McConnell’s Leverage Over a Biden Administration

By Yuval Rosenberg

McConnell’s Leverage Over a Biden Administration

Votes are still being counted and the winner of the presidential
race remains uncertain, but the election results are shaping up to
give Senate Majority Leader Mitch McConnell significant leverage
over a potential Joe Biden administration — and the Kentucky
Republican is reportedly ready to use it to shape not just
legislation but the Democratic administration itself.

We
told you yesterday how the GOP’s likely hold on
control of the Senate could scuttle the most ambitious and
progressive plans of an incoming Democratic administration, from a
larger stimulus bill to expansion of the Affordable Care Act to
reversing some Republican tax cuts.

It’s still possible that Democrats will gain a 50-20 split in
the Senate (a scenario that would require them to win runoffs for
both Georgia seats), but some Democrats are already acknowledging
they may have to set their sights lower and abandon plans to pass
legislation through the Senate without relying on Republican votes
by using a maneuver called “budget reconciliation” — the same way
they had passed the Affordable Care Act and that Republicans pushed
through their 2017 tax package.

“We all felt that we had the possibility of being able to really
change the direction of the country, and that’s not looking like a
realistic possibility right now,” House Budget Committee Chairman
John Yarmuth (D-KY) said, according to
The Washington Post. “We had prepared a lot of
memos on things like reconciliation that now we’re going to have to
file away unless something crazy happens in the Senate.”

Instead, any major legislation is likely to involve conflict and
compromise. “If Republicans keep the Senate, you can forget the
Biden agenda, but divided government doesn’t mean there won’t be
action. We’ll just be back to governing by conflict,” Brendan Buck,
who was a top aide to former House speaker Paul Ryan (R-WI), told
the Post. “There will always be pressure points and funding
deadlines that force action and force compromise.”

But continued GOP control of the Senate may give McConnell
leverage to shape more than legislation. “Republicans' likely hold
on the Senate is forcing Joe Biden's transition team to consider
limiting its prospective Cabinet nominees to those who Mitch
McConnell can live with,” Axios’s Hans Nichols and Mike Allen

report. “A source close to McConnell
tells Axios a Republican Senate would work with Biden on centrist
nominees but no ‘radical progressives’ or ones who are
controversial with conservatives.”

That reportedly could push Biden to drop some potential
progressive Cabinet members in favor of centrist options more
likely to be approved by Senate Republicans, like Lael Brainard, a
member of the Federal Reserve’s Board of Governors, for Treasury
secretary or Tony Blinken, who served in the Obama administration,
for State.

"It's going to be armed camps," the source close to
McConnell told Axios.

Quote of the Day: Would Trump Do a Big Stimulus Deal?

"Trump does not want the last thing he does in office a $2
trillion debt spending bill. We want Biden to own that, not
Trump."

– Economist Stephen Moore, an adviser to President Trump,
on the chances for a stimulus deal during the lame-duck session of
Congress if Trump loses the election (via The Washington Post’s
Jeff
Stein).

Layoffs Remain Stubbornly High as Covid Cases Hit New Daily
Record

No matter who wins the White House, they’ll be dealing
with an economy that is still showing signs of serious
stress.

About 751,000 people filed initial state unemployment
claims last week, the Labor Department
announced Thursday, a slight decrease from the
week before but
more than analysts expected. Another 363,000 filed
for Pandemic Unemployment Assistance, the federal program that
covers gig workers and the self-employed, bringing the total of new
filers to roughly 1.1 million, little changed from last
week.

All told, about 21.5 million people are receiving come
kind of unemployment assistance, a decline of 1.1 million from the
week before — but about 15 times higher than the same time last
year, before the Covid-19 took hold.

Unprecedented conditions: Eight months
after the pandemic began to tear through the U.S. economy, layoffs
— which are roughly in line with new unemployment filings — are
still at historically high levels. “Last week was the 33rd straight
week total initial claims were far greater than the worst week of
the Great Recession,”
said Heidi Shierholz of the Economic Policy
Institute.

A new Covid milestone: Economists
worry that a new wave of infections could dramatically slow the
already faltering recovery, and public health officials are
delivering bad news in that regard. “The United States on Wednesday
recorded over 100,000 new coronavirus cases in a single day for the
first time since the pandemic began, bursting past a grim threshold
even as the wave of infections engulfing the country shows no sign
of receding,” The New York Times
reported.

Fed chief warns: Speaking to reporters
after a meeting of the Federal Open Market Committee, Federal
Reserve Chair Jerome Powell said that the outlook for the economy
is “extraordinarily uncertain” and that he was concerned about the
resurgence of the coronavirus. The pandemic is the biggest threat
to the economy, Powell
said, forcing households to run through the
savings they accumulated from enhanced unemployment benefits and
stimulus checks, which were provided by federal programs that have
now run out of money, with no clear plan in sight to revive
them.

The Fed chief said he was confident that officials could
maintain financial stability in the broader economy, but they would
need help from lawmakers when it comes to households and consumer
demand. “We’ll have a stronger recovery if we can get at least some
more fiscal support, when it’s appropriate and at the size Congress
thinks is appropriate.”

Waiting for a vaccine: “A sustained
recovery will not occur until a vaccine is widely available, likely
in mid-2021, at best,” Dante DeAntonio, an economist at Moody’s
Analytics, said in a note Thursday. Until then, risks to the labor
market “are weighted heavily to the downside.” DeAntonio added that
the “increased spread of the virus across much of the country could
result in an even larger pullback in business activity than
expected. Further, the breakdown of talks for additional fiscal
stimulus prior to the election left households, businesses, and
state and local governments in the lurch waiting for additional
support. This will further weaken an already-fragile labor market
recovery.”


The memes have made this wait at least a bit more
tolerable.
This one may be our favorite.

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