Headlines to Consider
- Huffington Post: Progressive Democrats Stare Down Moderates In Battle Over Biden Agenda
- Yahoo!: Biden gives progressives a win with infrastructure delay
- The Atlantic: The Progressives Have Already Won
- Huffington Post: In A Win For Progressives, Nancy Pelosi Raises The Bar For Infrastructure Vote
- New York Times: Progressives Flex Muscles on Biden Agenda, Adopting New Tactics
Who’s In Control?
Despite all the chatter that Progressives have already won, they haven’t.
For sure, Biden has embraced the Progressive agenda. But that does not put the Progressives in control.
Democratic senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona are in control.
The House can do whatever it wants but nothing flies unless both Manchin and Sinema are on board.
Something Has to Give
Please note Democrats Weigh Cutting Programs or Reducing Scope to Trim $3.5 Trillion Bill
Progressive Democrats, who backed the $3.5 trillion level, acknowledged Sunday the need to scale back the legislation to reach a compromise, though they said there’s no agreement on how much.
“There’s no number on the table yet that everyone has agreed to,” Rep. Pramila Jayapal of Washington, the chairwoman of the Congressional Progressive Caucus, said on CNN’s “State of the Union.” She later said, “This is the beginning of a negotiation.”
There is a Number
For starters, there is a number.
Manchin set the number that he will support at $1.5 trillion, quite a cut from the $3.5 trillion Biden wanted and $6.0 trillion that the Progressives actually wanted.
Two Options
- “There are two options,” said Sen. Tim Kaine (D., Va.). “You could take pieces out, or you could start a piece in year 2, rather than year 1.
- Or you do some for five years, not 10, and count on it being so popular that when you come back in year six, well of course we’ll want to do it.”
AOC, Bernie Sanders, Manchin
- Rep. Alexandria Ocasio-Cortez (D., N.Y.) also floated the possibility of funding programs for shorter durations, telling CBS’s “Face the Nation” on Sunday, “We do have to compromise.”
- Sen. Bernie Sanders (I., Vt.), who originally argued for spending beyond $3.5 trillion, said compromise is needed but $2 trillion was “too little.”
- “Those programs will never end,” said Sen. Joe Manchin (D., W.Va.), a key centrist in the talks. “Once you start doing something it becomes ingrained into it.”
It’s clear who is in control here, and it isn’t AOC nor Bernie Sanders.
Alleged Key Question
“Here’s the key question: What’s the way to get something funded for a long time? And the way is to make it big enough and universal enough and important enough so that the people demand it continue,” said Rep. Andy Levin (D., Mich.), a member of the Congressional Progressive Caucus.
That is precisely the trap Manchin wants to avoid.
Sinema is more difficult to read, but whatever compromise does pass will not be at the whims of the Progressives.
Republican Comeback
Here’s the real key question: Do Progressives Prefer Trump to Compromise?
In both the Senate and the House, centrist Democrats hold the swing votes for passage of any Democratic initiative. In the House, 12 Democratic members represent districts determined by the Cook Political Report to lean Republican. Progressives could not even win the Ohio special election primary in a very Democratic and urban district.
The demands that Manchin swallow the progressive agenda are even more absurd. Not only did West Virginia go for Trump with the second largest percentage, but Manchin barely won re-election in 2018. Importantly, Manchin soundly defeated his progressive foe in the Democratic primary by more than two-to-one.
The 2020 election was an even more stark warning. Biden barely beat an incumbent president who had negative approval ratings throughout his presidency, suppressed his own vote, fumbled the coronavirus response and was heavily outspent. In addition, Biden had the worst coattails of any incoming president since 1960. Republicans gained 14 seats in the House and only lost one Senate seat (the two Georgia seats went to a run-off). In spite of having to defend 23 seats, the GOP only lost two in states carried by Biden and came within a whisker of flipping Michigan.
For progressives, the political portents are very bad indeed. Pushing Biden and the centrists over a cliff is more likely than not to usher in Republican majorities in both houses of Congress and set the stage for a Trump comeback.
Trump Comeback?
I highly doubt it. Trump more likely wants to play king maker.
Regardless, tax hikes and the Progressive clean energy proposals are recessionary, even stagflationary.
Anything Democrats can ram through with 50 Senators can easily be reversed by 50 Republican Senators if Republicans win the next presidential election.
Meanwhile, midterms are coming up.
I believe it’s almost a given that Republicans win the House. The incumbent party normally loses seats in midterms and Biden’s approval ratings are in the gutter.
That setup gives the Progressive some sense of urgency. But independents and moderates who voted for Biden are highly likely to reverse course on Progressive madness.
Future is Now
The future is now appears to be the battle cry of the Progressives. Regardless, it is not their call.
Manchin and Sinema, not the Progressives, will decide what’s next.
Thanks for Tuning In
Like these reports? If so, please Subscribe to MishTalk Email Alerts.
Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.
If you have subscribed and do not get email alerts, please check your spam folder.
Mish
The Biden White House isn’t being clear about what Biden supports. Does Biden support some of the demands of the progressive caucus and, if so, which ones does he support? Or does Biden support everything the progressives want?
of ignoring the fight over raising the debt ceiling, were suddenly
taking the once-unthinkable possibility of a U.S. debt default
seriously. Treasury Secretary Janet Yellen warned lawmakers at a Senate
hearing of “catastrophic” consequences if they failed to suspend or
raise the debt limit before the government hit it, which the Treasury
estimated could come as soon as Oct. 18.
time the government has flirted with the debt ceiling, an artificially
imposed borrowing limit that Congress used to raise routinely, but that
in recent years has become a partisan cudgel. Nor is it the most
immediate economic threat coming out of Washington. A government
shutdown, which could happen as early as Friday, would furlough federal
workers and disrupt other government services.
government debt default is what particularly worries market watchers.
Here are two of the main scenarios being discussed on Wall Street as the
debt ceiling closes in.
brush with a ceiling-induced default in 2011, the first in a while,
riled markets and led many to predict that the U.S.’s ability to borrow
would be permanently affected: Standard & Poor’s downgraded the
country’s credit rating for the first time in 70 years. (A decade later,
interest rates are lower than ever.) Similarly, in 2013, during another
debt-ceiling standoff, short-term government borrowing rates shot up,
but quickly fell back to where they were before once the debt ceiling
was raised. In both cases, the broader economy — jobs, house prices and
the like — over time brushed off the temporarily higher borrowing costs.
happened in 2011 or 2013. The main problem: Treasuries are widely used
as collateral to back up short-term loans. If the U.S. defaults on some
its bonds, lenders may be unwilling to accept those tainted securities
as collateral. Worse, Wall Street’s trading systems have not really been
set up to sort defaulted Treasuries from the rest, because few thought a
U.S. default was possible. This could lead to a short-term lending
market that grinds to a halt, like at the beginning of the financial
crisis.
There is only a handful of Democrat legislators that are
keeping the party from going full Progressive is my interpretation. The rest
are either completely in or too cowardly to resist. The Progressives don’t mind
losing the midterms or even the presidential elections as long as they can keep
their bastions in their grip. The model they follow is the Chicago one where even
governing with gross incompetence doesn’t hurt them because mysteriously no
matter how bad they are the elections still end up in their favor. That is a
powerful method for staying in power eternally.