Is Joe Biden Still a Deficit Hawk?

By Yuval Rosenberg

Pelosi, White House Eye Smaller
Coronavirus Aid Deal

Glimmers of hope emerged Wednesday for progress on a new
coronavirus relief package. Negotiations have been deadlocked for
nearly two weeks, with Democratic and Republican negotiators still
at least $1 trillion apart in their proposals.

With House Democrats returning to Washington from their
summer break for a vote Saturday on a $25 billion bill that would
boost funding for the U.S. Postal Service and beef up delivery of
first-class mail, including the millions of ballots that will be
sent by mail in the upcoming election, House Speaker Nancy Pelosi
(D-CA) indicated that Democrats might be willing to pare back their
demands in order to cut a deal now and then consider another
package after the November elections.

The Trump administration, meanwhile, is saying it would be
open to a narrower deal.

“I think the outlook for a skinny deal is better than it’s
ever been, and yet we are still not there,” White House Chief of
Staff Mark Meadows told reporters on Wednesday. “If Speaker Pelosi
moves forward a single bill on postal ... let’s add in the things
we can agree upon.”

Democrats looking to expand Postal Service bill:
Led by members of the moderate New Democrat Coalition, a
group of 117 House Democrats sent a letter to Pelosi and Majority
Leader Steny Hoyer (D-MD) requesting that the post office bill
include new funding for unemployment benefits. The
letter calls for the House to consider the
Worker Relief and Security Act, which would extend a $600 per week
federal boost to jobless benefits for the duration of the
coronavirus crisis, and revise the unemployment system by linking
it to national and local unemployment rates.

The White House said Wednesday that it would consider the
Democrats’ bill, as long as additional relief provisions are
included. “We’re certainly open to looking at the $25 billion, but
we want included in there relief for the American people,” White
House spokesperson Kayleigh McEnany said.

A new Republican bill. Senate Majority Leader Mitch
McConnell (R-KY) expressed doubts Tuesday about the House plan for
the post office. "I don't think we’ll pass, in the Senate, a
Postal-only bill," he told the Louisville Courier
Journal.

But Republicans are reportedly working on a “skinny”
coronavirus relief bill that would cost about $500 billion and
would omit some provisions that negotiators have been unable to
agree on, such as student loan relief and aid to states and cities.
A draft bill circulated by Senate Republicans would provide
enhanced unemployment benefits of $300 per week through December,
more aid for small businesses and protections for businesses from
Covid-related lawsuits. It would also provide $10 billion for the
Postal Service by converting an existing loan into a
grant.

Pelosi may alter her stance. The draft Republican
bill is far smaller than the $3.5 trillion package passed by the
House in May, and well below the $2 trillion that Democratic
leaders have cited as a minimum during the negotiations. But Pelosi
suggested Tuesday that she might agree to a smaller relief package
in order to get funds for the Postal Service and a new round of
unemployment payments, while postponing other major parts of the
relief package until January, after the election.

Saying she didn’t want the relief package to clash with
potentially contentious government funding negotiations in
September, Pelosi told Politico that, “We have to try to come to
that agreement now. We’re willing to cut our bill in half to meet
the needs right now. We’ll take it up again in January. We’ll see
them again in January. But for now, we can cut the bill in
half.”

Is Joe Biden Still a Deficit
Hawk?

As Joe Biden prepares to formally accept the Democratic
presidential nomination Thursday, he’ll be looking to convince
Americans that he, not President Trump, is best prepared to meet
this moment in history and tackle a public health crisis, the
economic devastation it has wrought and the financial, racial and
social inequities that existing long before anyone had heard of
Covid-19.

Biden has unveiled what his campaign has labeled a
“Build Back
Better” agenda calling for investments in U.S.
manufacturing; infrastructure and green energy; child and elder
care; and addressing the racial wealth divide. But the Democratic
convention, as is typical, has emphasized Biden’s personal story
more than his policy vision. As Michelle Obama put it in her speech
Monday night, he’s a “profoundly decent man.” The overarching
message: He’s a good guy, caring and empathetic, who understands
the struggles so many now face and can restore some sense of
normalcy to our Trump-tattered country.

