Biden’s Ambitious Social Program Stumbles Toward the Finish Line

[Updated November 20]: That President Joe Biden’s progressive social and climate legislation has been sharply cut back and reconfigured from the $3.5 trillion that was originally proposed comes as no surprise. That he and Democrats in Congress embarked on so colossally ambitious a program, along with $1.2 trillion for infrastructure, with only a tie-breaker vote in the Senate, three votes to spare in the House, and riven by factions of centrists and progressives in their own party, should have signaled folly from the start.

And yet, Democrats carried on wishfully for months, making no
Bleak house?
modifications to their Utopian scheme, as if dissidents among them would surely be placated or not be foolish enough to block the agenda. The $1.9 trillion bill (now named the Build Back Better Act) passed the House but intractable obstacles await in the Senate.

early warning

Democratic Senators Joe Manchin (WVa) and Kyrsten Sinema (Ariz) presented themselves as obstacles at the outset. Then, the issue was getting rid of the filibuster. We reported their intransigence as far back as March (“How the Filibuster Threatens Biden’s Presidency”), with Manchin going on Fox News (that’s not a typo) to say “I will not vote to do that”. Sinema was equally emphatic, telling Oklahoma Congressman James Lankford, “I would always oppose efforts to eliminate the filibuster”.

The worry that the infrastructure bill would be filibustered didn’t happen, but their position on the filibuster now carries over to the two voting rights bills which their obstinacy threatens with extinction.

In August, the infrastructure package was passed in the Senate by a wide, bipartisan 69-to-30 margin. Enough Republicans were enthusiastic about bringing home money and jobs to their states that they brushed aside the harangues and threats from Donald Trump against voting for it. He had promised infrastructure legislation as part of his “I alone can fix it” presidency but had so failed to do anything that “infrastructure week” became a joke. He now called fellow Republicans who voted for the bill “weak, foolish, and dumb RINOs” (Republicans in name only) for following through on what he had pledged to do.

near fatal embrace

The biggest hurdle then came from the progressives in the House, a 100-or-so member caucus led by Washington state’s Pramila Jayapal. The progressives have insisted that the giant $3.5 trillion social spending bill first be passed in the House before they will vote on infrastructure. Jayapal believes that if infrastructure were passed first and on its own, the social and climate spending bill would simply die. The risk was that in a standoff both would.

Centrists in the House object to what the huge size does to the national debt, already at $28 trillion. And Speaker Nancy Pelosi has to look over at the Senate where the intractable duo of Manchin and SInema have multiple objections.
Senators Joe Manchin of West Virginia,
and Kyrsten Sinema of Arizona. Mum’s the word.

The bill would use the “reconciliation” process that rules out filibustering and requires only a simple majority for passage, but no point passing the bill in the House if the Senate is short the full 50 votes (plus Kamala Harris’s tie-breaker) needed.

Having discovered from their filibuster stance how much power they have in running the Biden administration, Sinema and Manchin have come up with a profusion of demands. Their objections to the $3.5 price tag has led to an agreement to a cost hovering around $2 trillion for Manchin, but the Arizona Garbo won’t commit to anything, basking in the plenitude of media profiles that wonder at the mystery woman’s elusiveness. After meeting with her, House Ways and Means Committee Chairman Richard Neal (D-Mass.) said her three priorities were a child tax credit, paid leave programs, and a tax credit for renewable energy programs, yet elsewhere she said she wanted $100 billion cut from the climate program.

Ms Sinema has come up with new demands at this last minute. The Wall Street Journal reported that Sinema “has told lobbyists that she is opposed to any increase” in taxes on capital gains, high-income individuals or businesses. Running counter to virtually universal Democratic policy and contradicting her own vote against the 2017 tax cuts when in the House, this would seem to be an act of deliberate sabotage.

Tax increases are essential to paying for the Build Back Better plan. Bills passed by reconciliation expire, usually after 10 years. Their provisions cease, or revert to the status quo ante of the years before their passage. Senate rules say that a reconciliation bill must pay for itself. More specifically, while it can be in the red in some years, it must show, as analyzed (“scored”) by the Congressional Budget Office, that it will not increase the deficit beyond its time span.

The three tax changes that Sinema objects to have all along been essential to Biden to pay for his agenda. He has persistently said, as he did again as late as this month in Michigan, that “The cost of these bills, in terms of adding to the deficit, is zero. Zero. Zero.” That’s a highly dubious claim even with the tax increases he proposed and a fantasy if Sinema withholds her vote.

