JustOneMinute

Go, Go, Sleepy Joe!

Let's give Joe Biden credit - he's got the trains running on time. They keep crashing into each other, but at least the train wrecks have a now-familiar script.

Dems limp out of another stumble-ending month

It's a nightmare on Capitol Hill for the president's party, as October passes by without a deal.

House liberals left the Capitol triumphant on Thursday night after once again scuttling a major vote. Every other Democrat was fuming.

For the second time in less than a month, Speaker Nancy Pelosi and her leadership team had to delay a vote on Senate-passed infrastructure bill amid progressive opposition, denying President Joe Biden a much-need win as Democrats’ bigger, $1.75 trillion social spending plan also remains in limbo.

“I think it’s wholly apparent that today was not a success,” said Virginia Rep. Abigail Spanberger, whose state has a high-stakes gubernatorial showdown Tuesday that Democrats were hoping to boost with the infrastructure vote.

Ms. Spanberger came to national attention in the aftermath of the 2020 election, when she promised to draw on her CIA background to hunt down and choke out the next Dem to say "Defund the police".

Hmm. My memory may be engaging in hyperbole. But not by much!

BREAKING BAD: This "Let's Go Brandon" story gives me hope for the future of American politics.

Nothing As Powerful As An Idea Whose Time Has Come

There's nothing as powerful as an idea whose tie has come, and that idea may be Sen. Wyden's plan to end the deferral of taxes on capital gains. And this tax is targeted like a laser-guided missile to hit the uber-rich:

Democrats move to finalize new ‘billionaire’ tax proposal, targeting 700 wealthiest Americans as key source of revenue for spending plan

Senior Democrats are preparing a sweeping new tax plan that would aim to raise hundreds of billions of dollars from the fortunes of America’s roughly 700 billionaires, an abrupt shift in the party’s approach to funding a large expansion of the safety net.

...

Democrats had largely united behind increasing taxes on those earning more than roughly $500,000 per year, while also raising the corporate tax rate paid by large firms. That approach was consistent with President Biden’s insistence that Americans earning less than $400,000 per year be spared any tax hikes, a pledge the administration considers necessary to protect the political popularity of any new taxes.

The new path under consideration represents an even starker attempt to narrowly tailor tax increases to avoid political blowback. It would shield not only the lower and middle classes but also exempt the bulk of the top 1 percent — concentrating the higher rates instead on the wealthiest 0.0002 percent.

Let be pause here to nit-pick: the plan may not involve higher tax rates. It may be as 'simple' as expanding the definition of income to include unrealized capital gains. (Raising the cap gains rate may also be part of the plan, of course.) Pressing on:

Currently, wealthy Americans do not have to pay taxes on vast accumulations of wealth because they are taxed only once an asset is sold. Billionaires often borrow against their non-taxed assets, allowing them to spend enormous sums of money while effectively paying very low taxes relative to their income and worth.

Under the “Billionaire Income Tax” proposal, a summary of which was obtained by The Washington Post, the federal government would require billionaires to pay taxes on the increased value of assets such as stocks on an annual basis, regardless of whether they sell those assets. Billionaires would also be able to take deductions for any annual loss invalue of those assets.

The plan would also set up a system for taxing assets that are not easily tradable, such as real estate. The tax would apply to billionaires and people earning more than $100 million in income three years in a row.

Hmm. This actually seems like a huge flock of sheep and a couple of wolves voting on what's for dinner.

Well. Time for a bit of gloating since I was calling for a tax on unrealized capital gains quite a while ago. So was Sen. Wyden, and between the two of us we're making progress.

 

Sen. Manchin With One Foot Out The Door

It's now or later - the always interesting and sometimes reliable David Corn reports that Sen. Manchin aired a plan to ease on out of the Democratic Party. The current point is to pressure Biden, Pelosi and Schumer on the package formerly known as the $6 trillion social infrastructure bill. Manchin wants to to cap it at $1.75 trillion and apparently expressed major philosophical differences with his party:

Manchin has repeatedly said he has a significant philosophical difference with most of his fellow Democrats. He has told reporters that he believes major programs in the Build Back Better bill would move the United States toward an “entitlement mentality” and that he cannot accept that. In a recent meeting with Biden, Manchin told the president that he sees government as a partner with the public not the ultimate provider, according to people who heard the senator’s account of the conversation. He explained to the president that in his view Biden didn’t win the presidency last year by championing progressive proposals, and he pressed the president to recall his campaign promise to bring people together. He also reminded Biden that he has vowed not to support any package unless it contains the Hyde Amendment, which bans the use of federal funds to pay for abortions, except in cases of incest or when the life of the mother is at risk.

Left up in the air is whether Independent Joe would caucus with the Dems and leave Sen. Schumer as Majority Leader (for now) or swing a deal with Cocaine Mitch and join the Republicans. Time will tell but let me note this - Manchin will get a better deal with Mitch now then he will after Nov 2022 if the Republicans win back the Senate without him.

As to what will be won by whom come Nov 2022, we are in or around coin-toss territory. But there is a lot of time left, obviously.

Old King Coal

Sen. Joe Manchin puts the kibosh on Biden's clean energy plan:

Key to Biden’s Climate Agenda Likely to Be Cut Because of Manchin Opposition

The West Virginia Democrat told the White House he is firmly against a clean electricity program that is the muscle behind the president’s plan to battle climate change.

