Biden Faces Another Intraparty Revolt

Biden Faces Another Intraparty Revolt

U.S. President Joe Biden delivers remarks on the October jobs report at the White House
By Yuval Rosenberg and Michael Rainey
Friday, November 5, 2021
Happy Friday! At least it started out as a happy day for President Joe Biden, with a strong jobs report offering signs that the economy is strenghtening. It may not end up that way, though, as continued Democratic infighting threatens to again delay the president's agenda.

Here's what's happening.

Biden Faces Another Intraparty Revolt

President Joe Biden explicitly called on the House to deliver him two legislative victories today by advancing both a $1 trillion bipartisan infrastructure bill and a $1.85 trillion package pairing social and environmental programs with tax changes. Members of his party weren’t able to overcome intraparty divisions to do it.

“I'm asking every House member, member of the House of Representatives to vote yes on both these bills right now,” Biden said Friday morning in remarks from the White House touting the economic recovery and a strong October jobs report. “Send the infrastructure bill to my desk, send the Build Back Better bill to the Senate.”

Democrats still scrambling to line up votes: House Democratic leaders, having postponed a vote on the Build Back Better plan Thursday night, scrambled Friday to line up the votes for both bills, but their efforts were frustrated by an ongoing split between centrists and progressives that forced them to hold off on the planned vote on the social spending bill.

A group of six centrist House Democrats, concerned about the costs of that plan, continued to insist that they wanted to see a formal Congressional Budget Office analysis of the bill before they would vote on it. With Democrats only able to lose three votes, that demand effectively delayed the planned Build Back Better vote.

Progressives responded by saying they would be willing to wait and then pass both bills together. “A full accounting of the spending and revenue has been provided by the White House, numerous pieces of the legislation have already been scored, and the [Joint Committee on Taxation] has put out analysis that Build Back Better will contribute to reducing the deficit,” Rep. Pramila Jayapal (D-WA), the Congressional Progressive Caucus chair, said in a statement. “However, if our six colleagues still want to wait for a CBO score, we would agree to give them that time — after which point we can vote on both bills together.”

But with Democrats eager for some sort of progress, the Congressional Black Caucus then offered up a compromise: hold a vote on the infrastructure package — BIF, in congressional parlance — and a procedural vote on the social spending plan.

“We had hoped to be able to bring both bills to the floor today,” House Speaker Nancy Pelosi told reporters Friday afternoon. “Some members want more clarification or validation of numbers that have been put forth, its top line – that it is fully paid for — and we honored that request. So today we hope to pass the BIF and also the rule on Build Back Better, with the idea that before Thanksgiving – it should take another week or so to get the numbers that they’re requesting…. Then we will have a Thanksgiving gift for the American people.”

Putting pressure on progressives: The leadership plan put pressure on progressives to fall in line and support the infrastructure plan even without the assurances they want on the larger package. President Biden reportedly called Jayapal Friday afternoon to discuss strategy, but Jayapal apparently told the president she would still not vote for the infrastructure bill. In all, about 20 progressives reportedly have indicated that they are ready to buck Pelosi — and Biden —and vote against the infrastructure bill today.

What’s next: Pelosi typically doesn’t bring up bills that don’t have the votes to pass — and while Pelosi told reporters she’s keeping her own whip count of votes, it’s not clear yet whether Democrats will be able to get the infrastructure bill to Biden’s desk. In the meantime, the delay on the Build Back Better act, which House leaders now hope to pass the week before Thanksgiving, adds to an already packed calendar toward the end of the year.

The bottom line: The lack of trust among Democrats continues to derail Biden’s agenda.

“If the House sends Biden the bipartisan infrastructure bill today- on top of the jobs report & recent COVID news, you could argue it’s one is the best days of his presidency,” Garrett Haake of NBC News tweeted. “If they don’t pass anything, it’s basically the third round of last week of September process fumble.”

Asked if she worries that the continued uncertainty over the status of votes makes it look like Democrats can’t get out of their own way, Pelosi acknowledged the challenge but added that her party isn’t “a lockstep party” and respects different opinions. “Welcome to my world,” she said. “This is the Democratic Party.”

Would the Build Back Better Bill Really Cost $4 Trillion?

Conservative Democratic lawmakers have slowed the progress of the Build Back Better bill, citing concerns about the ultimate cost of the spending package. Some critics have referred to a new analysis of the bill by the Penn Wharton Budget Model, which finds that under certain assumptions the bill could cost as much as $4 trillion over 10 years, or roughly twice the cost projected by the White House and the bipartisan Joint Committee on Taxation.

The assumptions, though, bear closer examination.

In order to arrive at their eye-opening $4 trillion figure, Penn Wharton analysts assume that virtually all of the programs in the bill will be extended, rather than ending after two or three years, as many of the programs are scheduled to do. While there’s little doubt that many of the bill’s supporters would prefer to see the programs extended or even made permanent, there’s at least some reason to be skeptical that will happen, especially given the growing expectation that Republicans will gain at least some control in Washington after the 2022 midterm elections. And if some of the programs were to be extended, lawmakers could — could — still provide new funding, in whole or in part.

As David Dayen of the liberal publication The American Prospect notes, “this is a highly unorthodox way to judge legislation, especially given a Congress that needs to be insistently pushed and prodded to do almost anything.”