Already dropped from Biden’s plan was a tax at time of death on the gain in value of assets that otherwise transfer tax-free to inheritors. As always, this badly needed fix to the inequitable tax code was abandoned when Democrats in Iowa and Montana revolted, saying it would hurt family farms, even though Biden was open to exempting farms worth less than $25 million and stretching tax payments over fifteen years for those above.

The reduction to $2 trillion at least means less money needs to be found to pay for it, but Senator Sinema’s remarks set off a scramble to find other sources of revenue.

What happened to funding the IRS to pursue tax cheats? The proposed cost was $80 billion, but it was projected to bring in as much as $700 billion from enforcement. If added to the social and climate bill, that theoretical gain could be counted as payment for Biden’s master plan, but it has disappeared as a topic. Of course, Sinema objects to that, too. So do some centrist Democrats who perhaps think the IRS could force their wealthy campaign donors to pay up.

There is the proposal to permit Medicare to negotiate drug costs rather than accept whatever pharmaceutical companies charge. Drug charges in the U.S. run to triple what companies charge in OECD countries. Yet Republicans in the George W. Bush years passed a law that forbade Medicare from negotiating prices to ensure that hefty campaign donations from pharma companies would keep coming. A solid 88% of voters want that repealed so that the federal government can be free to negotiate, even 77% of Republicans. The freedom of Medicare to cut deals could save taxpayers half a trillion dollars over a decade.

But three House Democrats don’t like the idea, and Ms Sinema has decided she doesn’t like it either, even though she campaigned on lowering drug costs. Over her political career the senator has taken in some half a million dollars from pharmaceutical PACs and direct contributions from corporate executives. The $120,000 in support that her campaign received in 2019 and 2020 just may have turned her head. It is the same with the three House Democrats. Altogether, the four of them have collected $2 million from drug companies.

What about a carbon tax — long thought the best answer to curbing emissions? It would raise a ton of money to offset the Biden agenda’s cost, but Manchin and Senator Jon Tester (Mont.),
The president and Nancy Pelosi are in a high wire act.
both from coal-producing states, will have none of that.

Nevertheless, and despite the three House Democrats, Ms Pelosi emerged from a White House breakfast with the president, pretty much as this is written, to say that a deal is “very possible”, that 90% of the bill is agreed to and written.

the cupboard almost bare

So what’s the plan now to recover enough funding to pretend to cover the cost of the bill?

Already dropped from Biden’s plan was a tax at time of death on the gain in value of assets that otherwise transfer tax-free to inheritors. As always, this badly needed fix to the inequitable tax code was abandoned when Democrats in Iowa and Montana revolted, saying it would hurt family farms, even though Biden was open to exempting farms worth less than $25 million and stretching tax payments over fifteen years for those above.

So the White House in desperation has at this last minute turned to Elizabeth Warren’s dream of taxing the accumulated wealth of the richest among us. The White House is looking at ideas to go after the 700 most moneyed American families, the wealthiest 0.0002 %.

Unlike the simplicity of tax brackets, the proposal promises unwieldy complexity. Billionaires and households earning more than $100 million in income three years in a row would be subject to annual taxes on the increased value of assets such as stocks (net of paper losses) regardless of whether they sell those assets. The plan would also somehow tax assets that are not easily tradable, such as real estate.

What does Sinema have to say about that? “Officials and other senior Democrats are cautiously optimistic”, says one news break, but the real answer is, no one knows.

What’s left and what’s gone?

It is difficult and imprecise to deduce what remains in the $2 trillion bill; negotiators have kept it vague, so this is sketchy. Best guesses:

 Universal pre-K schooling for kids ages 3 to 4 is still alive as is the extension of the child tax credit, although probably reduced in amount and/or duration. Together the objective is to cure the diminished presence of women in the workforce as a key component in invigorating the economy. Having to pay for day care makes discouragingly little what is left in a paycheck weighed against the effort and time spent working, Additionally, these programs cut child poverty dramatically. Early education has been shown in actual case studies — in which groups have been tracked through decades — that life outcomes are improved.

 Paid family leave, originally 12 weeks, has been scaled back to four, that is, if Mr. Manchin goes along, as he has expressed misgivings about the U.S. adopting what is commonplace in all other developed nations. He has said he wants to avoid “changing our whole society to an entitlement mentality”.

 Two years of tuition-free community college have been pulled from the bill.

