The Democratic Hangover Edition
Hi Hackaroos!
Welcome to the Friday morning hangover edition of the newsletter. Here’s to finding some Gatorade and Advil for all of those Democrats in Washington waking up with headaches this morning as the wild week reaches a climax.
Yes, the government will remain open, but amazingly that’s the least of our concerns.
(cover image credit: Drew Angerer / Getty Images News)
Let’s start in the wild world of reconciliation…
Reconciliation Nation
Murphy:
Wait, was that a large, broken train part that flew past my window late last night? I heard something crash…. Not good for the POTUS when his own party cannot pass a landmark piece of bipartisan legislation – the first in years – to repair our broken roads and bridges and ports and airports and internet networks. This is a mess for the Democrats!
Gibbs:
I am not so sure about that Murphy. While it appears to still be Infrastructure Week (!!), and you’re right it’s never great to delay a vote, but I am far more optimistic something is close to getting done in a way I certainly wasn’t as the sun came up yesterday. If you read the news today, you’ll see descriptions like “setback” or “embarrassment in a delayed vote” or “black eye for Biden.” Remember this – it’s not the process, it’s the outcome. For one, we finally know where Joe Manchin is on this and that alone is a big development.
Murphy:
I agree there is a window to get back on track, but there is little time to waste. I’m talking get a bill done today or even Saturday. The dilemma for the D’s is that there appears to be no fast answer; the tangle in the Senate on the mega-spending bill is very knotty. That means GOP delight as Biden faces endless headlines and breathless cable news reports about Dems in Disarray, Biden’s Circular Firing Squad, etc. Now, I know out in real non-beltway America, “reconciliation” is something your Uncle Walt goes to after he throws his back out at the Mopar warehouse, but failing to get anything done is kryptonite for Biden’s Mr. Will Run DC Right Again positioning. And the media will pound and pound at it since that’s a well-worn playbook; the media find it culturally difficult to criticize Democrats on ideology or cultural stuff since the vast majority of reporters quietly think politics is a battle between cynical, but disorganized good guys (the Dems) and cynical highly organized bad guys (the Repubs) so the go-to move is to attack the Democrats for incompetence and in-fighting. Even though it’s a big oversimplification (re: both sides) there is a ferocious helping of that sort of thing coming Joe Biden’s way if Pelosi and Schumer cannot sort this out and pass infrastructure fast, followed by a domestic spending bill. Of course, Joe Manchin (my new hero) couldn’t resist throwing a truckload of kerosene on the whole problem yesterday by announcing he’s all in for $1.5T of new spending, or $2T less than the Progs want. That only made the fireball bigger (though as usual I think Manchin and Sinema are right to be standing in the way of such a huge and unnecessary federal spending orgy.)
photo credit: Drew Angerer / Getty Images News
Gibbs:
Over the past few days, what’s really stood out is real lack of trust among all of these players. It seems like at times the biggest thing that people are trying to gain is some leverage over what comes next. As I said above, we now have a reasonably good idea of what the contours of this all look like. Manchin has apparently been at $1.5 trillion for the reconciliation bill for a few months, having made that agreement with Senate Majority Leader Schumer. I could see some being added to that number, so I’d expect a $1.5 – 2.1 trillion plan being the agreement here. Now, to be clear, that may well be the easy part. Once that framework is agreed upon, then the selling of it has to begin. Progressives, who started at $6 trillion, came down to $3.5 trillion, are not going to be happy with the range I just wrote about above. But, one thing has been certain for months, even if we didn’t know Joe Manchin’s bottom line and that this was never going to be $3.5 trillion because at least 2 Democratic Senators said so. The other sticking point will be what Progressives need to feel like they can move forward on the bipartisan infrastructure legislation. If it’s a framework and a hand shake, this could happen over the weekend. If, as some in the House have suggested, the Senate will have to pass actual legislative language, then this could still take weeks. That would be bad because there’s actually some momentum here. Is this all messy? Absolutely. But, to me, yesterday yielded some genuine progress towards where this is likely to end up and now there can be a pathway to getting there. It's just going to take a little while longer.
One good development is that Congress kept the government open and funded and averted a shut down, which is obviously a very good thing, even if it happened just a few hours before the deadline. It may well, in some ways, be a lesson for all of us as we watch reconciliation. Congress basically came to the simplest view of how not to shut down the government and they still did it just hours before it was going to happen. So, Congress is the ultimate “the assignment is due tomorrow, let's start the assignment tonight” crowd in terms of final agreements. They're never going to get something done before they'd have to get something done. Patience is hard. So, too, is progress.
Murphy:
You are right Gibbsie, it's the nature of Congress. No dire deadline? No action. So, this has been just one game of chicken after the other. You have the D on D violence in the House over the infrastructure measure, the recent kerfuffle over the Dems trying to jam the GOP by combining the debt limit and the short term appropriation to keep the government open (that one’s over; the Dems blinked and the R’s won) and the really, big, scary game of chicken over extending the debt limit. While the Dems have the Senate votes to do it alone, it’s tricky… and dangerous. As I said in our last newsletter, the R’s should back off on this one. There is simply too much risk. (And I worry that the small-ball GOP win on the Dem attempt to jam them this week with their double debt limit AND extend funding bill will enable the R’s to keep pushing. Not good.)
