Jordan Weissmann: Back in August, you and I agreed there was little hope that Democrats and Republicans would reach a deal on further coronavirus relief unless the stock market up and crashed. One month later, Mitch McConnell and Chuck Schumer still appear nowhere close to an agreement, and Senate Republicans are getting ready to vote on a “skinny” proposal that contains about enough money to do a load of laundry and order some takeout. And the S&P 500 is only just starting to quake a little bit, mostly because investors have realized that tech company valuations are currently insane.
So, Jim, is it fair to say we’re more or less standing exactly where we were 30 days ago?
Jim Newell: If anything, we’re a little further apart. When last we left it, the discussion was between the administration, dangling $1 trillion in relief, and Democratic leaders, moving down to $2.2 trillion from $3.5 trillion. Now Senate Republicans are organizing around a bill that’s around $500 billion.
But we should be clear that Republicans organizing around a messaging bill is not “movement” toward a legislative product that helps humans. It is an opportunity for McConnell to give some cover to his incumbents and to try to blame Democrats for the standstill. (The bill, which will have a vote this week, will indeed be blocked.) Movement is when Democratic leaders and the administration come together and start to budge toward each other. There is absolutely no indication that is happening. Nancy Pelosi is at the point where she is pretending to not know White House chief of staff Mark Meadows’ name.
Jordan, even though it’s a political exercise, does anything catch your attention in the Senate GOP bill?
Jordan: As far as a messaging bill goes, it’s very bizarre. Republicans removed a new round of $1,200 relief checks, which the White House favored, and threw in a section meant to support rare earth mineral mining. It’s like they whisked away the giant chocolate cake on the table that everyone was looking forward to eating and replaced it with a dish of neodymium.
Jim: Another way of looking at it: They took out a big expense for those scared of the overall price tag and put in a Lisa Murkowski bill!
You can see vote-buying throughout this bill. Ted Cruz (and perhaps Mike Lee) got some school choice measures in here that more moderate members may not love. But then I see the word fisheries, which means Susan Collins.
Jordan: I mean, you can see the faint outlines of a method here. Back in July, McConnell came through with a lowball offer and suggested his caucus wouldn’t be able to unite around anything more substantial. Eventually, Democrats lowered their demands from $3 trillion to $2.2 trillion before everybody walked away.
Now McConnell is offering an even more surreally minimalist bill, to show that this is the only thing his caucus will vote on. Maybe he’s hoping that will make Democrats move again, for the sake of sparing some businesses and out-of-work Americans several months of pain. Meanwhile, he’s demonstrating that his caucus cares not a bit about providing aid to states, which has been the single biggest point of contention in these negotiations, even if it means cities will soon need to start cutting back on police and school budgets.
The question is whether Democrats will be willing to adjust again. And if the stock market will eventually plunge.
Jim: The only bank-shot way in which the introduction of this Senate bill could be tangentially related to “movement” is that if Republicans can get 51 votes on it—and I think they can—and pin blame for inaction on Democrats, it might fuel the agita that some House Democrats up for reelection are feeling. But there is no way that Nancy Pelosi is going to cave because Mitch McConnell passed a small bill. And the House could always revote on something closer to its preferences.
I think Democrats would be willing to move down again, but not in a vacuum in which the administration won’t move up and Senate Republicans are moving down. Each side appears able to live with the status quo: The administration is feeling good enough about the economy to not make congressional Republicans swallow $2 trillion in stuff they don’t want; Pelosi and Schumer feel good enough about the contours of the election that they don’t feel they need to settle for an “emaciated” bill that would give Republicans credit for “doing something.” (And that also contains items, like corporate liability protection and school choice, to which Democrats are actively opposed.)
Jordan: I feel like Schumer’s weakness for cheesy wordplay got the better of him this time. (It’s not “skinny.” It’s “emaciated”! And he’d been doing so well avoiding the dad humor this whole process.) But anyway, the economy really does seem to have settled into this Goldilocks groove that makes it very easy for neither side to budge.
On the one hand, there are lots of reasons to worry about where we’re headed. Businesses have slowed down their rehiring. The number of permanently unemployed—as opposed to people who’ve just been furloughed or temporarily laid off—is growing. The number of jobless claims each week is still completely overwhelming by historical standards. But overall, the unemployment rate is back to where we were after the Great Recession, around 2012. It’s miserable. Yet it’s the type of misery we’re kind of, sort of, familiar with, and no longer begs comparisons to the 1930s. So Republicans no longer feel the urgency to act at all, and Democrats don’t feel the urgency to settle for whatever they can get. At least, that’s my armchair psychologizing.
I wonder, though: Do you think that Mitch McConnell genuinely thinks things are OK enough that Trump and the GOP could pull out a come-from-behind win in November? Or has he just decided that passing a bill won’t make a difference, one way or the other, and he might as well appease the die-hard conservatives in the caucus who will be left over after an electoral rout?
Jim: I don’t know what McConnell thinks about Trump’s chances. I think he recognizes, though, that the politics of reaching a deal are pretty poor, so the priority now is on doing what he can to protect his incumbents. That means giving Collins, Gardner, McSally, Tillis, Daines, Ernst, Cornyn, and, well, himself something they can vote for, that gets 51 Republican votes, so they have something to say on the campaign trail about how It Is the Democrats Who Are Bad.
Jordan: That does not seem like a particularly effective strategy. Especially given that they stripped out everyone’s favorite bit, the checks.
Jim: Trying to navigate the contradictions of the Senate Republican conference to get 51 votes can lead to weird outcomes like “let’s take out the cool part.”
But let’s look at who is still optimistic about a deal: the savants of Wall Street! I was tickled by this passage in the Washington Post today:
Goldman Sachs economists acknowledged in a Tuesday note that “fiscal stimulus looks like a much closer call than it did a couple of months ago amid mounting signs of trouble.” Yet the team still thinks Congress is “slightly more likely than not to enact a stimulus package by the end of the September.” And Morgan Stanley is projecting lawmakers adopt a $1.5 trillion to $2 trillion package this month that reduces unemployment to 7.6 percent by the end of the year.
I just don’t know where that comes from.
Jordan: It is difficult to get a man to understand something when his entire investment thesis depends on his not understanding it.
So, a final question: In theory, Congress needs to refund the government by the end of this month or we could have another shutdown.
Mike Pence announced that he and Pelosi had come to an agreement to pass a short-term spending resolution to prevent that from happening. Do you think the deal will hold up? And …would it really be so crazy for Democrats to just let the government shut down in order to get a decent spending bill?
Jim: I think it will hold up. I don’t think either side has anything to gain with shutdown gimmicks. So it will be a pretty clean short-term bill lasting until the end of the year or so, maybe with a couple of other uncontroversial reauthorizations attached, and then they’ll all split town to campaign.
Jordan: In which case there is really no one, obvious thing on the calendar that will force everyone back to the negotiating table for a relief bill. Instead, we’re back in the ironic position where Wall Street’s belief in the inevitability of a deal is helping to prevent one from happening, by buoying stock prices. Time is a flat circle.
Jim: Cheers to structural stasis!
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