 The president’s provisions to combat climate change are surely retained else he would look hopelessly ineffectual. But Manchin dealt the program a major blow when he refused to vote for a bill that contains the Clean Energy Performance Program (CEPP). That provision calls for companies to be penalized for failure to adopt renewable energy methods to reduce carbon dioxide emissions. The senator (along with John Tester of Wyoming) represents a coal-producing state that, in West Virginia’s case, produces almost all its energy in coal-fired plants and would be heavily penalized under the statute. Removal of CEPP, which of course applies nationwide, is estimated to cut a third of Build Back Better’s climate impact. That amounts to a failure to curtail as much as 700 million metric tons of emissions a year, according to Energy Innovation, a nonpartisan energy and climate policy think tank, which poses a serious threat to the president’s pledge to to halve emissions by 2030.

 All is quiet about whether the proposal to assist the IRS to identify tax cheats has survived intense blow back from banks. Authored by Senators Elizabeth Warren (Mass.) and Ron Wyden (Ore.), the measure would require banks and other financial businesses that deal in money transfers to annually report customer accounts that show inflow and outflow transactions other than wages that exceed $10,000. That’s for an entire year, which works out to be, well, just about everyone (just think of credit card transactions for food, gas, etc.) Originally they proposed a ludicrous $600 with no mention of the wage exemption.

Our question is: What will make one account look any different to the IRS than any other with the same level of activity?

Banks are fuming, and not just from asking them to spy on their customers. Inevitably, amendments will exempt other types of inflow and outflow. How are financial institutions to develop code to identify and exclude them? Banks foresee a dreadful year-end horror, mainframes smoking like like bitcoin miners to sift and tally a hundred million-plus accounts.

The White House view of banks’ complaints was made clear by House press secretary Jen Psaki: “It’s about big banks deciding to protect wealthiest Americans that get away with not paying the taxes they owe by fighting this common-sense solution.” Presidents and legislators, of course, have no clue of the effect of their whimsy out in the real world.

“Stay tuned” fits this story.

Rising Discontent Says It’s Time to Reform the Supreme Court…

The Supreme Court is back in session facing a docket filled with controversial cases involving abortion, gun rights, and religion that are bound to stir anger no matter how decided. The court’s new 6-to-3 configuration whereby Trump’s three conservative appointments have overloaded the right end of the bench has made the court itself controversial, with a public that questions its legitimacy giving it an approval rating that has dropped to an unheard of 40% in a recent poll.

President Biden deflected the radical proposition of packing the court –adding four liberal justices to flip 6-to-3 to 6-to-7 — by appointing a commission to examine the merits and legality of how the court might be reformed. The ideas debated revealed that there is a great deal more dissatisfaction with the court than its rightward tilt.

The Court’s power has attracted the most debate. Because Congress has chosen deadlock over compromise and ceded much of its role to the executive branch, it has left the courts to decide cases that should have been made unnecessary by legislation. The upshot is that the court is thought to have gone well beyond “calling balls and strikes”, as Chief Justice John Roberts memorably described his role in his confirmation hearing. Republicans have long complained of an activist Supreme Court guilty of legislating from the bench, but beginning with the court deciding the presidency in Bush v. Gore in 2000 followed by hotly disputed decisions such as Citizens United and the evisceration of the 1965 Voting Rights Act, it is now the Democrats who are leery of the court’s activism.

A prevailing complaint is that the Court too readily confers on itself the right to strike down laws passed by Congress. The right of judicial review dates from 1803’s Marbury v. Madison in which Chief Justice John Marshall declared that the Supreme Court’s rightful role was to review whether legislation passed by Congress passed muster with the Constitution. That established the court’s right of judicial review which, miraculously, has held fast for over two centuries. The court has no direct enforcement powers; it has no army and must rely on the lower courts and law enforcement to uphold its decisions. That requires the Supreme Court to work constantly to gain respect. In his book on the authority of the court, Justice Stephen Breyer cites Cicero, that the only way to ensure obedience to the Supreme Court’s pronouncements is for its decisions to be just.

Instead, we have seen the court reverse the right of unions to collect dues from non-members which had been found constitutional in a 1977 decision, okay the transfer of congressionally allocated defense money to build Trump’s wall, decided to let gerrymandering run amok, approved the ban of entry of people from Muslim countries (accepting a contrived workaround) which is against a law passed by Congress against discriminating against people by nationality. These examples are popular with a broad swath of Americans who care little for the rule of law, but for those conscious of the law and its preservation, its flouting by the court has bred distrust.

