Finally, a Deal

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S1: Every few weeks I’ve been calling up Slates Jordan Weissman to check in on Congress, specifically whether Congress is planning to vote on additional coronavirus stimulus anytime soon. His answer was usually no. In September, Jordan said the economy was bumping along just well enough to squelch any motivation for a deal. In October, the president seemed ready to make stimulus happen, but Congress couldn’t agree on what it should look like. Now it’s December. We’ve got a stimulus deal, but is anyone happy with what we got here?

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S2: I think Democrats are relieved, different than happy.

S3: I don’t know if anyone’s like, you know, you know, no one’s popping champagne corks. It’s a B plus work, right? Like, I mean, and, you know, I hate being one of those journalists being like Congress didn’t do a great job because, like, Congress isn’t really one, you know, isn’t a person. Right. Like, you can’t yell at Congress. So it’s it’s different competing interests.

S1: In this case, all these competing interests meant everybody got a little something and everybody lost a little something. To the lesson for me, looking at what’s happened over the last six months is that it’s got to get really bad for everyone to come together and actually agree on something in this political environment, like really bad.

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S4: I think that’s actually almost. Too optimistic of a read of what’s taking place here.

S3: I think there’s just sort of a sense of realism now that this could be their last best shot to get a lot of relief money before Joe Biden is president. Mitch McConnell might not pass something after this. So you kind of have to take what you can get right now.

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S5: Today on the show, is this stimulus plan a congressional Christmas gift or more like a white elephant? I’m Mary Harris. You’re listening to what next? Stick with us.

S1: When Jordan said I was too optimistic for thinking the stimulus bill got passed because of surging coronavirus numbers, what he meant is that he was surprised that stimulus happened at all. And he can sum up what got us here in one word, Georgia, without the runoff elections that are about to take place there, Jordan says a compromise would not have been possible. Mitch McConnell was even quoted telling his caucus that the reason this bill was getting off the ground was because David and Kelly were getting hammered in Georgia. That’s Senators David Perdue and Kelly Lefler. I don’t know if you want to call it the bill that David and Kelly and Mitch built.

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S4: Oh, I was I was going to call it the the David Perdue and Kelly Loffler Protection Act of 2020.

S6: Just sort of. That’s all I’ve I’ve I’ve labeled it.

S4: I have no idea how you pronounce that acronym. Like, that’s just just a string of consonants or whatever.

S1: This new bill does provide some of what the Democrats wanted, like one time 600 dollar payments to most people, an extension of unemployment insurance and the eviction moratorium, along with funding for public transportation. The bill even allows U.S. citizens who are married to undocumented immigrants to get in on direct payments, something the Keres Act didn’t do. What isn’t in the bill are some other high priority items for both parties to understand why negotiations went the way they did. Jordan says you’ve got to start all the way back at the beginning of the month when a bipartisan group of senators announced they were ready to make a deal.

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S4: So here’s what happened. The original bipartisan framework that Romney, Collins and Manchin unveiled included about 160 billion dollars of aid to state and local governments. That was the big ask from Democrats. That was like that was the thing they were really pushing for that Republicans didn’t want because they saw that as a blue state bailout, quote unquote, which I think is ridiculous. But we can talk about that another day. In return, Republicans were going to get some form of a liability shield that was going to protect employers and businesses from lawsuits over covid.

S1: So you get covid at some business. You can’t sue them.

S4: Or if more importantly, if an employee gets covid on the job, they can’t sue. Right. Or it’s much harder for them to sue.

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S1: And Mitch McConnell had set that up as like the Hill he was going to die on.

S4: Right. That was that was his red line, he had said. And that was the thing Democrats absolutely did not want. And I think it’s actually worth because this this issue has been confusing for some people. Not everyone understands why Democrats were so opposed to this and frankly, why Republicans wanted it. Nobody really expects there to be that many personal injury lawsuits related to covid know there have been only a trickle so far. Mitch McConnell said there would be like this tidal wave of damage. It hasn’t materialized. The issue is mostly that workers rights groups and unions saw that the threat of liability was what was keeping employers from being totally irresponsible and the threat of being sued, even if the chances of it were small, was making them take precautions that, you know, were potentially saving their their employees lives. So originally, the idea was that you would trade these two things that each side didn’t want. Right. The Democrats would get their state aid. Republicans would get some version of the liability shield. In the end, they just could not come to an agreement there. And so they dropped both. So neither side got either. Neither side got either. And at the same time, there was this push from some Republicans like Josh Hally, who wants to kind of, you know, brush up his conservative populist credentials. And on the left, you had Bernie Sanders and EEOC, Alexandria Castillo Cortez demanding checks. Right. They wanted another round of payments. And so once you had dropped state and local aid from the deal that made more room to just put checks in.

