GA Delivers Senate to Ds

Update 497 – GA Delivers Senate to Ds:
The Meaning of the Majority in the 117th

After the dust settles on the inchoate, dog-catches-bus occupation of the U.S. Capitol by a ragtag set of disparate malcontents turned vandals on Wednesday, a propitious moment in American political history the day before may ultimately carry far greater political significance. 

When Georgia voters elected two Democrats to the U.S. Senate on Tuesday, in a surprise outcome, two incumbent GOP Senators lost and so was the Republican majority in the Senate. Below, we examine this sudden game-changer’s implications for economic policy and political reforms in the 117th Congress sworn in Jan. 3. 

Good weekends, all. 12 days and counting…

Dana

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Over four million Georgians voted in Tuesday’s Senate runoff elections. With the Senate split 50-48 for Republicans and incoming Democratic Vice President Kamala Harris as President of the Senate, the runoff elections would determine control of the Senate for the next two years.

The two Democratic candidates, Reverend Raphael Warnock and journalist Jon Ossoff, were officially declared the victors over incumbent Sens. Loeffler and Perdue, respectively. Ossoff will be the youngest sitting Senator since President-elect Joe Biden and the first Jewish Senator from Georgia, and Warnock will be the first black Senator from Georgia and the first black Democratic Senator for any state in the Deep South.

Tuesday’s surprise double win for Democrats is a major opportunity for progressive policy. Current Senate Majority Leader Mitch McConnell had promised to be the “grim reaper” for Democratic legislation, but he will no longer control the Senate docket. Soon-to-be Majority Leader Chuck Schumer has instructed Americans to “buckle up” for the incoming wave of relief.

The caveat: even with a bare 50-50 majority, with that tie broken by Vice President Harris, Senate Democrats will confirm President Biden’s nominees, control the agenda and what hearings are held, and can pass tax increases and more COVID relief as part of any reconciliation bill as long as they can muster 50 votes. Legislation outside of reconciliation will remain subject to filibusters, requiring 60 votes to pass.

COVID Relief

Thanks to Georgia, another stimulus package will be in the works soon. The next stimulus package will likely include the following measures: 

• $2,000 Checks: While campaigning for Warnock and Ossoff, President-elect Biden vowed to get $2,000 stimulus checks out to Americans if Democrats won back the Senate. Checks can be passed through reconciliation, but Schumer will likely put $2,000 checks on the Senate floor for a vote, unlike McConnell. The vote may succeed given immense bipartisan support — Warnock and Ossoff’s opponents both supported the stimulus measure during the campaign. 

• Aid to States and Local Governments: The $160 billion state and local aid provision offered by the House was a major sticking point for Republicans in the previous relief package. To move the package forward, both sides agreed to separate state and local aid and corporate liability immunity into their own smaller bill, which failed to pass. A future relief package will almost certainly include state and local aid. This time, the GOP won’t have as many bargaining chips. 

• Extended and Expanded Unemployment Benefits: The recently passed $900 billion COVID-19 relief package includes $300 billion in enhanced unemployment insurance for 11 weeks. In the next package, Democrats will seek to increase federal unemployment benefits back to $600, the original amount prescribed by the CARES Act.

Fiscal Policy

Even with a slim Senate majority, Democrats can do much to enact progressive fiscal policy, including:

• Infrastructure: With support from President-elect Biden and the entire Democratic caucus, Congress will be able to pass major spending for clean, equitable infrastructure, including roads, public parks, waterways, electric grids, and universal broadband.

• Taxes: While moderate Democrats will need to get on board, Congress will be able to pass all of Biden’s tax agenda and beyond, including increasing corporate income taxes, subjecting higher incomes to FICA taxation, raising the capital gains tax rate to match those on regular income, changing the corporate tax rules to discourage offshoring, and expanding the Earned Income and Child Tax Credits. Because of the recession, however, Democrats may delay the tax increases from going into effect until after the recovery begins. 