In an analysis that sticks closer to the legislation as written, Penn Wharton finds that at least one version of the Build Back Better plan would cost about $1.87 trillion, while bringing in $1.56 trillion in revenue, over 10 years — results much closer to the ones provided by the Joint Committee on Taxation earlier this week.

But even that analysis does not include key provisions, including savings provided by drug price negotiations in Medicare and proposed changes to the state and local tax (SALT) deduction. To top it all off, a spokesperson told Dayen that the Penn Wharton analysis is based on an older version of the proposal from the White House, not the latest House bill.

The bottom line: Projecting the true long-term costs of the Build Back Better bill might require a crystal ball. And the Penn Wharton model, in particular, has been criticized by those on the left for some questionable or problematic assumptions.

Still, the latest version of the legislation does unquestionably rely on budget gimmicks decried by fiscal hawks for obscuring the potential long-term costs of its provisions, arguing that providing only temporary funding for programs intended to stay in place long-term — no matter what the legislative text says — only creates policy uncertainty. Fiscal hawks also warn about the budgetary risk of enacting such plans while existing programs like Social Security and Medicare already face financial shortfalls.

Job Market Bounces Back Strongly in October

U.S. payrolls increased by 531,000 in October, the Labor Department announced Friday, as the national unemployment rate fell to 4.6%. The stronger-than-expected results are boosting confidence that the recovery from the Covid-19 pandemic continues to gather steam.

“This is the kind of recovery we can get when we are not sidelined by a surge in Covid cases,” economist Nick Bunker of the job search site Indeed told CNBC. “If this is the sort of job growth we will see in the next several months, we are on a solid path.”

In addition, the numbers from previous months were revised upward, indicating the jobs recovery may have been stronger in late summer than economists initially thought. The job growth number for August was revised to 483,000, an increase of 117,000 from the initial reading, and the number for September is now 312,000, an increase of 118,000.

Employers continue to report difficulty hiring workers, and the demand for workers amid a persistent shortage helped push wages higher, with average hourly wages for private-sector workers rising 0.4% from September to October. On an annual basis, wages are up 4.9% — an exceptionally high level that is largely being erased by exceptionally high inflation.

The long-term trend: The U.S. has now recovered 81% of the jobs lost during the pandemic, with more than 18 million people returning to work, leaving the economy about 4.2 million jobs below the pre-pandemic peak of February 2020. However, if lost job growth is taken into account — that is, the jobs that would have been created in the absence of the pandemic — the hole is quite a bit deeper. According to Ian Shepherdson of Pantheon Economics, the number of missing jobs is nearly 9 million. “That should be the goal,” Shepherdson tweeted Friday.

In an increasingly worrying sign, the labor force participation rate has seen little change. About 61% of the potential labor force is currently working or looking for a job, roughly the same level as a year ago and close to lows not seen since the 1970s.

“Initially we thought it would be the end of unemployment insurance with 25 states ending those over the summer, but we really didn’t see an increase in participation,” Veronica Clark, an economist at Citi, told The Washington Post. “It’s childcare issues. It’s Delta. It’s almost like we keep making up stories why the participation rate isn’t coming back. But it could be something more structural."

The persistent weakness in labor force participation has more economists thinking about whether it may be driven in part by the early retirement of millions of baby boomers during the pandemic. “While the strength of employment was an encouraging sign that labor demand remains strong, labor supply remains very weak,” economist Michael Pearce of Capital Economics wrote in a note to clients. “We’re increasingly convinced that the fall in participation since the beginning of the pandemic will prove permanent.”

Joseph Brusuelas, chief economist at the consulting firm RSM, said he will be watching two demographic groups carefully in the coming months: baby boomers and prime-working-age women who have dropped out of the labor force in significant numbers. In the past, those groups have started to trickle back into the workforce once the unemployment rate drops below 5%. If they don’t come back, that would “signal what lasting structural damage there is to the workforce from the pandemic," Brusuelas told CNN.

Point-Counterpoint: Are Democrats Doing Too Much or Too Little?

The New York Times Editorial Board writes that this week’s election results indicate that Democrats should stop their intraparty squabbling and refocus on the “moderate policies and values” that can unite Americans:

“Tuesday’s results are a sign that significant parts of the electorate are feeling leery of a sharp leftward push in the party, including on priorities like Build Back Better, which have some strong provisions and some discretionary ones driving up the price tag. The concerns of more centrist Americans about a rush to spend taxpayer money, a rush to grow the government, should not be dismissed. …
“Many Americans, across party lines, are concerned about crime and border security and inflation. The high price of gas is causing particular pain. More than 60 percent of voters hold the Biden administration responsible for inflation. Polls show that many independents already think that the government is trying to do too much to deal with the nation’s problems.”

Times columnist Paul Krugman presents a counterargument today. “What the public perceives isn’t a party doing too much, but a party doing too little, and Biden and his allies need to end that sense of drift,” he writes, adding:

“There’s no evidence of a significant voter backlash against Biden’s social spending proposals. True, most people have no idea what these proposals are — all they’ve heard are top-line numbers, with even those often reported without context ($1.75 trillion would be only 0.6 percent of gross domestic product over the next decade). Beyond that, however, issue polling suggests that the main components of the proposed spending range from fairly popular to extremely popular.”

Read the full editorial and the Krugman column at The New York Times and let us know your takeaways from the elections by emailing us here.


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