Gibbs:
Of the many challenges that the Biden administration and Congress had to deal with going into this important week, the thing I feel worse about isn't reconciliation. It’s that I think there's a fairly good chance that we're heading towards default. However, you want to characterize what Democrats tried to do in forcing the debt limit with government funding, Mitch McConnell has said he's not even going to let a clean debt ceiling pass. Yup, Republicans in the Senate are going to require 60 votes to raise the debt limit. They say, stupidly, that this is something the majority must take responsibility for and pass themselves. Except, that’s not what McConnell is doing. Democrats are going to pass a clean debt limit increase and McConnell and crew will filibuster it. If you needed one more reason to do away with the filibuster, add this to the long list. And the financial markets are going to start getting wobbly because of the Kentucky Senator’s careless attitude. So, the debt limit is the thing I worry most about not getting done by the mid-October deadline.
Murphy:
In the end I think (as well as hope and pray) that cooler heads will prevail, and if they have to, the Dems will do it solo with reconciliation. But such a high wire act during Capitol Hill’s current tsunami will terrify the markets and that would be a political blunder for the Republicans. It’s just too risky and the business wing of the GOP will start going ape next week if the Republicans keep playing chicken. So, I’m predicting no default, but an unnecessarily scary ride.
The View From The Podium
photo credit: Alex Wong / Getty Images News
Murphy:
Now, Gibbs, bringing you back behind the White House press podium, after the mess of last night, what the hell does Biden do today?
Gibbs:
To your earlier point, not that middle America is paying a ton of attention around this, but I do think this is one of those things where being a crafty legislator/ dealmaker able to bring people together is what Biden ran on in 2020. And these are the tests right now. Last night, with White House officials joining in on the negotiations taking place on Capitol Hill, Joe Biden’s White House is right where it needs to be now. And, that’s good. It’s always a tricky act when this part happens. But now, with his entire agenda on the line, he and his team are sitting at the same table working on the details on a deal. And while Nancy Pelosi worked a masterful process yesterday to keep the Democratic factions talking and moving forward, the person who is going to have to press Members and Senators to support a final deal will be President Biden. He’s going to have to go to Capitol Hill and tell them he needs a win, they need a win and the country needs a win.
Murphy:
At least there is now what these negotiations have needed all along; a number! As mentioned above, West Virginia Senator Joe “Firebomb” Manchin has thrown out $1.5T as his number, which is a huge haircut on the Bernie/Squad’s $3.5T number (which progs are quick to claim was selflessly reduced from an original (insane) target of $6T!). Manchin’s partner, Arizona Senator “Silent” Kyrsten Sinema has indicated that she too has a number which, naturally, she won’t name publicly. So let the grinding begin. I don’t know about you, but I smell $2T coming fast.
🇩🇪 Auf Wiedersehen Angela 🇩🇪
Murphy:
OK, let’s quickly sort out the German election results. Good news: Poland can relax… nobody’s marching! Tip your server! The fact is I like the Germans and follow German politics. In fact, I was in Frankfurt in July – doing some of the street level reporting we are famous for here at Hacks on Tap – and a lot of savvy Germans told me at the time that the SPD (the center left Social Democrat Party) was dead. Whoops, biggest miss since the whole “on to Moscow” thing. Turns out the Merkel’s mighty CDU had a slow pony for a candidate and the German electorate – normally very staid and risk adverse – was ready to try a change. The SDU had a late surge and finished a narrow first with nearly 26% of the vote. But the vote was split so now it’s all about coalition building. A second place finish with 25% of the vote was devastating for Merkel’s CDU/CSU bloc which has been the Big Hans of German politics since WW2. While the CDU could find themselves in a coalition government, I think it is unlikely. My bet is they’ll go to the sidelines and have an internal civil war about where they go from here. A lot of the CDU’s internal tensions were frozen during Merkel’s 16 years of strong leadership; that dam will break now.
The coalition kingmakers are the two secondary parties – the third place Greens and the fourth place Free Democrats – both of whom did well in the low to mid-teens. The Free Dems are a right of center, free market party (the CDU’s drift toward empty centrism was a gift to them) and the Greens have much evolved from their protest roots – think 99Luftballoons…
…to a more moderate, less business hostile party that governs several large cities and attracts a lot of well-heeled yuppie voters worried about climate change. It’s foggy, but my best guess would be a “traffic light” coalition government of the SDU (party color is red) the Free Democrats (yellow) and the Greens. (Thought getting Free Dems together will be tricky to say the least.) Stay tuned Komeraden!
Gibbs:
Merkel has had an interesting role in American politics over the past 16 years. There’s no doubt that Brexit has removed Great Britain from playing a decisive role in Europe and France hasn’t done so either. So, she's been the backbone of Europe for a long time even if some of it was thorniness in our side. When the world was doing economic stimulus in 2009 and 2010 to get the global economy, she was critical of countries, including the US. But now, there's no doubt her retirement will leave a big piece missing on the world stage. And that's not going to be easily replaced. It's certainly not just moving one person out and moving one person in because she was tough and smart and brought a lot of what was needed to forge ahead.
Murphy:
Merkel was impressive. I was in Berlin during her early rise, hanging out with some CDU operatives in, yes, a biergarten. One of the crafty old pros had a twinkle in his eye and told me in a perfect Central Casting Herr General accent, “Zis is what you Amerikans call a Two-fer! A Voman, und from zee East”… referring to the CDU’s historical weakness with voters from the former East Germany, as well as the ability to make history with the first Female German Chancellor. Old Fritz was right.
On that note, Auf Wiedersehen!
Have a great weekend and we’ll see you on Tuesday!
Murphy and Gibbs