In a post a while back assessing President Joe Biden’s performance during his first 100 days in office, I awarded him an A+ for his Administration’s efforts against the Coronavirus, indicating that it had consistently under promised and over delivered.  The Administration recently announced that it will not meet its goal of getting 70% of adults at least partly vaccinated by July 4.  I stand by my grade, and think any open-minded American will agree.  The Administration’s failure to meet its goal arises from the lethargy and obstinacy of too many Americans.  As my mother used to say:  You can lead a horse to water, but you can’t make it drink.

In a note last week on Infrastructure, I opined that Republican Senators working on a bipartisan infrastructure bill would be unable to muster support for their effort among 10 members of their caucus – the threshold to avoid a Senate filibuster.  While remaining mindful of another of my mother’s sayings – “There’s many a slip ‘twixt the cup and the lip” — and despite my suspicion that the Progressives apparently outraged by the compromise could be as intransigent as the Republican Freedom Caucus has been in the past, there is at the time this is posted at least the prospect of passage of a bipartisan bill allocating sums to refurbish our infrastructure that will exceed all such predecessor laws. If such a measure does become law, it will in our toxic political environment be a notable and heartening achievement by the bipartisan Senate group, Mr. Biden, and his team.  Hopefully, the doubts I expressed in my infrastructure post about the bipartisan group’s ability to get legislation enacted will prove to be woefully wrong-headed. 

At the time this is typed, the Biden Administration and the Senate are wrangling over what constitutes infrastructure, how much to spend, and how to pay for it.  Let’s leave taxes – a weighty subject worthy of its own note – for another post.

As to what constitutes infrastructure:  I am more aligned with the Republicans’ view than with the Democrats’.  The recent Texas power grid failure, the Solar Winds hack, the Colonial Pipeline cyberattack, and the recent internet cloud provider Fastly “glitch” (that affected, among others, the United Kingdom’s main public service portal and The New York Times) demonstrate the current vulnerability of many of the critical aspects of our infrastructure – both those under government and private control – to natural hazards and terrorist threats.  I would submit that we should focus our infrastructure investment – through governmental direct spending and tax concessions (buttressed by regulation and oversight) to those private entities controlling critical aspects of our infrastructure  — on roads, bridges, rail, public transit, national broadband expansion, reinventing our electric power grid, securing the safety of our water supply, and other like priorities.  There are some areas, arguably tangential to these “core” priorities, in which I would like to see us invest, including some climate-related initiatives, support for semiconductor chip industry, and technology to mine and exploit rare earths (a vital arena in which China currently wields almost monopolistic influence).  Although I have sympathy for a number of the priorities that the Administration and Democrats have sought to shoehorn within their definition of infrastructure – childcare assistance, elderly and disabled care, electric vehicle incentives, workforce development programs, and paid family leave — these are not infrastructure.  I would submit that Democrats’ attempt to include funding for these priorities within their infrastructure proposal risks, in an old business phrase, sacrificing the good for what they consider the perfect.

I am certainly not versed enough to know how much total infrastructure spending is appropriate or how whatever is finally enacted should be allocated among different core infrastructure priorities.  That said, based upon reports of their respective positions, I am again closer to the Republicans’ position than I am to the Democrats’.  The Republicans want to fund part of the new infrastructure program out of previously-enacted COVID relief; Democrats do not.  My view:  with the nation approaching herd immunity, vaccine doses going unused, the economy rebounding faster than the economic community expected, jobs going unfilled, and annualized inflation currently running well above 40-year norms, I harbor doubts that all of the still-unspent COVID relief is truly needed (there are undoubtedly areas in which unspent sums will still provide value).  To the extent that the enacted excess can be identified, it should be shifted to other national priorities including infrastructure.  We do not need gratuitous spending.  A notable segment of financial analysts, contrary to the belief of the Fed and the Administration, clearly feels that unhealthy inflation levels and a deepening federal debt are indeed potential respective outcomes of the Fed’s monetary policies and the Administration’s fiscal policies.  As all readers of these pages are aware, I have no economic background, but I share that segment’s uneasy sentiments. On infrastructure, we should spend what we need to spend, not feather ancillary aspirations. 

