put top priority on raising standards, narrowing gaps, emphasizing quality in the classroom and running world class schools, America wouldn’t be where it is,” Mike Petrilli and Chester Finn of the Fordham Institute wrote in a September op-ed. “In urban America and many suburbs, local control means union dominance. … In other suburbs, it means smug complacency.”
And what about new pre-K legislation? It would require more federal dollars, so don’t count on it. As for higher education laws, the best (or, rather, worst) we can expect out of a Republican Congress is that it will push back against Obama’s efforts to more tightly regulate for-profit schools.
Granted, the future for education reform could look a lot worse. “I don’t think that the Republicans are going to come in and mount some kind of assault on public education that will have lasting damage,” says Kevin Carey. “I think they will be a barrier to moving forward, but they won’t move us back.”
But, if the best we can expect is more of the status quo, we’re still talking about squandering two years in which the government could work to improve the lives of millions of American children. It would be a tragic domestic failure.
Harold Pollock on health care:
Supporters of health reform are asking how President Obama might find common ground with House Republicans should Tuesday's elections go badly. Count me as a pessimist on this front. House Republicans have perceived little reason to compromise on health reform or much else. For many, ideological principles and political incentives converge on one destination: Implacable opposition to the centerpiece initiative of the Obama presidency. Midterm victories would not soften conservatives' policy views or this basic strategic judgment.
Republicans won’t have the votes to repeal the new law. They also face three awkward realities. First, the Affordable Care Act's most unpopular provisions fill budget holes Republicans couldn't easily fill. Second, specific aspects of ACA--such as those which forbid insurers from discriminating against sick people--are genuinely popular. Third, outright repeal would focus public attention on Republicans' own proposals, something the Republicans would wisely avoid.
If they cannot repeal ACA, Republicans can greatly damage it. They can hold interminable hearings to rattle the Obama administration, publicize bureaucratic goofs, and perhaps uncover a workable scandal. They can underfund and otherwise undermine ACA's implementation--and then blame the Obama administration for the resulting snafus.
The farcical "1099 collation calamity" exemplifies the latter strategy. To make a long story short, ACA raised roughly $18 billion by imposing rather cumbersome paperwork requirements to reduce tax evasion by small businesses. Small businesses didn't like it. Democrats mustered 56 Senate votes for a reasonable fix, but Republicans blocked the vote. Having prevented Democrats from addressing the problem, Republicans have been happily running on this ever since.
House members have no day-to-day responsibility for the instruments of government. They face little political penalty if they damage these instruments, or if they undermine the quality of programs they disdain. Indeed the political incentives often run the other way.
Fortunately, President Obama has one way out. He can reach out to Republican governors who actually have some stake in ACA's success. Establishing workable partnerships with these officials provides the best hope for productive negotiation with Republicans in Washington. It also happens to be the best pathway to sound policy, in implementing one of the most complex pieces of legislation ever enacted.
Governors are promising partners because they bear actual responsibility for millions of uninsured patients. They must respond to TV news accounts of uninsured cancer patients denied care. They must balance their budgets in the face of recession and rising costs health care. Elected by entire states rather than by narrow gerrymandered districts, they have some reason to present themselves as pragmatic dealmakers who get things done.
Governors need federal help and money to establish working health insurance exchanges on a tight timetable. ACA also expands funding for community health centers. These are essential to address the crush of uninsured people, particularly immigrants. These also provide thousands of jobs. If the House defunds ACA implementation, the first political victim will be the Obama administration. The second will be governors, Democrat and Republican, who will be held accountable for the resulting mess.
Governors also have a stake in ACA's fine print. Pre-Existing Condition Insurance Plans (PCIPs) are now operational. For the next three years, these arrangements will provide $5 billion to cover the medically uninsured. Republicans sharply criticize PCIP. Senator Enzi and thirty Republican colleagues sent HHS Secretary Kathleen Sebelius a sharply-worded letter, citing expert estimates that PCIP is underfunded. The letter asks pointed questions about what will happen if PCIP is oversubscribed or run out of funds.
These criticisms are disingenuous, since Republicans propose their own similar arrangements which are more seriously under-funded. Still, PCIP obviously requires additional resources. The proper ask from a Republican governor could be very helpful in securing greater resources.
Over the long run, governors have good reasons to support federal policies to reduce states' heavy fiscal burdens. Republicans complain about "unfunded mandates" embodied in health reform. This is also rather disingenuous. ACA provides states with substantial resources for Medicaid expansion and other challenges. ACA also subsidizes coverage for millions of low- and moderate-income people in red and purple states where the need is most acute. Ironically, in legislative negotiations for both the stimulus and ACA, Senate deficit hawks curbed liberal measures which would have lessened financial burdens on state governments.
