Jim Newell: On Friday, talks between Democratic negotiators and Republican negotiators on a major coronavirus relief bill collapsed after two weeks of essentially no progress. Democrats, led by Nancy Pelosi and Chuck Schumer, wanted to spend north of $3 trillion on a wide range of programs and Republicans were only willing to spend $1 trillion on a narrower range. On one of the biggest sticking points alone—aid for state and local governments—the sides were hundreds of billions of dollars apart. Democrats offered to meet Republicans in the middle, but Republicans instead decided to go ahead with some smaller executive actions from the president, which he released Saturday.
So, Jordan. What, uh, now? Is this the end of it?
Jordan Weissmann: I mean, I think we’re in a pretty bleak place right now. Donald Trump has released these executive orders, which he told the members of his country club would “take care of pretty much this entire situation.” Obviously, that’s not true. Nobody even remotely tuned in to Earth’s frequency believes that these things will do much good for the economy, or families who are trying to figure out how to make rent. Even if it’s legal, and states can actually get it up and running, the weird unemployment extension he MacGyvered together only has enough funding to last for about five weeks. But Trump thinks he’s solved the recession. And as someone I was talking to on the Hill pointed out, that means we probably aren’t going to get an actual bill until somebody in the administration breaks it to Trump that, actually, those orders he signed did jack squat and we’re facing an emergency.
Which, given the White House staff’s reputation for cold, sober analysis and truth telling to the president, might in turn mean we’re fucked until the market crashes.
Jim: Yeah, the executive actions look worse with each read. On the UI extension, there are the impossible logistics of getting it up and running—we’re still waiting on guidance from the feds about how this will even work—and then there’s the question of whether states will accept it, since it requires a 25 percent match from states that are all completely broke. The eviction language is entirely hazy about further studying the idea. And what business is going to stop withholding payroll tax when they have little certainty that Congress would eventually waive what’s owed at the end of the year? I do think that Trump’s EO got Republicans out of a difficult negotiating position and is, temporarily, helpful for them politically. But if (when) these actions prove not to work, some sort of talks will have to pick up again. I don’t know how long that process will take to play out.
Jordan: Right. And in the meantime, there actually appear to be zero negotiations right now.
Jim: Yes. The House is out until mid-September. The Senate is in session this week, but they have no votes and there are probably like four senators in town.
Jordan: I mean, I think people in Washington are starting to take seriously the possibility that there actually just won’t be another bill, which is an outcome so bad that I actually can’t really wrap my mind around it. (There’s a therapy term for that, right?)
Jim: I think we’ll get a sense of whether there’s going to be another bill over the next month as we see how the distribution of blame plays out in the public. Democrats negotiated pretty aggressively because they felt comfortable on the politics—that Republicans, who are trying to protect both the presidency and a Senate majority, would need to bend to them. Which leads me to another hot burning question in the Discourse: Did Democrats overplay their hand? Even if they were comfortable with the politics of no-deal (and we’ll see how that turns out), they really do need help for their states.
Jordan: Before answering that question: I think that no matter what happened, unless Pelosi got Republicans to cave and accept a $3.4 trillion deal, people would be second-guessing her strategy. Usually the left gets on her case for giving in too easily. But I literally learned about Trump’s executive order announcement from a left-wing journalist tweeting about how she’d been outfoxed. Which seemed silly, given that all Trump is actually doing is letting some people get evicted right now. BUT ANYWAY … no, I don’t think Pelosi overplayed her hand.
At the end of talks, she and Schumer offered to come down $1 trillion if the GOP went up $1 trillion. And Mnuchin and Meadows said no dice. And the reality is that a $1 trillion bill, like what Republicans asked for, is completely insufficient given what we’re facing right now. It just wouldn’t be worth accepting.
So for once, Democrats held firm and refused to be the “responsible” ones. I think that was the correct decision. But I don’t know. You?
Jim: I agree! I was just asking to test if you’d gone soft.
Jordan: LOL. No. This shit is radicalizing me.
Though I realize I’m saying that from an intensely privileged place where I’m not personally facing eviction, so I don’t envy Democrats who actually have to do this negotiating. Do you think Pelosi and Schumer had any idea the GOP would take its ball and go home?
Jim: Pelosi and Schumer’s leverage came from 1) Republicans being so divided, meaning McConnell and the White House would need mostly Democratic votes to move anything; and 2) Republicans needing a bill to protect the presidency and Senate majority. I am not sure that they anticipated the White House taking an executive action path that tempered their leverage in the latter category. But, if these executive actions don’t meaningfully mitigate public suffering, then Republicans will be back to needing a bill.
Jordan: But what if … what if they just decide that they don’t need it? I don’t know, maybe I’m just too deep into conspiracy theories about the Postal Service at this point.
But what if Mitch McConnell just decides the polling is going to be terrible no matter what, and literally the only hope the party has is to keep people from voting anyway?
In which case, avoiding a deal, and making sure Democrats can’t do anything about what’s happening with vote by mail, which they want funding for in the legislation, actually serves their purposes? I know I’m three steps from tinfoil-hat territory here, but [gestures broadly at everything].
(Also, this I realize slightly undercuts my position that Democrats needed to take a firm negotiating stance. I’m a storm of clashing emotions right now.)
Jim: I think an appropriate big-picture question here is: How cooked do Republicans think Trump is? I feel like I’ve been hearing a lot more bold declarations against spending from people like Ted Cruz, Rand Paul, and Rick Scott when I’ve been going up to the Senate the last month, and am getting major 2024 vibes. They want their hands clean for the next year when Republicans are out of power and it’s time to talk about how the party has Lost Its Way. But Trump hasn’t given up on his reelection, and McConnell has said he’ll put whatever agreement the White House reaches with Democrats on the floor.
I just think if you see Trump’s numbers have reached new lows in a month because there hasn’t been meaningful action, there will be action.
Jordan: So either Trump’s polling drops, or stock prices start to drop—assuming that investors haven’t priced in the possibility of no deal. (Which I don’t think they have. Because stocks keep shooting up like everything’s dandy.)
Jim: Judging by today, seems like the markets have still priced in a deal being reached? Is this right? Not a “big stocks guy” over here.
Jordan: I am not a big stonks guy either. But yeah, it seems like Wall Street is still sort of just assuming that Washington will pull something together before everything collapses so terribly that large companies actually feel the shocks.
I had this one grim back-and-forth with a Hill aide where they were actually worrying stocks might only fall gently by, like, a couple hundred points at a time over a month or two, because if the Dow doesn’t lose like a gajillion points in a day Congress doesn’t notice.
Jim: It’s true, the one catalyzing economic metric in Congress is the Dow having a 1,000-point loss because it means they have personally lost a noticeable amount of money that day.
Jordan: I mean, the one other saving grace here—though I hate to call it that—is that small businesses are also fucked. Big corporations got a permanent bailout via the Fed, but a lot of small- and midsize companies have been banking on either a new round of PPP or a successor program. Without it, they’re in a lot of trouble, and that could put a little pressure on the GOP to act.
But, again, Trump thinks he solved everything, and Mark Meadows certainly isn’t going to tell him otherwise.
Jim: That goes back to the issue of Republicans needing a bill by conventional political considerations … but also maybe deciding they don’t need a bill.
I think this comes down to either one side getting pounded over the next month and moving toward the other’s position, producing a deal, or a muddled picture and the usual blame-game talking points carrying us through the election. Also, the stonks.
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