“His campaign may have produced mountains of policy plans,
but Biden does not have what could be described as a unified policy
vision around which he is trying to unite the public,” The
Washington Post’s Paul Waldman
writes.

The policy fights are coming, though, and as he seeks to
unite Democrats and connect with a broad swath of the voting
public, Biden may still need to do more than convince people that
he’s a genuinely nice guy. He will need to lay out some sense of
what a Biden presidency would look like and what it would mean for
Americans worried about their own lives as much as they are about
the “soul of the country.”

The answer to what a Biden presidency would look like is
inextricably linked to another question, one that underlies the

lingering reservations many on the left wing of
the Democratic Party
still harbor about their nominee based on his
years in office: Is Joe Biden still a deficit hawk?

As Vox’s Dylan Matthews
points out, Biden’s campaign may be talking about
an ambitious, “FDR-sized” administration, but “there is a tension
between this ambition and the man himself”:

“For all of the avowed boldness of an agenda shaped by
Covid-19, the man pitching it remains … Joe Biden. He is a creature
of the establishment, a product of a Democratic Party built for the
(relative) boom times of the 1980s and ’90s, a Senate from a less
polarized era, and an Obama administration that believed it could
transcend Washington (it could not).
“When you talk to his campaign, you can see glimpses of
that Biden. Yes, he’s proposing these multitrillion-dollar plans —
but his advisers insist he’s a deficit hawk at heart.
…
“There are two visions of a Biden presidency. One
involves sweeping investments in clean energy, new jobs, and a fast
recovery from the Covid-19 pandemic and recession.
“The other involves McConnell forcing Biden into brutal,
humiliating budget deals that usher in austerity and strangle the
recovery in the crib.
“Therein lies the fundamental tension in Biden’s
candidacy: To enact his promised agenda, President Biden will have
to be bolder than Sen. Biden and Vice President Biden ever
were.”

Bloomberg News’s Jeffery Taylor, Mike Dorning and
Jennifer Epstein
suggested this week that anyone looking to predict
how Biden would try to tackle the coronavirus crisis and its
economic effects can find clues in the way he responded to the
financial crisis and its aftermath as vice president. Their
conclusion: “As he did in 2009, Biden considers running up the
deficit as an unfortunate but necessary side effect of pumping
money into the economy.” Or as Bloomberg summarized it in a
subheadline: “Biden won’t shy from taxes or deficit increase to
meet goals.”

Read more at
Vox or
Bloomberg.

Supreme Court to Hear Obamacare Challenge a Week After
Election

The Supreme Court announced on Wednesday that it will hear
arguments in the case challenging the constitutionality of the
Affordable Care Act on November 10, a week after Election Day.

Why it matters: The case, brought by Republican state
attorneys general and supported by the Trump administration, could
invalidate the Obama health-care law and its protections for people
with pre-existing conditions. It could create chaos in the
health-care system, resulting in millions of Americans losing their
coverage.

The announcement comes as Democrats have made health care a main
focus of their election messaging, hitting President Trump for his
response to the Covid-19 pandemic and his efforts to repeal
Obamacare without proposing a plan to replace it even as millions
of workers have lost their jobs and risk losing their insurance.
But the hearing date means that arguments will come only after
November’s ballots have been cast. A decision in the case is
expected by June 2021.

Chart of the Day

The global economic rebound in the third quarter will be
driven in part by “strong and enduring” government stimulus,

says Jeffrey Kleintop, chief global investment
strategist at Charles Schwab. That support varies by country,
though, as the chart below indicates. “The combination of fiscal
and monetary stimulus as a percentage of GDP ... suggests that
recoveries in Europe are well supported,” Kleintop said in a recent
market analysis. “On the other hand, the expected strong rebound in
the U.K. is challenged by weak policy support and intense
lockdowns. Similar circumstances apply to India, Mexico and other
South American countries.”

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