The public has questioned the court’s legitimacy when they have seen it overturn laws with a polarized 5-to-4 vote, a margin of a single justice negating a legislative body of 535 members elected by the people. Biden’s commission is pondering whether the Court’s jurisdiction to hear constitutional challenges to certain types of laws ought to be taken away, or whether a super-majority should be required for such decisions (which, of course, might not do much good with the court now split 6-to-3), or whether Congress should be given the right to reject a court’s invalidation of a statute, much as it can override a presidential veto.

The Supreme Court would likely strike down an attempt at so-called jurisdiction stripping, but the Constitution allows it. Article III hands jurisdiction to the court, but with “such Exceptions, and under such Regulations as the Congress shall make”.

flood the zone

The addition of a sixth conservative in the person of Ms Barrett led to a flurry of opinions about packing the court to counteract the 6-3 rightward tilt, but the commission has paid little attention to that. The Constitution allows changing the court’s size, which has fluctuated several times, from as few as five and as many as ten, although no change in size has been made since 1869. Biden’s preference is to wait-and-see whether the court’s decisions will in fact be arch-conservative before taking so drastic a step, if indeed the votes to do so could be found.

But there is another idea we’d propose that, if it has occurred to the commission, has not been reported. The Supreme Court is expected to hear from 100 to 150 appeals a year out of some 7,000 it is asked to review, but in recent years it has heard far fewer, averaging 77 between 2007 and 2018 and issuing opinions in only 67 during its 2020-2021 term. Aside from moving too slowly, the court is not big enough.

What if it were to adopt the appellate court model? The 13 circuit courts of appeal have close to 14 judges on average (the Ninth Circuit on the West Coast has 29). Panels of three judges, chosen at random, hear and decide almost all cases. If a dispute arises, the full court reviews a case — en banc is the term. In an adapted form, the Supreme Court might make, say, seven judges chosen at random from an expanded court be the standard size to hear each case, three being too few for the gravity of its final decisions, and en banc hearings straightaway for the biggest cases such as Mississippi’s abortion law.

representation

Added to the Catholic asymmetry, there are democratic questions over the court’s legitimacy, at least for those who ponder where democracy is headed. The body politic may have no hope anymore for appointees to the court to be even-minded centrists who judge on the merits of cases rather than advancing their ideology, but the citizenry at least would wish for a playing field not slanted downhill against the winning side. Yet, for the first time in history, a president who lost the popular vote got to choose a Supreme Court justice. Not just one, but three — Gorsuch, Kavanaugh, and Barrett. And further, they were confirmed by senators who were elected by fewer votes than the number of votes that elected senators who were against the nominees. Kevin McMahon of Trinity College tallied that the 54 senators who voted to approve Gorsuch, for example, were elected with 54 million votes, whereas senators who opposed Gorsuch had won 73 million votes, a decidedly lopsided minority-majority skew of who gets to call the shots. The same was true for the vote counts of senators for and against Kavanaugh, Barrett and even Thomas and Alito. It is not untoward for the public to ask “what’s going on here?” and believe the fix is in.

And, of course, we witnessed Mitch McConnell sandbag Merrick Garland for almost an entire year on the grounds that a president should not get to choose a Supreme Court Justice in his final year in office, a rule found nowhere in the Constitution, and then ramming through Barrett just before an election that could, and did, prove to be a president’s last year in office. It is reasonable to assume that the “Advice and Consent of the Senate” that the Constitution calls for is meant to be provided promptly, but McConnell complied neither promptly nor at all, so one wonders why the Democratic Party did not sue for this violation of the nation’s founding document the moment it became apparent.

life tenure

Exasperated by justices hanging on into their 80s — unto their death for Antonin Scalia and Ruth Bader Ginsburg — perhaps long out of touch with society and its changes, the public readily backs term limits. There is an undemocratic element to life tenure because it preserves on the court justices chosen decades before by presidents of an ideological view that may be well out of synch with the public’s aspirations of today. Yet another, at 83 years, is Justice Stephen Breyer, who hears calls to step down so Democrats can install a young replacement while they control the Senate, but says he will retire on his own terms and that the decision “has many complex parts to it”, a complexity unapparent to all other than himself.

In a Reuters/Ipsos poll in April of this year, 63% were for a limit versus 22% against. Most often proposed is an 18-year limit with one justice rotated out every two years, thus given a president two choices during a four-year term. An added benefit: It would get rid of the ploy of presidents picking young justices for no reason other than to leave their imprint on the court for extra decades.

good luck

Of course none of the proposed changes will happen because nothing changes in America. As with so much else that leaves the country in stasis, agreement could never be reached, but it does make for interesting conversation.

