Can Recovery Act to Sustain Gains Pass?

Update 519–916,000 Jobs Added in March;
Can Recovery Act to Sustain Gains Pass?

The US added 916,000 jobs in March, double the number in February — a robust start to what we hope will be a durable recovery. The nation is still 8.4 million jobs short of pre-pandemic levels. In 1937 most famously, in the midst of the Depression, but also in the 2010s, we slowed the stimulus spigot, reversed fiscal course too soon, choking off or retarding the recovery. President Biden intends to do it differently. 

On Wednesday in Pittsburgh, Biden rolled out his $2.3 trillion American Jobs Plan. This package is necessary to keep the recovery going instead of repeating the saga of false starts that marred 2020. Below we look at the purpose and provisions of the Jobs Plan Act and trace its path to passage in Congress. 

As we write, the U.S. Capitol is under lockdown after a car rammed into two officers, leaving the suspect and one officer dead — devastating and developing news. 

Still, Happy Easter weekend to all, 

Dana

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This week, President Biden announced a sweeping infrastructure package, financed in part, through tax hikes on corporations. This package is the first of two. The second expected out in two weeks, will address “human infrastructure” needs. While Congress may consider these two proposals on parallel tracks, the White House and Congress may seek behind the scenes to wrap both into one final bill.

Senate Minority Leader McConnell already declared that the proposal “is not going to get support from our side,” and vowed to obstruct the proposal at “every step.” To pass this package and Biden’s other top priorities, Democrats have only two options: use budget reconciliation again or reform the filibuster. 

Reconciliation Round 2

Last month Democrats passed the American Rescue Plan using budget reconciliation. The legislation is expected to boost GDP growth to 6.5 percent and lift 16.4 million people out of poverty. Despite the ARP’s overwhelming popularity, not a single Republican member of Congress voted for the bill. As Congress gears up for an even bigger legislative fight over infrastructure, Democrats are preparing for similar levels of mindless opposition. To avoid the filibuster and pass the American Jobs Plan with a simple majority, reconciliation will need to be used once again. 

Before beginning the reconciliation process, Democrats must decide whether to draft a new budget resolution for fiscal year 2022’s budget or amend the 2021 budget resolution Congress passed in February. While Congress traditionally does not “double-dip” on budget resolutions, according to Section 304 of the Congressional Budget Act, there is nothing stopping them from “revising or reaffirming the concurrent resolution on the budget for such fiscal year most recently agreed to.” 

Majority Leader Schumer is seriously considering a double-dip approach, which would effectively allow the majority to use reconciliation numerous times each year. A decision from the Parliamentarian about whether it is allowable could come as soon as today, we are told. 

Regardless of which fiscal year’s budget resolution Democrats plan to use, once reconciliation is initiated it kicks off a multi-step process:

  1. The House and Senate must agree to “reconciliation directives” specifying the spending and revenue caps for each relevant committee;
  2. Each committee of jurisdiction decides what particular legislation to add in their markup;
  3. The Budget Committees of each chamber compile the committee markups into an omnibus bill and reports them to the floor; and
  4. The House and Senate each vote on their omnibus bill and then resolve the differences between the chambers, either through a conference committee or manager amendments. 

For a reconciliation bill to pass the Senate, it must conform to the “Byrd Rule” which allows any Senator to object to extraneous provisions. A provision is considered ineligible for reconciliation if it meets any of the following criteria:

  • It does not change expenditures or revenues or the conditions by which they are made or collected.
  • The changes to expenditures or revenues are merely incidental to the relevant provision. 
  • It is outside the jurisdiction of the committee that submitted the provision. 
  • The change in expenditures or revenues does not comply with the relevant committee’s reconciliation instructions. 
  • It increases the deficit outside the budget window.
  • It changes Social Security.

The most recent example of a provision being ruled ineligible for reconciliation was the $15/hr minimum wage increase in February, after the Senate parliamentarian stated that she found its budgetary changes to be merely incidental. However, the Parliamentarian only advises the Senate Chair (presumably Vice President Harris) on which provisions conform to the Byrd Rule; it is within the Chair’s power to ignore her advice. Any Senator may try to overturn the Chair’s ruling, but it takes 60 votes to do so. 

While ignoring the Parliamentarian would break with precedent, Republicans have fired Parliamentarians during reconciliation processes in 1995 and again in 2001. Though most of the provisions in the American Jobs Act will be Byrd Rule compliant, it is up to the 50 Senate Democrats to decide how far they push the procedural envelope, not an unelected Senate staffer. 

Filibuster Fixes 

Though Democrats are likely able to pass the Build Back Better agenda through reconciliation, many other legislative priorities remain hamstrung by the filibuster. Proponents of the filibuster contend that it protects minority party rights and fosters compromise, but for most of its existence, the filibuster was used by segregationist senators to block legislation that would have extended civil and voting rights to black Americans. 

While a majority of Democratic voters and many Senators are ready to scrap the filibuster altogether, moderate elements in the party have proposed more targeted and incremental reforms. Critical is the distinction between practical and more theatrical reforms. 

Reforms that would materially improve odds of passage for bills and restore full functionality to the Senate focus on:

  • Lowering the Threshold: In 1975, the Senate reduced the votes required for cloture from two-thirds (67) to three-fifths (60). Peeling off a few Republican Senators would be a more viable strategy if the magic number is just above 50.
  • Limiting Hours of Debate: The Senate could adopt new rules limiting the hours of debate to a fixed number, instituting a mechanism in which the majority controls the length of debate and enabling the passage of bills that would otherwise never see a vote.

Less effective would be reforms establishing a:

  • Talking Filibuster: Requiring senators to actually hold the floor and talk throughout a filibuster, imposes a cost of time and energy, not to mention broadcasting the optics of obstructing popular policy. But a minority that passionately opposes a bill could be willing to hold the floor no matter the cost and paralyze the Senate.
  • Present-and-voting Standard: Requiring a three-fifths vote for cloture only of those senators present in the chamber would impose a much higher cost on the minority without making filibustering impossible.

As state legislatures enact voter suppression laws across the country, pressure is mounting on Congress to create a democracy carve-out to the filibuster. Recent polls showing robust bipartisan support for this effort.

Reforming for Results

While Democrats might muscle their infrastructure agenda through reconciliation, the larger question about the efficacy of Senate processes remains. For many senior Democrats, including President Biden, their formative political experience came at a time when bipartisan compromise defined the Senate, but those days are dead and gone. 

Under this paradigm, Democrats have a stark choice. They can either cling to outdated procedures agreed to for the sake of passing watered down legislation. Or they can demonstrate the courage of their convictions by passing once in a generation economic and political reforms, and live with the consequences of majority rule. Voters historically reward results over procedure. If Congress is unable to deliver on Biden’s campaign promises, Democrats will be punished at the ballot box in 2022. 

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