Moneybox

Democrats Are Turning Their Big Spending Bill Into Absolute Trash

Biden sitting in an armchair with his legs crossed and a rolled up piece of paper clutched in his left hand at the 10th anniversary celebration of the Martin Luther King Jr. Memorial. He is wearing aviator sunglasses and looking to his left with a stern expression. An American flag hangs from a pole behind him.
Come on, Joe. Chip Somodevilla/Getty Images

It feels like Democrats are losing the plot.

As the party began trying to piece together its big social spending and climate package, a split emerged between lawmakers who wanted to pass fewer programs (but do them well) and those who wanted to pass more programs (even if it means doing them poorly). A big part of this argument boiled down to how long policies should be funded for. The less-is-more crowd, dominated by party moderates, wanted to set policies in place permanently. The more-for-less brigade, dominated by progressives, wanted to fund programs temporarily in order to make their budget math work, essentially rolling the dice on the idea that they’d be renewed before they sunset.

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At the moment, the side intent on doing lots of things poorly in order to check off items on its to-do list appears to be winning the argument, hands down. And as a result, the bill quickly seems to be degenerating into a pricey heap of policy trash, much of which will probably blow away within a few years.

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Take paid leave. Democrats initially envisioned an expansive program that would provide 12 weeks of leave for new parents and people who get sick or have to take care of a loved one. But it was costly, probably somewhere above $500 billion. Democrats could have massively brought down the expense by focusing only on paid leave for parents, which would have fixed one of the most obviously embarrassing gaps in our family policy (we’re literally the only developed country in the world that doesn’t guarantee it, after all). But instead, they’re considering this Hefty bag of kitchen scraps, as the Washington Post reports :

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In private meetings with Democrats on Capitol Hill over the past week, including one late Wednesday, White House officials have put forward a cost-cutting alternative. They pitched a new, roughly $100 billion plan that would offer four weeks of paid parental, family and sick leave beginning in 2024, according to three people familiar with the matter who spoke on the condition of anonymity to describe the conversations.

The program would be smaller in size and shorter in duration than what House Democrats unveiled earlier this year, and it would not be authorized on a permanent basis, these people said, though they cautioned that the details are subject to rapidly changing talks and could still evolve.

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Biden also confirmed the four-week plan during a town hall on Thursday.

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Now, I do not know for sure if this would be the crappiest parental leave program in the entire world. But I am fairly confident it would be the crappiest in the OECD—aka the club of rich and semi-rich nations. Even Mexico manages to offer 12 weeks. Today, the average American who takes unpaid parental leave under the Family and Medical Leave Act spends about six weeks away from their job. This wouldn’t even cover that.

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Or consider Obamacare itself, the cathedral to neoliberalish policy solutions that Democrats are apparently intent on never, ever actually completing. Democrats added major but temporary improvements to their marquee health law as part of the coronavirus relief bill they passed in March, by making its insurance subsidies much more generous and widely available, ensuring that fewer middle-class families would be priced out of coverage. (Previously, Americans could only get subsidized coverage if they earned less than 400 percent of the poverty line, or about $106,000 for a household of four.) The party would now like to extend those fixes for longer, while also offering a version of Medicaid in states that have refused to expand it. Together, the changes would finally patch the biggest remaining holes in the Affordable Care Act.

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In theory, lawmakers could do all of this permanently, and thus finally finish the job they started in 2010. But that would be expensive: The Congressional Budget Office recently estimated that over 10 years, the package would cost around $532 billion, more than Democrats really want to devote to this issue (especially since a lot of the beneficiaries live in red states that almost never vote Democrat). And so the Biden administration is talking about extending the new Obamacare subsidies for just an additional three years, according to Politico, taking them to 2025. The Washington Post suggests it might be four. Either way, there is a strong chance that the GOP will control at least one house of Congress by then. And given that most Republicans would rather walk over broken glass while being pelted with beer cans than vote to expand the ACA, it seems somewhat dicey that these reforms will last.

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Then there’s the child care program, which for several days now has been the subject of a complicated but raging debate about whether it’s an abject disaster in the making. Without rehearsing every detail, the basic question is whether Democrats are about to essentially repeat the mistakes they made with Obamacare, by passing reforms that increase the quality of child care services and increase access to the poor while simultaneously making it impossible for parts of the middle and upper-middle class to afford day care. One way to avoid this issue in the long term would be to simply cap what all families have to pay at some reasonable amount, which for a moment looked like it would be the party’s approach. But on Thursday a Democratic Senate aide told me that the conversation seems to be headed toward limiting subsidies to families that earn less than 200 percent of the state’s median income. If so, lawmakers are getting ready to make the same critical mistake that they’re currently trying to fix when it comes to health care policy. History is on repeat, but skipping straight from tragedy to farce. (Also, the funding would probably be temporary.)

