Politics

The Last Time Biden and McConnell Hammered Out a Stimulus

In 2009, Democrats had 57 seats in the Senate. Now they’ll be lucky to get 50.

Biden smiles and stands with his arms crossed beside Obama, seated, signing the stimulus bill on a desk, with American flags behind them
President Barack Obama signs the American Recovery and Reinvestment Act beside Vice President Joe Biden in Denver on Feb. 17, 2009. Reuters/Larry Downing

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When I look at the Biden transition team assembling, I get major flashbacks to the beginnings of the Obama administration—the dire economic news, the talk about healing partisan divides, a general feeling of elation and dread, swirled together. Democrats had majorities in the House and the Senate back then, and they managed to pass the 2009 stimulus package, the American Recovery and Reinvestment Act, less than a month after Barack Obama was inaugurated. Now, with COVID, Biden will need to do it all over again—but very possibly without a Senate majority. On Wednesday’s episode of What Next, I talked to Politico’s Mike Grunwald about what Biden and his team can learn from their last stimulus battle and what to expect from the next one. This transcript of our conversation has been condensed and edited for clarity.

Mary Harris: The biggest challenge for Biden is going to be the coronavirus. What are the signals the Biden campaign is sending about how he’s planning to approach this problem, both economically and health-wise?

Mike Grunwald: The two things to know about Biden as he prepares to deal with either a Republican Senate or a completely divided Senate is that he is a deal-maker, but he is also not a fool. He is going to be looking to find some kind of compromise with [Senate Majority Leader] Mitch McConnell. He was the Obama administration’s sort of designated McConnell whisperer. He was the one they sent to go talk to Mitch.

How did that happen?

Biden was the one who spent all those years in the Senate. Biden was the one who had the relationship with Mitch McConnell where they feel like they can talk honestly with each other. And Biden does not try to convince McConnell of anything. He knows that McConnell is McConnell. Biden was very much about what’s a gettable deal, what’s your bottom line, where can we find some common ground, and where are we just going to have to agree to disagree?

The relationship between Mitch McConnell and Joe Biden—some people have characterized it as friendly. President Obama recently said they were not friends, but they knew each other. I wonder how you would characterize it.

Businesslike. So when he’s dealing with Mitch McConnell, he’s not saying, “This is a terrible person who disagrees with me about everything and has propped up Donald Trump, who puts kids in cages.” Instead, he thinks, “This is a guy who had polio when he was young, who has fought for everything, who has his beliefs and they aren’t mine, and let’s see what kind of deal we can work out.” He told me that during the transition in 2008, seven different Republican senators told him, “We’re not going to be able to support you on anything big the entire Obama administration. That’s just the way it’s going to be. The order came down from the top. If Obama was for it, we’ve got to be against it.” And that made it very difficult to cut deals, but there were still deals that Biden managed to cut because there were fiscal cliffs and debt ceilings and things that just had to be negotiated, and Biden was the guy who did it. He’s not going to have any illusions that he’s going to have some kind of honeymoon where Mitch McConnell is going to give him a year to do the kind of stuff he wants to do. But there may be things that he’s able to pick off a few Republicans, like he did on the original stimulus. And there may be things where he may be able to work out some kind of larger deal.

Biden’s right-hand man is going to be a guy named Ron Klain, and he’s been around Joe Biden for a very long time. Who is he, and what do you think his approach might be?

Ron Klain worked for Biden on the Senate Judiciary Committee, where he really ran that. He was Vice President Gore’s chief of staff. He became kind of famous during the Florida recount—he was overseeing the Democratic lawyers. And then he was Vice President Biden’s chief of staff and he ran the Recovery Act. He was considered just an excellent manager, really rode herd. They had a nice sort of one-two punch, where Biden every day was on the phone with governors and mayors, Republicans and Democrats, saying, “You’ve got to get the money moving,” “You’ve got to do this,” “You’ve got to do that,” and then Ron was really in charge of the follow-up. Ron was in charge of making sure that everything Biden said happened.

I’m wondering how negotiating the stimulus deal back in 2009 changed Klain’s perspective on Washington.

He saw the way the Republicans turned against things like infrastructure, unemployment benefits, even small-business tax cuts, things that had never been controversial in the past. Republicans, including Mike Pence, saw their opportunity to get out of the political wilderness was just pure obstructionism. To fight Obama on everything. Obama had promised that he was going to be a post-partisan president, and by refusing to cooperate, Republicans could make him a liar.

Now, Joe Biden has run again on trying to turn down the temperature in Washington to unify the country, we’re all going to get along. And he can’t control that. The Republicans get a vote, and if they don’t want him to be a bipartisan leader, he won’t be. So I think that’s something that Klain is already concerned about, and he’s going to be somebody who’s certainly looking for deals, but is also going to be trying to make the bureaucracy work in case there are no legislative opportunities—what can we do just through the executive branch?

It makes you wonder whether this time around they’re really thinking about doing it differently.

One of my favorite stimulus stories—this is actually even before Obama took office—there was a big meeting in Chicago with his economic and political team and they were talking about how to put the stimulus together. Rahm Emanuel, the chief of staff then, who was a real political guy, he said, “Let’s just send everybody checks,” like Bush had done before and Trump would do later. But the economists on the team said, “Well, there’s behavioral economics research that shows that if you just give people a big chunk of money, they’re more likely to save it and less likely to spend it, because when they notice it, they say, ‘Oh, I’ve got to put this money away,’ so it’s better if they don’t notice it.” And Obama was very “we’re going to do the right thing, we’re not going to be political.” So they did that, and they just dribbled it out through withholding a few dollars a week. And it was kind of effective, but nobody noticed it. Ninety-five percent of the country got a tax cut, and less than 10 percent of the country was aware they got a tax cut. And that’s pretty lousy politics. It’s sort of like sending your romantic interest roses, but forgetting to sign the note.

Over the last week or so, the situation with COVID has become so dire around the country, and it seems like the current president, Trump, is so disinclined to act, that I wonder if by the time Biden assumes office, dithering won’t be an option.

Dithering is always an option. [laughs] This was very much the thinking in 2009: We are losing 800,000 jobs a month. We are about to fall into a depression. Surely the Republicans are going to play. But they didn’t. And it was only really Joe Biden who rode Amtrak every day with Arlen Specter and managed to convince him to come along. He called Susan Collins two dozen times during a one-month period. There she was in Caribou, Maine, constantly very spotty cell service. But Biden really worked it. And that’s really what he does.

I think if anybody can cut these deals, Biden is probably that guy. But people should understand that he’s going to have to give stuff away. They had this big idea for a $10 billion school construction project in the 2009 stimulus, and Susan Collins didn’t like it, so it wasn’t in there. Arlen Specter insisted, “OK, you can have my vote, but you have to spend $10 billion on the National Institutes of Health.” So they were like, fine, we’ll do $10 billion for NIH. And then it turned out that every time Republicans found out about some NIH study where they were testing teen sex habits or seeing how monkeys react to cocaine, it would be front-page news for a week, like “Ha ha ha, the stimulus is funding cocaine monkeys.” But as Ron Klain pointed out, if we didn’t have the cocaine monkeys, we wouldn’t have had tax cuts and roads. So there’s going to be compromise. It’s going to be stuff that people don’t like. Biden is a guy who’s not going to let the perfect be the enemy of the good. And it remains to be seen whether the Democratic base is willing to accept that.

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