As all who care are aware, the White House called off infrastructure negotiations with a Republican Senate group led by U.S. WV Sen. Shelley Moore Capito right before the President left for Europe because it considered the Republican proposals unacceptably stingy.  This was seemingly a wise move, inasmuch as a bipartisan group of five Democrat and five Republican Senators including U.S. UT Sen. Mitt Romney and U.S. WV Sen. Joe Manchin has since agreed upon a heftier infrastructure package, with an expenditure approximating $1B over five years, focusing on core infrastructure and funded in part by repurposing some COVID relief funds.  As he returns from overseas, President Biden will confront conflicting priorities:  to get as much of his agenda through Congress as he can before the 2022 campaign season truly heats up, contrasted with a desire to strike a deal with Republicans that will demonstrate to the centrist Americans who voted for him that he is able to accommodate competing views as he claimed he could during his presidential campaign. 

Otto von Bismarck, German Chancellor in the late 1800s, is generally credited with the observation, “Politics is the art of the possible.” The President is facing the reality that the vast majority of his party will wish him to use the Senate’s reconciliation process to push through their laundry list of priorities, and will threaten not to support a measure that they consider but half a loaf.  On the other hand, I fear progressives’ preferred approach will feed the Republicans’ claim that Mr. Biden has proven to be more “socialist” than he promised during the campaign, in my view thereby endangering Democrats’ electoral prospects in 2022 and 2024.  If advising Mr. Biden, I would suggest that he tell Sen. Romney and his four Republican colleagues in the bipartisan group that if they can get five more Republicans to publicly indicate by June 30 that they will vote for the bipartisan group’s proposal, Mr. Biden will publicly support it – and tacitly dare disgruntled progressive Democrats to oppose it.  At the same time, I would further suggest to the President that he tell Mr. Manchin and the Democrats in the bipartisan group that if the bipartisan Republicans cannot garner the support of five additional members of their caucus by June 30, it will prove that his and these centrist Democrats’ professed faith in bipartisanship and Republican goodwill was a pipedream, and that Democrats should stand together to use the Senate’s budget reconciliation process — including tax increases to be determined — to enact the expansive infrastructure priorities that the Administration originally proposed.

My guess: Mr. Romney and his colleagues will not be able to get another five Republican votes. The Democrats will have to go it alone on this, and, where they can, other measures. The dishearteningly intractable partisan posture maintained by most official Republicans and many Trump voters since Mr. Biden’s inauguration is certainly worthy of a post; but this note is best left to infrastructure.

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.

[The remainder of the “Pushing the Big Truth” post published on January 29 has not been forgotten, merely deferred  ;)]

Yesterday, ten more or less moderate Republican Senators including U.S. UT Sen. Mitt Romney, U.S. ME Sen. Susan Collins, and U.S. AK Sen. Lisa Murkowski journeyed to the White House to present an alternate $600B COVID relief package to the $1.9T COVID relief package offered by the Biden Administration.  Tellingly, neither Republican Senate Minority Leader Mitch McConnell nor any of his Senate Republican Leadership Team were among the ten.  Equally illuminating is the fact that Senate Majority Leader Chuck Schumer has reportedly declared that Senate Democratic Leadership is sticking to the Administration package, and, undoubtedly still smarting from being manhandled by Mr. McConnell and his Senate cohort for the last decade, has criticized the attempt to bypass Senate Democrats in COVID negotiations.

The fact that the Republican Senate group numbers ten is vital; if ten Senate Republicans and all 50 Senate Democrats agree to support a given COVID relief bill, it would be filibuster-proof in the Senate.

The Democratic package seems an opening negotiating “kitchen sink” salvo, even including a provision to raise the minimum wage to $15 (which, no matter how one feels about the measure on its own merits, presumably not even the most ardent progressive can claim is directly related to COVID relief).  The Republican proposal is, presumably, an opening “low ball” response, and I understand continues Republicans’ reflexive resistance to assistance to state and local governments (which I find silly, and partisan).

There is no dispute that Congress’ earlier COVID relief bills employed a shotgun approach necessitated by the immediacy of the crisis, and left some Americans without the relief that one would have wanted them to receive — which Democrats now seek to remedy through their package — while providing other Americans inappropriate windfalls — which Republicans now seek to avoid through their response.