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I could go on. For instance, it looks like instead of a full new dental benefit in Medicare, Democrats might settle on a more limited voucher that wouldn’t really be sufficient for serious care. But you get the idea. Instead, I want to talk about the bigger picture. Democrats really seem to be gambling on the most dangerous possible strategy with this bill, both from a political and policy perspective.

At the moment, Democrats could take this bill down four different paths:

First, they could pass a few good programs and make them permanent. This has the obvious advantage of making solid, potentially popular policies that will be hard to dislodge.

Second, they could pass a slightly larger number of stingier programs, but also make them permanent. The downside here is that voters might not be as happy with the policy results, but it will probably be possible to come back and fix up any flaws the next time Democrats have a trifecta in 10 years or so. This is basically the Obamacare model. The law has waned and waxed in popularity over the years. But one reason it survived the GOP’s many assaults is that all of its main pieces were permanent. Despite having a trifecta, Republicans simply couldn’t repeal the law in 2017 because three of their senators—Susan Collins, Lisa Murkowski, and John McCain—voted no. If the ACA had been scheduled to lapse, however, the party wouldn’t have needed 50 votes. Trump and co. could have just let it happen, and the dissenters wouldn’t have made a difference.

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Third, they could pass a few good initiatives temporarily, with the hope that the results will be so popular that Democrats will either ride to reelection and renew them or Republicans will feel compelled to keep them around. There are some cases where this strategy might work. For instance, I am pretty sure that if Democrats manage to fund a new Medicare dental benefit for even a few years, it will be renewed from now until the universe freezes over because nobody in Washington wants to take the political risk of stripping a new entitlement from seniors (hell hath no fury like an AARP member scorned).

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But overall, it seems like a sort of dubious gamble, given the structural disadvantages Democrats face in Congress and the fact that elections are often determined by macro factors like the state of the economy rather than voters’ responses to policy. Again, it seems highly likely that Republicans will control at least one chamber of Congress by 2025, if not sooner. Democrats might be able to do some horse trading with the GOP by agreeing to renew parts of the Trump tax cuts that are set to expire that year in return for, say, renewing paid leave. But it’s not clear how much leverage the Biden administration would really have in that scenario, since many of the Trump cuts benefit middle-class households whom Biden has promised to protect from tax hikes (the unpopular corporate rate cuts are already permanent).

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Fourth, they can pass lots of half-baked legislation on a temporary basis, which seems to be the path the party is now on. The inherent problem with this gambit is that Democrats probably aren’t going to get reelected campaigning on a bunch of half-measures that some voters might actively hate, such as, say, a potentially dysfunctional child care program that alienates your brand-new base of upper-middle-class voters in suburban swing districts by making it impossible for them to find a day care option. And if Republicans win, they won’t feel many compunctions about letting those sorts of programs expire.

Why are Democrats bumrushing Door No. 4? There’s lots of blame to go around. It starts with the fact that Sens. Kyrsten Sinema and Joe Manchin simply don’t want to spend enough money to enact the party’s entire agenda. Meanwhile, progressive members have refused to prioritize issues, and are instead trying to partially cover as many of their bases as possible. Part of the reason may boil down to magical thinking about their chances of fixing temporary programs down the line. But also, fundamentally, Democrats are a big-tent party with members with a vast array of genuinely worthy pet causes that each come with their own, specific coalitions that members feel the need to placate. As a result, the party’s agenda gets pulled in a billion different directions, to the point where it starts to shred. Republicans don’t have these problems to the same extent because they can simply pass tax cuts that broadly benefit swaths of their support base like “corporations” and “wealthy business owners,” even if they create some losers along with winners, and then spend the rest of their time harping over culture issues. It’s naturally easier for them to focus.

Regardless of the precise reasons, though, this is where we are. Democrats appear to be squandering a historic opportunity to make permanent fixes to America’s social safety net, in favor of a scattershot effort to make all of their constituencies at least a little bit happy for a few years. Maybe they’ll change course. But if not, they shouldn’t be surprised if one day the garbage they serve up gets tossed out.

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