• Funding for IRS, Executive Agencies: Ensuring that executive agencies are properly funded will be a top priority for Democrats. Since 2010, the Internal Revenue Service has declined its audits by 30 percent due to increasing cuts to the agency. Per a May 2020 report, due to insufficient resources, the IRS was unable to audit almost 900,000 wealthy individuals who collectively owed $46 billion in taxes. Other agencies like the Environmental Protection Agency, the Department of Transportation, and the State Department have also suffered from underfunding for years. 

• Student Debt Relief: Last year, Americans owed a collective $1.5 trillion in student debt, and about one-eighth of Americans have some student debt. Student debt burdens have forced younger Americans to delay homeownership and establishing families. Congress could eliminate student debt for the 75 percent of American’s whose debt is federally-backed, providing immediate financial relief. 

Democracy Reform

This past year has shown the difficulties for many in accessing our democratic system and the need to ensure that our democracy fully represents the will of the people. 

• Political Reform: Earlier this week, the House reintroduced H.R. 1, the For the People Act. Along with the John Lewis Voting Rights Advancement Act, H.R. 1 would expand access to voting, get big money out of politics, strengthen congressional ethics standards, and prohibit racially discriminatory voter suppression.

Questions remain surrounding when the House will vote on H.R. 1. Should the House once again pass the bill, a Democratic Senate presents an opportunity for passage and enactment. With Sen. Udall now retired, Sens. Klobuchar and Markey will be leading the bill in the Senate. 

With such a slim majority, Democrats may be unable to enact such democratic reforms. Under current Senate rules, ending debate on a bill (cloture) requires the approval of 60 Senators; this rule creates the filibuster, a tool the minority can use to block any bill without strong bipartisan support. 

But bills can bypass the filibuster through budget reconciliation, which requires only 51 votes to end debate on bills concerning spending, revenue, and/or the debt ceiling. While the Byrd rule prevents Senators from adding any non-related provision to a budget reconciliation bill, moderate Democratic Senators supportive of democracy reform may be persuaded to change the Byrd rule. 

Workers and Wages

Democratic control of Congress could mean the passage of much-needed legislation to improve conditions for American workers, strengthen unions, and increase the minimum wage. Without changes to reconciliation, however, these policies will also likely be subject to filibuster. 

• Minimum Wage: Democrats have long supported raising the federal minimum wage, which has remained at $7.25 an hour since 2009. Biden has pledged his support for raising the minimum wage to $15, and the pandemic’s disproportionate impact on low-income communities has underscored the need for greater economic fairness. With Democrats now in control of Congress, a minimum wage increase is much more likely.

• The PRO Act: The Protecting the Right to Organize Act, which passed the House last year, would have changed federal labor laws to increase the power of workers and labor unions. The bill would give workers more leverage during workplace disputes, weaken state right-to-work laws, and give the National Labor Relations Board the ability to fine companies up to $50,000 for violating labor laws. The bill passed the House along mostly party lines in February 2020 but was not taken up by the Senate. This bill, or a similar version, would have a stronger chance of passage this session.

Risky Nominations Secured

President-elect Biden has tapped several experienced Democratic politicians, academics, and advocates to fill his cabinet. As we covered last month, Biden’s most controversial nominee, Neera Tanden, selected to lead the Office of Management and Budget, would have faced an uphill confirmation battle with a Republican Senate. Now, the soon-to-be Democratic Senate will be able to quickly confirm her and Biden’s other nominees without serious threat. 

United Front

With Democrats controlling a unified government for the first time in more than a decade, the window of policy possibilities has dramatically widened. Even with slim majorities, Democrats are in full control over the next two years’ legislative agenda and budget. McConnell can no longer hold cabinet or judicial nominations hostage, and popular House bills will now see the light of day in the Senate. 

Still, conservative Democrats will likely give Biden’s legislative ambitions more than a few headaches, and holding a caucus together that includes both Bernie Sanders and Joe Manchin is tenuous even in the best of times. But Democrats can take heart that the Georgia runoffs have dealt a major blow to the mindless obstruction of Republican Senators.