The WaPo flagged this a few days back. Manchin's objection seems a bit vague:

Manchin had a frank conversation with White House aides late last week where he said he couldn't support the CEPP in its current form, according to two of the people close to the negotiations, who spoke on the condition of anonymity to describe the private discussions.

The centrist coal-state senator "doesn't see a formulation that could get past his concerns with regard to rewarding utilities for behavior they're already taking," one person said, "and he pretty much conveyed that."

Its not clear where Biden and his crack leadership team are headed with this. But the Times piece concludes with some LOL wish-casting:

It is also possible that Democrats may try to push through the clean electricity program as a stand-alone bill — but the timeline for doing so is narrowing, with the 2022 midterm elections approaching.

Sure. There ought to be plenty of eager Republican votes for this in the Senate.

The Emerging Democrat Debacle

Ezra Klein on David Shor and why the Dems face a looming disaster in the House and Senate. Writing in Politico, Ian Ward also covers the David Shor phenomenon. After describing the eternal Dem enthusiasm for youthful idealists, he notes this:

At its most basic, Shor’s theory goes something like this: Although young people as a whole turn out to vote at a lower rate than the general population, the aforementioned type of young person is actually overrepresented within the core of the Democratic Party’s infrastructure. According to Shor, the problem with this permanent class of young staffers is that they tend to hold views that are both more liberal and more ideologically motivated than the views of the coveted median voter, and yet they yield a significant amount of influence over the party’s messaging and policy decisions. As a result, Democrats end up spending a lot of time talking about issues that matter to college-educated liberals but not to the multiracial bloc of moderate voters that the party needs to win over to secure governing majorities in Washington. 

I'd guess this 'college kids versus the rest of us' dynamic began to divide the Democratic Party in the 'hippies versus hard hats' clashes of the Vietnam War era. The decline of private sector unions and the drift of the working class to Republicans (made famous by the Reagan Republicans) has tilted the balance towards the College kids. Emmet Rensin described the Democrats as the Party of Smug back in 2016, although Conor Friedersdorf observed that Republicans could contest the mantle. (Stewart and Colbert vs. Limbaugh and O'Reilly?).

In a similar vein Matt Yglesias recently exhorted his fellow Dems to give an occasional nod to reality:

The median voter is a 50-something white person who didn't go to college

Cognitive behavioral therapy for Democrats

Its a bitter pill.

Nuke The Debt Ceiling!

Joe Biden gets on board with an idea whose time is coming - use the Senate 'nuclear option' to put debt ceiling legislation beyond the filibuster. Both parties have done this with judges and Cocaine Mitch says he is fine with raising the debt ceiling as long as there are no Republican votes backing it.

Prior to the crushing defeats in the Georgia Senate run-offs that gave Sen. Schumer 50 votes in the Senate, Republicans warned that in such a scenario Democrats would end the filibuster entirely and squeeze through bills on DC statehood and an expanded Supreme Court with 50 votes plus VP Harris. Sen. Manchin has rejected that concept but he was apparently silent on nuking the filibuster:

Senate Democrats discussed carving out the exception at their weekly lunch on Tuesday. No conclusions were reached, but notably, according to participants, the two strongest opponents of filibuster changes, Senators Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona, did not speak up in protest. They also did not speak up in support.

This debt ceiling stand-off will be resolved with a gimmicky trick play. My current guess ranks the nuclear option at Number One because it is quick and no more politically painful than reconciliation. Reconciliation is my second guess - its cumbersome and uses a scarce resource since per the current Senate "rules" (LOL) the Dems can only use it twice per session. (Their current plan is to use their second Reconciliation Card on the shrinking $3.5 trillion Social Justice and More bill, but they may do that next January in a new session.)

My third choice is a gadget play to be named later. The fourth choice last gasp is the Trillion Dollar Platinum coin. I don't think the coin is "legal" within the spirit of the law but in the current environment the real question is, can Treasury and Fed lawyers agree its 'legal enough', given the dire alternatives? As a recent example of this mentality, Biden extended the CDC eviction moratorium knowing the courts would eventually shoot it down (The Supreme Court did so, three weeks later.)

As to the platinum coin, I agree with this from Krugman:

Would any of these approaches basically mean using silly gimmicks to avoid catastrophe? Possibly yes. But given the stakes, who cares if the approach sounds silly?

Would using any of these gimmicks involve violating the spirit of the law even if they technically obey the letter? Of course — but Republicans are already doing that through their abuse of the debt ceiling.

Would any attempt to do an end run around the debt ceiling face court challenges? Yes. But the legal process would at the very least buy time to devise a better solution.

Well, yes - the trillion dollar coin is a terrible idea (per SecTreas Yellen!) but maybe not compared to the other terrible ideas on the menu. As to legal challenges, there is a real question about just who might have standing to sue if a coin were issued.

We should find out soon enough. My money is on nukes.

ERRATA: Rohan Grey, a young progressive professor, has a solid piece on the legal background to a platinum coin. We chatted on Twitter and I came away agreeing that the coin is legal enough that Federal Reserve lawyers could make a political decision to go either way. On the one had, I'd say that accepting the coin calls into question their independence. OTOH, rejecting it puts them in the role of refereeing a partisan Executive-Legislative showdown during a bond market meltdown. Both paths are perilous.

 

Clash Of Titans

Brady v. Belichick! And by the time their Sunday night game begins MLB should have settled the AL wild card races and the NL West title.