Update 571 — Thanksgiving Props:
People, Policies to Be Grateful For
This past year has brought a tableful of major policy successes, served with significant delays and some disappointments. For progressives, the return of full Democratic government control in January offered a promising menu for 2021, as the country sought to move past the Trump presidency. The prospect of major reforms to our economy and democracy were all on the table (by the pie).
Many of the big-ticket policy entrees we had hoped to achieve remained to be accomplished. But compared to the previous four years in Washington, 2021 has given us much for which to be grateful. In this update, we wanted to recognize the people and policies we are thankful for and to encourage them to the rapid completion of BBB — when we can enjoy our just desserts.
Happy Thanksgivings all,
People We Are Thankful For…
Rep. Nancy Pelosi: A Commanding Speaker
Through her tireless leadership at the helm of the narrow and divided House Democratic majority with an ideologically diverse caucus, Speaker Nancy Pelosi has cemented her legacy as one of the most effective Speakers in history. Her legislative skill has helped secure House passage for critical pieces of President Obama and President Biden’s agendas and countless other pieces of legislation throughout her record two stints as Speaker.
Pelosi’s rare ability to keep the caucus together at record levels will surely be missed when she passes on the torch, but her mark on the chamber will never be forgotten. As attention turns toward Biden’s voting rights agenda, Pelosi will surely deliver the votes needed on the Senate’s Freedom to Vote Act to protect and expand voting rights. Future Speakers will certainly look to her as a model.
Sen. Amy Klobuchar: Political Reform Champion
Senator Amy Klobuchar has been a critical leader in the Senate on voting rights this Congress. As the sponsor of the Freedom to Vote Act, she worked out a compromise with Senator Manchin that kept many of the important provisions of the For the People Act and got all Senate Democrats on board with the bill. If we secure reforms to the filibuster, we will see the Senator’s bill signed into law.
As chair of the Senate Rules Committee and a leading member of the Judiciary Committee, Senator Klobuchar has led hearings highlighting the need for democracy reform through FTVA and the John Lewis Voting Rights Advancement Act. Creating a congressional record of the harmful voting rights and election administration laws spreading around the country has pushed Congress to act to protect our democracy. Sen. Klobuchar has also written seminal antitrust legislation in an area ripe for reform.
SEC Chair Gary Gensler: Wall Street Cop’s New Beat
Gary Gensler is the right person at the right time to chair the Securities and Exchange Commission. Gensler has a strong record as a public servant, including a highly successful five-year run as chair of the Commodity Futures Trading Commission, in which he efficiently brought the derivatives and swaps markets under control.
Since taking over the SEC in April, Gensler has gotten off to a fast start, setting his staff on a total of 49 different projects on policies including SPACs, gamification, private equity, climate disclosure, and cryptocurrencies. Gensler has laid the groundwork for major policy reforms and tougher enforcement in 2022. Gensler, an expert on cryptocurrencies, will likely play a major role in regulating the rapidly growing digital asset markets. Gensler, savvy and unafraid to make enemies, has brought a renewed sense of urgency, reform, and professionalism to the SEC. It’s clear that Wall Street’s top cop is back with a bigger beat.
Policies We Are Thankful For…
The American Rescue Plan: Its Front-Loaded Structure
When President Biden first took office, it looked like the economy was in for a long-drawn-out economic recovery. However, quick action by Congress to pass the American Rescue Plan has forestalled the economic stagnation many feared. While we are no means out of the woods, the ARP saved or created 3.7 million jobs and increased projected GDP growth by $600 billion. The ARP has put us on track for a ‘V-shaped’ recovery that seemed out of reach last year.
Much of this is due to intelligent if unheralded design which, with a few exceptions, provides benefits value in themselves but also stimulative of the economy without recourse to revenue that might impede recovery. Front-loading the spending and in particular enacting the $1.9 trillion American Rescue Plan without revenues is a major reason jobless claims reported today came in at their lowest level this week since 1969.
It also led to a historic reduction in child poverty not seen since LBJ’s Great Society. At the end of last year, nearly 20 percent of American children were living in poverty. Immediately after the passage of the ARP, child poverty dropped to a record low of 7.7 percent. Even as the effects of the ARP have worn off or expired, childhood poverty was slashed by an astounding one-third more than six months after the passage of the ARP.
The policy workhorse for this success has been the enhanced Child Tax Credit, which under the ARP has nearly doubled in size, became fully refundable, and is already being paid out in monthly installments. The CTC expansion alone has lifted an estimated 3.5 million children out of poverty.
Infrastructure Investment and Jobs Act: Up to Code
President Biden accomplished something many presidents have run on and failed at: passing historic investments in our nation’s crumbling infrastructure. The $550 billion in new infrastructure spending in the Infrastructure Investment and Jobs Act represents the largest ever investment in our country’s physical infrastructure. The bipartisan legislation helped build the case for Biden that democracy can and still does work.
While not every part of the bill was ideal, the funding for broadband, public transit, climate remediation and resilience, and roadway repairs among many other critical investments will help create robust economic growth. Over the next decade, the bill will help create an estimated 660,000 jobs. When eventually coupled with the Build Back Better Act, the IIJA will work in tandem with the broader investments to create an economy that leaves nobody behind.
What We Are Hopeful For Ahead
Build Back Better and Tax Equity: Try-Fecta
While the Build Back Better Act has been rightly lauded as a once-in-a-generation investment in working families, its tax equity provisions are also something to crow about — in particular, the new 15 percent corporate alternative minimum tax. Under current law, there are large discrepancies between the earnings that corporations report to shareholders (book income) and the taxable income they report to the IRS. This discrepancy allowed 55 of the largest companies to pay $0 in federal corporate taxes last year. The AMT provision would apply to corporations with an adjusted financial statement in excess of $1 billion, only around 450 companies, preventing them from using many (though not all) of the federal deductions and credits starting in 2023. This policy alone will improve the underlying equity of the tax system and generate $319 billion in new revenue over the next decade.
Democracy and Filibuster Reform: Do Unto Others Before They Do Unto You
Reforming the filibuster is long overdue. While the House has passed many bills this Congress, the Senate is unable to even start debate on these bills due to the filibuster. Whatever the reform may be, getting the Senate back to a functioning legislative body that can pass bills will be a paramount step forward. Through rules reform, the Democratic majority will be able to pass the Freedom to Vote Act and the John Lewis Voting Rights Act. These comprehensive bills will restore the Voting Rights Act, prevent partisan gerrymandering, strengthen campaign finance laws, expand access to the ballot box, and much more. Speedy passage of these bills will ensure just representation and election administration ahead of the 2022 midterm elections.
It can be easy for progressives to be disappointed when Democratic control of government fails to produce the full range of policy reforms needed to address today’s economic problems. Institutional constraints such as the filibuster rule and opaque parliamentary opinions, as well as political constraints such as the whims of a handful of Senators, have proved frustrating roadblocks this year. But we recognize the good people and policies when they produce — even if there is more to be done. We view those policies we were unable to achieve this year not as failures, but as opportunities for the near future that define the agenda.