Republicans Say Biden Wants Bipartisan Stimulus, Schumer Says Nope

This is my update for Wednesday, February 3rd. Senate Democrats voted yesterday to start debate on the budget resolution that will cover COVID-19 aid and begin the reconciliation process.

Unsurprisingly, this was a 50-49 vote on party lines with Republican Senator Pat Toomey not present due to a snow delay, and it wouldn’t be surprising to see more of those over the next few weeks. The resolution will be debated for as many as 50 hours, and all 100 Senators will have the option to propose amendments during that time. At that point, they’ll vote on the resolution as well as any amendments, which will start the 20-hour debate over reconciliation leading up to another set of votes on various amendments. As I mentioned in yesterday’s update, each of those amendments will have to be voted on separately, so just because they had 50 votes to start the debate doesn’t mean that they’ll get 50 votes on every single provision. And the Democrats need every single Senator in the party in order to secure a simple majority, so moderates like Joe Manchin and Kyrsten Sinema will have a lot of leverage here if they want to push back on anything they think is unnecessary. Manchin already stated that he wants a targeted stimulus and that he opposes the $15 federal minimum wage, so he may end up being the greatest obstacle for Democrats who want to pass something like Biden’s $1.9 trillion relief plan. Of course, the Senate will also be running the impeachment trial over the next few weeks, so it could take them a month or six weeks to get through reconciliation.  Both Republicans and some moderate Democrats have talked about the price tag of the relief proposal, particularly after another stimulus bill was passed at the end of 2020. In response to those concerns, over 100 Democratic members of the Senate and the House of Representatives sent a letter to Pelosi and Schumer asking them to repeal certain tax breaks for net operating losses, which were included in the original stimulus that was passed early in 2020. They estimate that this would save $250 billion, which could then cover some of the costs of Biden’s relief bill. In essence, those tax breaks enabled businesses to carry back losses into tax returns from up to five years ago. They also remove limits on how much losses can be used to offset gains, making it easier for companies to minimize their taxable income. Republicans argue that this is all necessary for cash flow, while Democrats see it as an unnecessary kickback for the rich. This isn’t something that has picked up much momentum, at least so far, but it could be one way for Democrats to get people onboard with a more expensive stimulus plan.  One narrative that’s been picking up over the last few days is the idea that Biden is more interested in a bipartisan deal than some of his Democratic counterparts in the House and Senate. Biden obviously campaigned on the theme of unity, coming together and all that, he doesn’t want this to become a partisan issue, but he is also facing pressure from other party leaders. Rob Portman, one of the ten Republican Senators who met with Biden on Monday, told the media “my sense is the president would be more forward-leaning working with both sides, but there are pressures up here on the Hill, including Schumer and Pelosi seem less interested. It’s hard to read his staff, but they didn’t seem all that interested in finding common ground.” McConnell gave a similar statement, he said “our members who were in the meeting felt that the president seemed to be more interested in [a bipartisan agreement] than his staff did, or it seems like the Democratic leadership in the House and the Senate.”  Now that is probably partly about positioning, obviously it’s going to be good for Republicans if they can disrupt the Democrats by putting distance between the White House and the party leaders in Congress, so we’ll see in the next few weeks and months how committed Biden really is to bipartisanship versus passing something like the $1.9 trillion plan he outlined earlier in January. And there are some contradictory reports here, some of the Republicans are saying that Biden wants something Republicans would agree to, but Chuck Schumer came away with the opposite impression. According to Schumer, Biden “spoke about the need for Congress to respond boldly and quickly” and told the Republicans that their proposal was “way too small.” Now, Biden’s popularity has been holding steady at around 53-55% approval against 35-37% disapproval, so he may have enough support from the public to push his bill through and worry about bipartisanship later. Presidents often reach their highest popularity early on, Obama, W. Bush, Reagan, Carter, Ford, LBJ, and Kennedy all hit their peaks in the first year of their respective administrations, so this could be the chance to capitalize on that and leverage his political position into a more robust relief bill.  One of the main sticking points in these negotiations has been the income limits for stimulus checks, and it was reported earlier today that Biden told the House Democratic Caucus he would consider compromising on those if it helped them get support for the upcoming relief bill. So the first two rounds of payments went out to people who were earning $75,000 or less per year, or $150,000 for joint filers, and they gradually tapered off for people who were making more than that.  Some Senate Republicans countered by proposing a reduction to $40,000 or $80,000 for joint filers, with the phase-out going up to $50,000 or $100,000. Based on what we’ve heard so far, it’s looking more and more like this could be one area where Biden and other Democrats are willing to move from their initial target. On the other hand, as we said yesterday, Biden appears to be pretty firm on the size of the payments, which are set to be $1,400, adding up to $2,000 when you include the $600 checks that went out over the last month or so. He is planning to meet with a group of Senate Democrats on this issue later today, so there may be another update tomorrow depending on what comes out of that meeting.  In other Senate news, last story for today, Chuck Schumer and Mitch McConell just announced that they’ve come to an agreement on power sharing. Those negotiations were a little complicated with a 50/50 split, McConnell wanted to get some concessions out of that situation, and obviously Schumer wanted it to look like any other Senate with a clear majority and minority. This will put Democrats in charge of Senate committees, which had still been run by Republicans up to this point. McConnell originally wanted Schumer to formally agree to preserve the filibuster, but he backed off after Sinema and Manchin, two of the more moderate Democratic Senators, said that they would push back against any attempt to remove the 60-vote threshold. So this power sharing deal will allow Democrats to start taking control of the Senate agenda, they’ll be able to vote to confirm Merrick Garland as Attorney General and take some steps toward the rest of their priorities for the first 100 days of the Biden administration. But again it doesn’t look like they’ll be getting rid of the filibuster, which means that they will need to get 10 Republicans onboard to pass most legislation apart from reconciliation of course. That’s all I have for you today, thanks for watching to the end, and I’ll see you next time, buh bye.


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