Be that as it may, states will require federal financial help for years to come. Liberals have a special stake in providing this help, because state budget crises are killing progressive government. A permanent increase in the federal government's Medicaid match rate is especially essential. States cannot reliably support continued increases in required Medicaid spending. Scrambling to make budgets work, they under-pay providers. They fail to operate Medicaid with the care, professionalism, or humanity that recipients deserve. There is no way to resolve this without large infusions of federal resources.
Will Republican governors play ball? Who knows. Above the fold, many bitterly oppose the new law. Below the fold, word from the field is that many are reasonably cooperative with federal officials as both sides confront the mammoth implementation challenges of health reform. Many states are publicly or privately seeking more federal resources.
States and the federal government are locked in an uneasy partnership. This arrangement has many downsides. At least it produces Republican partners with a stake in effective government. In this Tea Party era, that's no small thing.
Harold Pollack is the Helen Ross Professor of Social Service Administration at the University of Chicago.
Alexander C. Hart on the economy:
Many political scientists believe the economy is the single biggest factor in determining election outcomes. It will likely cause Democrats to lose big on Tuesday. And, if conditions don’t improve, it could cause Democrats to lose big again in two years. But if the Republicans take over one or both houses of Congress, what can President Obama and the Democrats actually get done, given their recent struggles to pass legislation even while possessing majorities in both houses of Congress?
A new stimulus: Even some conservative economists agree the case for a new stimulus is strong. Obama and his allies seem to agree. Most recently, Obama proposed an infrastructure bank that would accelerate the spending of money on public works. But Republicans, as we all know, hate the very idea of governments spending to improve the economy. In August, House Minority Leader John Boehner, the presumptive speaker under a Republican House, discussed the economy in a speech whose text puts scare quotes around each of the (many) negative references to stimulus. Here’s just one example: “All this ‘stimulus’ spending has gotten us nowhere.” And recently, the Associated Press reported that Boehner “said if Obama and his team are going to work with the new Congress, then they must accept the end of government stimulus efforts as a means for creating jobs.”
Not only are Republicans dead-set against passing a new stimulus. They want to eliminate what’s left of the old one. Both Boehner’s August speech and the "Pledge to America" call for canceling unspent stimulus funds, and it’s also a sentiment widely embraced in the Republican caucus—see Eric Cantor, John McCain or Mike Pence for other examples.
But it won’t be easy for the Republicans to actually accomplish this. Only a small fraction of the approximately $800 billion originally allocated is still available; most has already been spent on tax cuts, infrastructure projects, and aid to states. According to ProPublica’s stimulus tracker, there is only $48 billion earmarked for non-tax-cuts projects that has not already been spent. There is a larger pool of money “in process” that Republicans could cancel, but doing so would leave a lot of half-finished bridges and roads as well as breach-of-contract lawsuits for municipalities whose project funding had evaporated.
Unemployment benefits: Historically, one kind of counter-cyclical spending that both parties have supported is aid to the unemployed. Jobless benefits tend to boost growth, since the unemployed tend to spend their benefit checks on immediate needs. The benefits also seem easy to justify: People contribute towards unemployment insurance while they work. And once they are out of work, they need the help.
Unemployment benefits usually last 26 weeks, and some recipients can qualify for an extra 13 weeks. Congress has, during this downturn, made benefits available for up to 99 weeks. But the extension is temporary, due to expire on November 30. And there’s no guarantee Congress will renew the extended benefits after the election. The last extension cleared the Senate only because Olympia Snowe and Susan Collins crossed party lines to vote with the Democrats. Will it be possible to pass another extended-benefits extension after the Republicans win more seats in the Senate, even if Democrats retain control? The odds aren’t good—some of the potential winners (most famously, Sharron Angle) actually believe in cutting unemployment benefits.
The best hope for the unemployed is some kind of long-term extension during the lame-duck session. Retiring Republican moderates, like New Hampshire’s Judd Gregg or Ohio’s George Voinovch, might feel free to vote as their conscience dictates, rather than how the party line demands. That, of course, assumes their consciences believe extending unemployment benefits is a priority. If it isn’t, or if the extension only lasts until the new Congress is sworn in, millions could lose their benefits.
Note that even if Congress saves the extended benefits, the extra-long-term unemployed are still in trouble. These “99ers” have been unemployed so long that they’ve run through the extended benefits, but aiding them has not been a significant priority for either party, in part because it’s hard to even get a good estimate of how many there are. But it’s improbable a Republican-controlled Congress will act to aid the 99ers.