There’s No Oversight of the Supreme Court

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Judicial scholars are skeptical of several of the Supreme Court’s practices. The court goes its own way, subject to no check and balance, and certain of its actions raise ethical questions. Unlike all other courts, the high court is uniquely free of oversight and does not even have a self-governing code of ethics much less a code imposed from without, as by Congress.

At the level below, federal courts must handle all cases appealed to them. Not so the Supreme Court, which alone chooses the cases it will hear. That was not always true. For the first 100-or-so years, the court had to review every case appealed to it. That would be hugely impractical in a United States orders of magnitude larger. But in some of the cases it does hear, the court is accused of going beyond their parameters, most consequentially in Citizens United v. Federal Election Commission in which the justices called for the re-argument of a case — whether a corporate-funded political movie could be aired close to the 2008 primary elections — in order to expand its decision to apply to corporate and union spending on all elections.

A significant criticism of the certiorari process by which the court picks its cases is that the justices drop hints of cases they would like to hear. Chief Justice Roberts angered conservatives for voting to strike down a Louisiana abortion regulation; consistency demanded deciding the same as the court had done four years earlier in a nearly identical Texas case. But in saying that he thought the Texas case was “wrongly decided”, Roberts virtually invited a different abortion petition.

Justice Samuel Alito has made something of a habit of signaling issues he’d like to review. An opponent of union dues, he went beyond a dispute involving only notice of a union’s special fee to voice his opinion that opting out of union dues was a first amendment right, whereupon three cases appeared that led to the court’s 5-4 decision that dealt a blow to unions’ ability to collect dues.

This year, after the court declined to hear — with no opinion as it does thousands of cases each year — a challenge to a precedent set 44 years ago, Alito allied with Justice Neil Gorsuch in writing dissents. The original case denied an employee’s request not to work on the Sabbath. Alito’s dissent said of the 1977 case that “the only mistake here is of the court’s own making” and “it is past time for the court to correct it”. The dissents were a tactic to publicly invite a case that would attract the votes of four justices needed for acceptance. Alito is a determined advocate of religious prerogative. Last November he told a conservative legal group that liberals pose a growing threat to religious liberty and free speech. How are his semaphores that say “bring me a case” not judicial activism?

In a New York Times opinion article, Yale Law student Melody Wang argued that to be rid of this practice, the court should not pick its cases, and suggested that randomly selected panels of appellate judges take this role, “taking the Supreme Couirt out of the driver’s seat”.

in the shadows

The Texas abortion law and the court’s late night decision to let it stand shined a bright light on the “shadow docket”, awakening the public to a practice of which it was unaware. When asked to deal with an emergency, the court can need to issue a decision with immediacy, with no time for writing opinions. We therefore are not apprised of their reasoning, whereas in the normal order of business formal explication of its reasoning is fundamental to judging.

The problem is that the court has come to run cases through its shadow docket with increased frequency. The Trump administration filed 36 emergency application with the court. In contrast the administrations of George W. Bush and Barack Obama issued just eight over their 16 years. The Wall Street Journal explains away Trump’s heavy use of emergency applications as asking the high court to lift lower court injunctions that blocked his policies. Issuing its decrees without explaining why — sometime later if the moment doesn’t permit — leaves the government, business, the public to view such decisions as arbitrary and abusive by the justices of their power. As Adam Serwer of The Atlantic wrote, “Five conservative justices invalidated the constitutional right to an abortion simply because they could”.

This is the court not tending to its legitimacy. In reaction they’ve become defensive. Justice Alito in a speech at Notre Dame said criticism of the court’s shadow docket actions is an attempt to intimidate the court. Justice Barrett, who insists she and her high court colleagues aren’t “a bunch of partisan hacks”, did so speaking at an institute that bears Mitch McConnell’s name, he who had rushed her confirmation through the Senate. Justice Thomas cautioned against “destroying our institutions because they don’t give us what we want when we want it.”

A test of that comes December 1 when the court will hear a challenge to Mississippi’s law that bans abortions after fifteen weeks of pregnancy. Averaging recent polls, two-thirds of Americans want abortion to remain legal, but it is widely expected the the court will go against the people, possibly even overturning the precedent of constitutionally approved Roe v. Wade. If so, it is unavoidable that the legitimacy issue will arise, with a sizeable percentage of of Americans thinking the justices are just voting their religion again, five of the conservative justices being Catholic and the sixth a Protestant, but educated in Catholic schools.