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S1: But I know that you weren’t actually really in favor of stimulus checks as this deal was being hashed out. And I wonder if you can explain your reasoning there.

S4: I’m not AntiSec. I am not an anti Check-Out. I do not I, I think checks are good, but given a choice, I would have wanted state and local aid checks are really, really good for helping all the people that unemployment insurance isn’t reaching. And that includes some of the poorest people in America. It includes some people who have had their hours cut but are still employed. It includes people who have been frozen out by malfunctioning unemployment systems.

S1: You called it like the gorilla glue. Like it sort of goes into the cracks and helps people who might need help but might not get this other kind of assistance.

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S4: Exactly. If for some if you need help, but you’re not totally out of a job or you’re just not eligible for unemployment insurance or some reason checks are what’s going to help you.

S1: But at the same time, checks are also going to go out to people who are fully employed.

S4: Exactly. And frankly, most of the money is going to go to people who are fully employed. Like that’s that’s sort of the downside of it is that you’re giving a lot of money, people who just do not strictly need it, whereas state and local governments are, you know, not in good shape right now. Right. I mean, the fiscal situation is not as dire as people thought it would be several months ago. Right. Because the economy is a little bit better. But, you know, Moody’s recently came out with a report saying that states are looking at a one hundred and seventy one dollars billion shortfall over the next two fiscal years. That is that is not a small amount of money. And it means that eventually they are going to have to cut more services and cut more of their workers. And that is going to obviously cause individual hardship and it’s going to slow the recovery down the line. It’s it’s not great. And so if I if I’d had to choose personally, I you know, again, this is this is not talking about an ideal world. We’re know in an ideal world you would have both checks and state and local aid, but given one or the other, I would have picked helping state and local governments. In the end, we got checks. That was that’s sort of the trade off.

S1: But it seems to me like the things the parties are trading aren’t equal because you have the Republicans trading away this liability shield, which seems kind of like a bonus thing, larger goal they wanted versus the Democrats trading away aid for state and local governments when that’s about to be a full blown crisis.

S4: Right, I mean, I don’t think yeah, I don’t think it’s fair. I don’t like it, but it is what it is. It is what it is. And what it was a little bit frustrating about the liability shield debate is that there was no real way to put a number on how many lives would be at risk if you were to give businesses protection from lawsuits. Right. You couldn’t quantify it. There was just no way to know. It might be the case that not a single extra person would die because of that liability shield. I mean, we just we just have no idea. I mean, I tend not to think that’s the case, but it was really, in the end, sort of a matter of principle, like where are you going to do something that you suspected would put more people’s lives at risk and exacerbate this public health crisis in the middle of a pandemic and do something that the unions and that your, you know, some of your core supporters were so vehemently against. And that was why it was it became just such an intractable issue, why it was something Democrats really couldn’t swallow. The other thing the Democrats had to fend off was this really wonky demand from Republicans involving Federal Reserve emergency lending programs, how much power the Fed has? Yeah, this was sort of the last big conflict they had to resolve before they reached a deal on Sunday night. And you know, really what the fundamental question at the core of it was whether or not Republican presidents should have more tools to fix the economy than Democratic presidents. Some saying that before I explain what the conflict is over, because the conflict is extremely wonky. So it’s helpful to know like what the kind of subtext here was. But what happened was that the Federal Reserve created a series of emergency lending programs. Republicans essentially wanted to wind these programs down before Joe Biden took office, in part because there was thinking that he could do more with them. He could use the state and local. One, for instance, is a backdoor way to get aid to cities and states. But it was they really wanted to kind of bring these programs to an end. And Stephen Utian had started doing started that process administratively. And as part of this bill, they really want to kind of put a dagger in them. And this Republican Senator, Pat Toomey, had pushed for things that wouldn’t only widen these programs down, but would ban the Federal Reserve from creating new ones that were even similar to them in the future, like nothing like these programs shall ever exist again. And this was a really big deal for Democrats, in part because it wasn’t just ending powers that the Fed had acquired thanks to the Keres Act. It was actually putting new limits on the Fed’s powers that it had before the Kahrizak. It was essentially rolling back powers that they had written into the Dodd-Frank bill back in 2010. Right. Like this was a really big ask. And it was like they were right. They wanted to make a permanent change to the Federal Reserve Act that would strip tools from the central bank. Right. As a Democratic president was entering office. And it was just sort of like a giant fuck.

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S6: You like that is sort of like, you know.

S1: And to be fair, Senator Toomey himself said, yeah, language was a little broad.