One can, of course, find an economist on virtually every side of every issue.  Some very reputable economists, including U.S. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell, feel that it is critical for the federal government to provide massive amounts of aid to the economy at this point in order to stave off recession and unnecessary hardship.  Other reputable economists, while acknowledging the necessity of addressing areas of genuine American need, caution that too much indiscriminate aid will overheat the economy, ignite inflation, make our already-huge deficit hole even deeper than it needs to be, thereby endangering our future ability fund other critical programs (see Defense, Social Security, and Medicare/Medicaid).

The Republican initiative creates a pivotal dilemma for Mr. Biden.  Much of the actual COVID relief components of his bill can apparently be passed with simple Congressional majorities via a legislative mechanism called, “budget reconciliation.”  As it stands, the GOP overture is too stingy; but if the Republicans are willing to meaningfully increase their offer, if advising Mr. Biden I would suggest that as he weighs the relative political and substantive merits of a compromise with Republicans against budget reconciliation, he should consider:  What exactly does he think his mandate is?  Why did the American people choose to hire him rather than retain Donald Trump?

Do more of his voters support him – and are, perhaps, non-cult Trump voters more comfortable with him — due to his pledge to more effectively combat the Coronavirus than Mr. Trump did?  Or to get the minimum wage raised to $15?

Do more of his voters support him – and are, perhaps, non-cult Trump voters more comfortable with him – because they want him to seemingly indiscriminately spread money across the economy (virtually everyone has heard of someone who got more from the first COVID packages than they were making before the pandemic)?  Or because they hope that Mr. Biden can restore a sense of decency and decorum to the presidency?

Do more of his voters support him – and are, perhaps, non-cult Trump voters more comfortable with him – because they relish the notion that now Democrats can unilaterally impose their policy ideas on America in the same manner as Republicans did while they controlled Congress?  Or because they hope that Mr. Biden could restore a spirit of compromise to our legislative process?

Mr. Biden has thus far issued a slew of Executive Orders that could have come as no surprise to either Mr. Biden’s friends or foes.  For the most part, these Orders were foreseeable and haven’t impaired his overall standing with the American people (he has issued a couple of more controversial Executive Orders that I would have deferred, but that’s for another day’s note).  But he pledged during the campaign and in his inaugural address to be the President for all the people.  He clung to the notion throughout the Democratic presidential nomination contest — a notion that seemed an albatross in the early days of the campaign when contrasted with the more stridently partisan positions of his adversaries — that Republicans could be worked with, and that he had a record of successfully working with them.  (In this one particular, query whether Mr. Biden’s campaign claim was substantively different from Mr. Trump’s 2016 declaration that he “knew how to make deals.”)

Mr. Biden’s obviously genuine belief that progress can be made through amicable compromise – along with an expectation that he would more competently address the COVID crisis — was, I submit, the most important reason he defeated Mr. Trump.  If he turns his back on compromise now, I fear that the parties will immediately return to gridlock.  Granted, he needs to get a bill that addresses the most glaring areas of need, but I believe that Sens. Romney, Collins, and Murkowski are reasonable people [I don’t know enough about all ten ;)].  If Mr. Biden can get a bipartisan package less than his current proposal that nonetheless addresses the nation’s critical COVID needs, I think he should eschew budget reconciliation and do the deal, as long as he also gets – and can publicly recite – a pledge from his “Republican friends” that they will collaborate upon further relief in the future if, as Democrats believe, such proves necessary.  He has the means to avoid Republican stalling through the “hammer” of budget reconciliation, a process already begun; the GOP group is undoubtedly aware that their window to achieve a compromise is short before the substantive and political pressure on Mr. Biden to proceed unilaterally will become too great.

To Mr. Schumer, perhaps to Speaker of the U.S. House of Representatives Nancy Pelosi, perhaps to U.S. VT Sen. Bernie Sanders, perhaps to U.S. NY Rep. Alexandria Ocasio-Cortez, if any are disgruntled with the compromise, Mr. Biden should say:  I got elected.  This is why.  Trump would have beaten any one of you.  My mandate was to treat the nation’s divisiveness as well as its Coronavirus.  Are you going to help me, or not?