Two posts consider how Build Back Better will play out in the House now that the Senate has advanced its infrastructure bill.
Slate’s Jim Newell writes:
It was quite a victory for the moderates. But the smoke from the bipartisan fireworks had barely dissipated before Sen. Bernie Sanders, the chairman of the Budget Committee, was on the floor getting revved up about the next item of business, which he’s argued “will go further to improve the lives of working people than any legislation since the 1930s.” This $3.5 trillion bill of progressives’ dreams, which will cover climate change, universal pre-k, child care, expanding Medicare, the child tax credit, Obamacare, giving undocumented immigrants a path to citizenship, taxing the rich, taking on prescription drug companies, and much more—this is the stuff progressives have been waiting to sink their teeth into, and getting the chance to do so is why they agreed to pass the moderates’ little infrastructure deal.
But now the question stands: After reluctantly holding hands with the moderates all summer, will progressives actually get to own the fall?
As attendees told Politico, Sanders told Senate Democrats in a caucus meeting, “We’re with you on this bipartisan bill, so you better be with us on our $3.5 trillion spending package.” But first that message will have to get to House moderates.
Speaker Nancy Pelosi, Newell writes:
… has sided with the progressives so far, saying that she won’t bring the bipartisan bill to a House vote until Senate Democrats also send over their reconciliation bill. This is not a case of Pelosi, in her words, “freelancing,” or issuing an edict based on how she felt waking up one day. It’s a case of the best vote-counter in Congress counting votes, and progressives having more.
That vote count went public Tuesday in the form of a good ol’ fashioned letter-off between House moderates and progressives. In one letter to Pelosi, nine House moderates called for an immediate vote on the bipartisan infrastructure bill and expressed “concerns” about the price tag of the looming partisan bill. The Progressive Caucus, however, responded with a letter of its own to Pelosi and Schumer. It conducted a survey of its 96 members asking if they would commit to withholding their votes on the bipartisan deal “until the Senate has passed budget reconciliation legislation deemed acceptable by the Congressional Progressive Caucus.” A “majority” of those members, according to letter-writing Reps. Pramila Jayapal, Katie Porter, and Ilhan Omar, affirmed that they would. A majority of 96 is a bigger number than nine, and those nine aren’t even spelling out consequences if they’re ignored.
Even if it’s progressives’ turn, though, it’s never quite their turn, is it? With moderates, for whom compromise is a virtue in and of itself, there is no real cap on what’s achievable. There’s always more compromise to be had. For progressives, the cap is discrete: Whatever the senior senators from West Virginia and Arizona can live with, because theirs are the votes the progressives’ need.
But those Senate Democrats get none of what infrastructure they want if House progressives hold fast. In theory. And House moderates haven’t the votes to hold them back, either.
Stephanie Kelton, former Chief Economist for the Democratic Minority Staff of the Senate Budget Committee (under Sanders) responded to House moderates via her substack. Their concerns that overspending would leave the country unprepared to address another pandemic wave sound “an awful lot like what former Treasury Secretaries Jack Lew and Larry Summers said in the run-up to passage of the Trump tax cuts back in 2017.”
Kelton continues:
Obviously, both men were wrong. The TCJA passed, adding an estimated $1.9 trillion to fiscal deficits over the next decade. Two years later, when COVID hit, Congress had no difficulty passing a slew of multi-trillion dollar spending bills. Not only did they have plenty of firepower to respond, they did it without raising taxes to “pay for” it. Oh, and last month, lawmakers voted to add $25 billion to the defense budget, boosting the annual appropriation to $778 billion.
As a proponent of Modern Monetary Theory (MMT), Kelton reminds readers that states that issue their own sovereign currencies don’t operate like the kitchen-table economics routinely hailed in stump speeches. (I won’t go into that theory here. Try this or What Is Modern Monetary Theory.) That’s not the only way we need to rethink how government spends, Kelton offers:
It’s why ‘infrastructure week’ has been a running joke for years, why we experience a water main break every two minutes, why forty-three percent of public roadways are in poor or mediocre condition, and why more than 46,000 of our nation’s bridges are considered “structurally deficient.” We need to stop thinking of infrastructure—physical and human—as something that should receive robust federal-funding only “once-in-a-century.” It puts too much pressure on Congress to try to cram in as much as possible all at once, and it fosters a kind of one-and-done mentality that can be used to justify future inaction.
The only real limit to spending is inflation once we reach full employment:
For the record, I don’t share that concern. We are still digging out of a very deep hole. There is still substantial unused capacity in the system. There are headwinds looming (Delta variant, expiring UI, etc.). And much of the headline inflation we’ve been experiencing can be traced to supply-chain disruptions, industry-specific bottlenecks, and other idiosyncratic pressures related to the reopening.
Those pressures could be with us for some time to come, but experts have concluded that Congress could enact both the bipartisan infrastructure bill and the proposed $3.5 trillion reconciliation bill without exacerbating inflation. Indeed, a much-touted analysis from Moody’s Analytics casts doubt on the House members’ inflation concerns, noting “Worries that the plan will ignite undesirably high inflation and an overheating economy are overdone,” adding that passing the full Biden agenda would add just enough fiscal support “to get the economy back to full employment.” But that’s not all. Moody’s also found that spending more could actually mitigate inflationary pressures over time.
But deficit hawks such as moderates Joe Manchin and Kyrsten Sinema are like the poor Jesus said would be with us always. Like now, as Newell reports:
Sinema has already straightforwardly said that she will not vote for a bill that costs $3.5 trillion. Manchin, in a statement after the budget vote Wednesday, explained that he had “serious concerns about the grave consequences facing West Virginians and every American family if Congress decides to spend another $3.5 trillion.”
Unless I missed it, neither has itemized their objections to the American Jobs Plan. They signal that they may have the guts to vote against the price tag. Do they have the guts to publicly announce what they’d like cut?
They held up their end of the bargain to this point. Now, if they want to see their infrastructure plan passed into law, they’ll get a chance to see how they like their legislation held hostage. By House progressives.