S4: And so in the end, Schumer, Pelosi managed to strike a deal that didn’t clip the Federal Reserve’s powers forever. Right. But again, it was sort of this fundamental philosophical issue. It’s not clear there were any economic stakes here in the short term. It was just like, should Democrats have to accept an offer in order to save the economy that disempowers them and denies them the same tools that the Republican president had?

S1: But what I’m hearing you say is that what the Democrats had to do here was fight very, very, very hard to just get the basics.

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S4: Yeah, yeah, yeah. I mean, that’s sort of I mean, that’s the problem is that Democrats want to do more to save the economy and Republicans fundamentally want to do less.

S7: That’s like the fundamental conflict when we come back. When this bill runs out in a couple of months, is Joe Biden going to be able to get another one passed?

S1: Something that stands out to me looking at this bill is that it’s a little like a ticking clock because we’ve given ourselves till spring to work some things out. You have this unemployment insurance. It’s like an extra 11 weeks, not massive.

S4: Is that enough time to set the economy right again, so this is actually my biggest concern about this bill, which is that it is really a bridge to the spring, right? It gets us to late March, early April. At that point, the aid is going to start to expire and kind of run dry. And what then? Right. Like if if we’ve managed to vaccinate a lot of Americans, if everything goes really well with the rollout and people can kind of go back to living some semblance of a normal life by mid spring, early summer, we might be in good shape. Right. Like if everything goes if everything goes swimmingly.

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S1: But we’re already seeing the incoming surgeon general sort of float these warning signs and say, you know, we might not have a lot of people vaccinated until the summer or the early fall.

S4: And that’s exactly so. Vivek Murthy went on MSNBC recently and said that while there’s a chance that we could have, you know, that all Americans could have access to the vaccine by early summer or that the more realistic timeline is probably late summer or early fall. Right. So if that’s the case, the question is, will enough people who face high health risks be vaccinated that even before then we can sort of get back to normal and we won’t be in full on crisis mode like we are right now? And if they aren’t, if just not enough people have been vaccinated by the end of March, are we just going to be back to where we started? Are we going to be looking at a situation where, you know, businesses are still shut down, cases are still a daily case, accounts are still completely out of control and people don’t have aid. I you know, I don’t think it’s going to be a worst case scenario. Like, I think that just I’m you know, it seems like we’re going to have a good number of people vaccinated no matter what, especially elderly people. But, you know, it’s there is a risk that we are just going to find ourselves in back in the midst of another crisis soon.

S1: I wonder, Jordan, when you think about, like, ways this deal could have been improved, if you look back at October and think the Democrats had something kind of in hand, you had Steve Manoogian going on TV saying, hey, we were willing to spend a ton of money here, one point six trillion, one point eight Schore, just because they wanted those stimulus checks to go out to people before the election in October.

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S4: You know, I argued that, you know, Nancy Pelosi should accept the deal that Donald Trump was offering going into the election. Right. Essentially, the White House had offered one point eight trillion dollars was a pretty good deal. And Pelosi could have said yes to that and then thrown it to Mitch McConnell. Essentially, it was not clear that the Republicans would have ever accepted that deal, but it would have just taken it to the next step of negotiations. And the reason the White House was offering so much money was because they really wanted to send out another round of checks before the election. Frankly, looking back now at the results, it’s entirely possible that sending out another twelve hundred dollars to every you know, how almost every household in America would have actually, you know, turned the race for him, given how tight it was in some of those swing states. So, you know, it’s hard to say whether or not it was good for America in the end that Pelosi decided not to take the deal.

S1: I wonder if you think, too, about the damage that’s been done in the time we’ve burned, figuring this bill out, like in the time we’ve spent talking about what we’re going to do to help people, there have been real changes that will be hard to unwind in the economy. A lot of women have left the workforce. We’re seeing these disproportionate impacts of economic change based on race. And so this bill doesn’t do a lot to address those fundamental shifts, does it?

S4: No. I mean, you can’t have the last six months back, right? You know, if. Somebody had to sacrifice their career because they had to take care of their kids who were being homeschooled or who are, you know, doing remote learning, then you can’t get them their old job back right now. Right. Like, if they chose to go, if a small business closed for good, you’re not going to reopen it. There is definitely some permanent scarring. It’s hard to say at this point what the extent of it is. We don’t know how much damage has been done. And that’s part of what’s a little bit worrisome. You know, we don’t know exactly what the costs of inaction have been, but that’s also another reason why it was important to get something passed now. Right. Like why playing chicken over this bill and just saying, see you in Georgia was not necessarily a great idea, because if things didn’t go exactly right and this turned out to be our last chance to pass something, then the the cost of failing to do so would have just been, you know, immense. It would have been completely tragic. And so, you know, thinking about how how long we’ve gone without aid and how many people have suffered as a result, that’s all the more reason why it’s good that Congress is acting now.

