Shutdown Narrowly Averted

Update 561 — Shutdown Narrowly Averted;
Negotiations on BIF and BBB Intensify

Yesterday, Congress managed to avoid a government shutdown by passing a stopgap continuing resolution to keep the federal government open through December 3. Speaker Pelosi also put off a vote last night on BIF, the bipartisan $1.2 infrastructure bill, when the needed 218 votes could not be found. Democrats in the House, Senate, and the White House failed to reach a deal to pass the legislation but met again today to resume negotiations.

Should either bill fail, the fallout could be devastating for the Democratic Party, with policy losses carrying political consequences. For vulnerable or moderate Democrats, shrinking the size of the bill, delaying, and certainly voting no would be against political interest. In this update, we lay out the main political motivations and consequences to consider in the negotiations ahead.

Good weekends all,

Dana

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Political Benefits of Build Back Better

The Build Back Better Act is not a hard sell to voters. The bill — and all of the polled provisions of it — remain overwhelmingly popular even after millions of dollars in attack ads sponsored by corporate interests. In a recent poll of likely voters, 62 percent supported BBB, while only 30 percent opposed it. For comparison, the 2010 Affordable Care Act was lingering in the mid-40s when it was being debated in Congress, while the 2017 Tax Cuts and Jobs Act was down in the 30s.

Support for the reconciliation package becomes more popular on a policy-by-policy level. Investments in long-term care, preschool, childcare, and Medicare rack up huge margins in the polls, both nationally and in competitive swing states.

Arizona Likely Voters West Virginia Likely Voters

Source: Data For Progress

Not only are Democrats receiving support from voters on the spending side of the package, but they are also getting high marks for their tax agenda. Most of the major proposed tax increases on the wealthy and corporations poll very well. After decades of disastrous supply-side economic theory, voters are eager for Democrats to bring justice and equity back to our tax code.

Solid Majorities Support Democrats; Payfors

Source: Data For Progress

Democrats should use this moment to deliver on key priorities and prove they are the party of functional government. Legislative failure and gridlock reinforce Republicans’ central message of “government can’t work” to undermine Democrats. However, implementing President Biden’s popular policy agenda would flip the script and potentially set off a virtuous electoral cycle where voters maintain Democratic majorities after receiving the material benefits of Democratic policies.

Taxes: Republicans and many moderate Democrats have raised concerns about the tax increases included in the bill. But according to the Joint Committee on Taxation, the tax package, which includes expansions to the EITC and CTC that benefit low to middle-income families, would actually be a tax cut for the bottom 80 percent of households. Only individuals making over $400,000 a year and large corporations will face tax increases.
Cost: While $3.5 trillion sounds like a big number, in reality, it is less than a six percent increase in total federal spending over the next 10 years. Additionally, the vast majority of new spending is offset through popular tax raises on the ultra-wealth and mega-corporations.

Consequences of Failure

With a midterm election rapidly approaching, the current reconciliation bill may be Democrats’ last chance for a major legislative achievement this cycle. A president’s party typically loses seats during the midterms, and Democrats already have slim margins. If Democrats are not able to secure a major achievement, they will likely lose the House and possibly the Senate despite a somewhat favorable map this cycle. Democrats, given our policy platform, have to demonstrate an ability to govern; if voters believe that Washington is incapable of delivering popular policies, then they will punish the party in power at the polls. Failure to deliver could depress turnout from Democratic base voters.

Historical precedent exists for this phenomenon. In the first two years of the Clinton administration, Democrats were mired by infighting and failed to produce a significant legislative accomplishment. The result was the disastrous 1994 Republican Revolution, which cost Democrats their long-standing Congressional majorities. Perhaps the only way to avoid a repeat of history is for Democrats to pass legislation as bold as the Build Back Better Act, which would touch most aspects of the economy and give Democrats of all stripes something positive to campaign on in 2022.

Failure to pass a reconciliation bill could also have internal implications for the Democratic Party. Compared to Republicans, Democrats have a much larger cohort of moderate and centrist members of Congress. This reflects the fact that the Democratic electorate is not as left-leaning as the Republican electorate is right-leaning. But the patience of Democratic primary voters may wear thin with members who sabotage much-needed and popular policies. Progressive voters in swing states and districts will be less willing to support moderate incumbents if these incumbents can’t even meet them halfway. Further, with Republican state legislatures seeming to focus on packing Democrats into safer seats instead of cracking blue districts, primary challenges from the left will be more likely.

These factors make the position of moderates who are negotiating down the size of BBB or even threatening to vote against it difficult to understand. It is in these members’ best interest for Democrats to have a major achievement to campaign on next year, and they need strong turnout from base voters in their districts and states to win reelection. In wave elections, it is mostly moderate members from swing districts who get taken down. That could very well be the case next year in the absence of a reconciliation bill.

Time is Running Out

Despite the clear political upsides of passing BBB and the immense risks of failure, a deal on a final reconciliation package has not yet been reached. Though the BBB package has made it through the House mark-up process fairly intact, it now sits in the Rules committee awaiting a final agreement between leadership, progressives, and moderates.

The current legislative standoff entails a web of redlines and mistrust. About a dozen moderate Democrats in the House refuse to vote on BBB without assurances that they are not voting for a larger package than can pass the Senate. Senators Manchin and Sinema have indicated that they do not want to begin formally negotiating on the nuts and bolts of BBB until the House passes the bipartisan infrastructure bill (BIF). Progressives in the House are convinced that if they vote for BIF before getting an agreement on BBB they will squander any leverage they have for a good deal.

An artificial standoff created by a refusal to negotiate publicly may score short-term points but runs long-term political risks. Each day spent sniping rather than delivering on the President’s policy proposals is another day that corporate lobbyists and other opponents have to attack the package, another day voters become more disillusioned with the entire legislative process. And further substantial delay could only increase the chances of eventual failure.

The Rising Tide That Lifts Democrats’ Votes

Often overlooked in the discussion is a point we have made numerous times but bears repeating: these packages, structured as they are and as sizable as they are, will provide the national economy with a bigger shot of fuel than almost anything Congress has ever done for it. The timing is pro-cyclical, meaning the injections of public investment will combine with the natural forces of recovery from the COVID economy that growth will be palpable among all segments of the population during 2022.

While every Democrat would be punished for failure, the moderate members are likely to bear the brunt, either by antagonizing base voters enough into dumping them during the primaries or getting swept up in a national Republican midterm due to demoralized general election turnout. Passing the Build Back Better Act is a critical move Democrats must make in order to keep their offices and gavels in 2023.

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