Taxes: Republicans do like to cut taxes. And with the Bush tax cuts set to expire, Obama and the Democrats want to cut some taxes too. But President Obama favors extending the so-called middle-class tax cuts (which actually still deliver the greatest benefit to the wealthy) and letting the tax cuts for the wealthy expire. This approach would cost about $3 trillion over 10 years. Most Republicans favor extending them all, at a cost of around $3.7 trillion over 10 years.
So what happens? Theoretically, Democrats hold the trump card here. If Congress doesn’t act, taxes for everyone go up next year. That’s leverage that should be able to force Republicans to give in. But the Democrats themselves are divided; Ben Nelson, Joe Lieberman and other centrists support at least a temporary extension of all tax cuts. And among the few new Democrats who are likely to enter Congress, there is substantial support for a full extension.
Republicans, meanwhile, look like they’re ready to dig their heels in. Boehner backpedaled after the caucus he nominally leads hammered him in early September for having the temerity to suggest he might accept the cuts for high-earners being scrapped. Now he’s back on-message, echoing others in Republican leadership by saying, “This is not a time for compromise.”Democrats worry that they’ll take the blame if taxes rise next year, even if it’s Republicans who block an agreement. And when Democrats worry, they tend to retreat. Don’t be surprised if that’s what happens on taxes—perhaps with both sides agreeing on a one- or two-year extension of all the tax breaks.
Deficit reduction: Republicans have hammered President Obama for the growth of the national debt during his presidency. The Pledge to America, for example, describes spending as “out-of-control,” “runaway” and growing at a “breathtaking rate.” And in his August speech, Boehner declared Obama “should submit to Congress for its immediate consideration an aggressive spending reduction package” to pare back “deficits that threaten our economy.” The messaging has worked—in a recent Gallup poll, 87 percent of respondents who said their greatest concern “the size and power of the federal government” intended to vote Republican.
But the Republicans so far seem unserious about actually living up to their slogans. Both the Concord Coalition and the Center for American Progress, for example, note that the Pledge to America would likely make the budget picture worse, not better. As a recent New York Times article noted:
Republicans’ ranks will almost certainly be strengthened by a wave of conservatives, including Tea Party loyalists, who are opposed to raising any taxes and to compromising with Democrats generally — a stand Congressional Republican leaders have adopted. And incumbents otherwise inclined to make deals are now wary, Republicans say privately, mindful of colleagues who lost primary challenges from Tea Party candidates.
Common ground: That’s not to say Democrats and Republicans can’t find common ground at all. Noam Scheiber outlined a few possibilities last week. Another one would be corporate tax reform. Both Democrats and Republicans agree the current system is broken. Democrats lament that many companies don’t pay federal income tax; Republicans object to a system that has one of the highest statutory rates in the developed world. Obama has signaled an interest in lowering the tax rate in return for a simplified system with fewer deductions. Republicans will likely be willing to negotiate.
Then there is trade. Most Republicans are still strong advocates of treaties liberalizing trade. Obama has given mixed signals, and he must navigate his relationship with labor unions carefully, but according to the Wall Street Journal, “the White House appears willing to back accords with South Korea and Colombia.” And Senate Minority Leader Mitch McConnell also said trade is a subject where there’s room for bipartisan cooperation.
Oh, and then there’s the “other” tax cuts—not the Bush tax cuts, but the Obama ones. The Making Work Pay tax cut was part of the stimulus, and for the past two years meant an extra $30 or so a month in low- and middle-earners’ wallets. Obama included a one-year extension in his budget, but Congress has made no move on the issue yet. However, it seems like a natural area for cooperation—to paint with a broad brush, Democrats like helping the poor, and Republicans like tax cuts, so there’s something for everyone.
Or so you’d think. It is an expensive tax cut ($600 billion over 10 years), but Democrats seem interested in extending it, even if they haven’t acted. Senate Finance Committee “Chairman Baucus is open to extending the Making Work Pay tax credit and is working with Leader Reid and his colleagues to determine how best to address all of the expiring tax provisions, including the Making Work Pay credit, when Congress reconvenes next month,” wrote a Democratic committee aide in an e-mail. Republicans, on the other hand, seem more suspicious. Of the three Republican leadership aides I asked about the subject, two didn’t return my e-mails, and the third promised to ask his boss, but never answered definitively. And no Republican has publicly called for the specific extension of the Making Work Pay tax cuts.