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S1: What are the chances you give the incoming Biden administration of being able to pass their own additional stimulus once he’s in office?

S4: It’s hard to say. Know again, if Democrats manage to win in Georgia, great. You know, then yeah, he’ll be able to pass something.

S1: I mean, the Times is pretty bleak. They were like, this could be the last help from Washington. The economy gets any time soon.

S4: It could be, yeah. If Republicans win those one seat or two seats, there might not be another bill. I mean, you know, again, I didn’t think Mitch McConnell was going to pass anything after the election. And and I’m pretty convinced that he might not be now were it not for the Georgia runoffs. I’m not sure what his incentive would be to play ball if there needs to be more aid come March, I think. I think there are some areas that he would probably, you know, repayed like I could. The Republicans are pretty happy to pass more paycheck protection program funding to support small businesses. Yeah, small and mid-sized businesses. And I’m pretty sure that they’d be happy to, you know, spend more on vaccine distribution, because that’s just something everyone kind of agrees on. But things like unemployment insurance and another round of checks and, you know, more rental assistance and any kind of aid for state and local governments. I mean, that’s you know, it’s hard to imagine you’re going to see more of that if if Mitch McConnell still the Senate majority leader. So it’s yeah, it’s possible that this is the last best shot to do something.

S1: Hmm. I keep wondering if I should be angrier about this bill, like when I read one article in the paper. The kicker to it, this is about the stimulus bill was so devastating to me. It was a quote from an economist saying, the best case scenario is we look back on this and say, well, an ounce of prevention would have been worth a pound of cure. And then the more likely scenario is that we spend the next 30 years documenting all the harm that was done, it was pretty devastating. It seemed like an indictment of what we haven’t done.

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S4: I mean, yes and no. I mean, I think, like on a fundamental level, the U.S. has just made some very obvious mistakes. I don’t know if I’m that pessimistic. I do agree. I don’t know which economists this was. But they’re right about the prevention versus cure thing. One thing that drove me absolutely insane for the last, you know, six months is that it was incredibly obvious that certain businesses needed to be shut down in order to control the virus. Right. Like bars, restaurants, gyms. And the way to do that was to shut the businesses down and to bail them out, just pay them to stay closed. You know, I was struck that we needed a national bar rescue and we could have also, you know, early on paid more people to stay home entirely for two months. We could have thrown even more financial support at businesses and at workers and maybe actually suppressed the virus. So there definitely missed opportunities. And that’s part of the reason we are having to throw another nine hundred billion dollars at the problem. Now, at the same time, I think we should appreciate just how much the U.S. has spent trying to support people in this time of crisis. I mean, our fiscal response has been pretty remarkable. We have really given people a lot of money. I know you see all those beams about like, you know, only one twelve hundred dollar check, which are just completely inaccurate. You know, when you count the direct cash payments to families and unemployment insurance that we’ve provided and the small business support that is really payroll support, we’ve we’ve done a lot. So the U.S. has gotten a lot wrong and there haven’t miss opportunities. And it is insane that it took this long to pass a new bill. But we should appreciate the ways in which it has gotten some things right. On the economic front, it could have been much worse.

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S7: Jordan Weisman, thank you so much for joining me. Thanks for having me on. Jordan Weissmann writes about business and economics for Slate. And that’s to show. A quick programming note before we go, what next is going to take a little holiday vacation, which is giving us a chance to revisit some of our favorite episodes from 20/20. So over the next week or so, we’re going to be putting those in the feet for you. We’ve even updated a couple of our stories that have changed. And don’t worry. We’ll be right back here with a brand new show on January 4th. What Next is produced by Daniel Hewitt, Davis, Landolina Schwartz and Mary Wilson. Frannie Kelley is helping make the magic happen to we are led by Allison Benedikt and Alicia Montgomery. And I’m Mary Harris. If you miss me when I’m gone, I’m probably still going to be tweeting. You can find me over at Mary’s Desk. Thanks for listening. Have a great holiday if you’re taking one. And even though it sounds weird to say I’ve got favorite shows from this crazy year, I do. And I’m going to be back here tomorrow with one of them, so I’ll catch you then.

S6: I feel like we’ve we’ve reached the end of our story, the it’s never over. This is the never ending story. OK, where is this or where you’re flying off on the back of, like a furry dragon? I wasn’t going to compare myself to Atreyu here because I’m just not the main character in this drama. But yeah, sure. Why not? Mitch McConnell. Is that so?

S4: I feel like that’s more like Chuck Schumer is like having waded through the swamp of despair. He’s now he’s now flying off.