Without checking, I suspect that these pages have been as quiet during the last eight weeks as they have at any time since they were launched in 2017. Frankly, with President Joe Biden’s assumption of the presidency allaying my fears of our devolution into an autocratic state and my inclination to let the Biden team settle in before making any pronouncements, it has been a pleasure to think about something else [although wrestling with income taxes, one of the last weeks’ preoccupations, can only be considered a “pleasure” in this context ;)]. I suspect that my reticence will continue for much of the remainder of the President’s first 100 days. This note is in no way a comprehensive assessment of the steps Mr. Biden has taken in his first weeks, but simply a few reactions:
The President and his team came in with a clearly-expressed, single-minded focus on manufacturing and dispensing COVID vaccines to Americans. They have effectively set low expectations, and have over-delivered. I would venture that if we have flare-ups of the Coronavirus in the future, no thinking American will consider such caused by any Administration oversight. Thus far, an excellent job.
The President’s “luxury” of single-minded focus on COVID has now ended. The migrant challenge at the border — which I do not think it is unfair to say has been exacerbated by what I believe is the true perception of Mr. Biden’s empathy for the downtrodden — and our two recent mass shootings are reminders that no President is ever truly in control of his/her agenda. Mr. Biden must address these and other erupting issues without losing focus on his priorities – no small task.
There has been some media comment that Mr. Biden views himself as a “transformational” president, in the mode of Franklin Roosevelt or Lyndon Johnson. I hope not. During their presidencies, Presidents Roosevelt and Johnson enjoyed overwhelming Democratic majorities in both houses of Congress. As a veteran of the Senate, I assume that Mr. Biden realizes that his opportunities are more limited in a Congress almost evenly divided between the parties. I would venture that his greatest chance of success is not, as we have so frequently heard expressed, in “going big,” but rather, in “going small”: e.g., pushing a limited bill setting a path to citizenship for DACA recipients rather than comprehensive immigration reform; supporting a bill addressing only an expansion of background checks for gun sales rather than aggressive overall gun regulation. If he “goes big,” he has a significant chance of achieving nothing.
I understand that there is bipartisan support for an infrastructure bill, which is reported to be the Administration’s next major priority (although predictably, the parties are apparently not aligned on infrastructure priorities). I am concerned about accounts that in addition to targeted tax hikes, the Administration intends to fund a significant part of its infrastructure proposal – indicated to be in the $3T range – through further deficit spending. I fear that yet more massive deficit spending on top of the recent 1.9T COVID relief package will ultimately have significant consequences. To me, the greatest peril is not the potential impact upon inflation (although bond traders – smart people – clearly generally harbor some doubt about U.S. Treasury Department and Federal Reserve Bank claims that any unhealthy inflation arising from these massive spending measures can be readily controlled), but from the seeming current perception that we can limitlessly borrow. I’m aware that there is an economic school that preaches that deficits don’t matter; I believe that at some point, they will matter. Our standing as the world’s foremost super power – a standing we do indeed still enjoy – arises from equally important dual pillars: we have the most weapons and the best financial condition. Our military is our defense, but our economic strength is our offense. Chinese President Xi Jinping clearly appreciates this, given the manner in which his regime is attempting to reinforce the underpinnings of China’s economy and extend China’s influence in the world’s economy. The world lends to us and will continue to lend to us at low rates – despite our profligate spending – as long as we remain the best credit risk in town. We endanger our standing if we continue to borrow like a rich kid with his parents’ credit card. To do so does not threaten us now, but — as the fictional Consigliere Tom Hagen advised Don Vito Corleone in a different context in The Godfather – perhaps ten years from now. There is nothing inevitable or immutable about American primacy. When my mother-in-law, still with us, was born, Great Britain was the world’s preeminent power. If we had any really old Romans still with us, I’m confident that they’d observe that world preeminence cannot be taken for granted. We can’t continue to fritter away our financial strength through irrationally inadequate tax revenue generation and indiscriminate wish list spending.
Finally, although I concede that the early signals regarding the possibility for constructive bipartisanship aren’t encouraging – few Republicans voted to impeach/remove former President Donald Trump, despite his clear culpability for the Capitol insurrection, on the pretext that their brainwashed constituents didn’t support impeachment, but nonetheless voted against Mr. Biden’s COVID package although the majority of their supporters did favor the bill – if advising Mr. Biden I would encourage him to keep on trying – and try harder. Although I may change my mind, I do not yet favor complete abandonment of the Senate’s Filibuster Rule. (If I change my mind, what will tip me over is Senate Republicans’ blocking of the voting rights act recently passed in the House of Representatives.) While I share many of the Democrats’ priorities, it seems that in their enthusiasm regarding what they can achieve if they need but 51 votes in the Senate, Democrats somehow remain oblivious that what can be achieved with 51 votes can just as readily be undone with 51 votes. Presidents traditionally lose Congressional support in mid-term elections. Does anyone have any illusions as to what Senate Minority Leader Mitch McConnell will do if the filibuster is ended and the Republicans gain control of Congress? I would recommend to Mr. Biden that he get together with Mr. McConnell and literally ask him to come part way for the good of the nation – they’re both old men, who have perhaps waged their last campaigns — lest Mr. Biden, in order to retain the loyalty of the Progressive Caucus, is left with no choice but to lend his support to ending the filibuster. I would also suggest that Mr. Biden, notwithstanding any expressions of displeasure by progressive Democrats, redouble his efforts to maintain rapport and collaborate with open-minded Republican Senators such as Susan Collins, Lisa Murkowski, and Mitt Romney – to exploit the feelings they must have of being outcasts in their own party. I would seek to gently remind the President of what he already knows: that from Messrs. Thomas Jefferson and Alexander Hamilton through Messrs. Ronald Reagan and Thomas “Tip” O’Neill, progress through reconciliation of sincerely held competing views is the heart of the American legacy. It’s too early to give up on bipartisanship. I would submit that with a few exceptions, in our system the policy is not the point. The process is the point.
McCoy's Noise 