There are two big lessons from the $900 billion Covid relief package just approved by Congress. The first is that, despite everything, big bipartisan deals are possible when they amount to handing out goodies rather than forcing each side to accept something they don’t want. The second is that goodies alone are not enough. Skillful legislating is still required.
First, it’s worth taking a moment to appreciate the enormity of this accomplishment. Congress passed the second-largest stimulus ever, in the famously unproductive lame-duck period, amid a period of dangerously intense partisanship, just as control of the White House is about to pass from one party to another, in the aftermath of the most controversial presidential election in memory.
None of this has prevented the two parties from coming to a deal that both avoids a government shutdown and provides real relief. Nor is this bill the last word. Senate Majority Leader Mitch McConnell has been frank that he expects a new deal with the administration of President-elect Joe Biden. His current willingness to forego his primary objective — a Covid liability shield for businesses — attests to the seriousness of his commitment.
How is this possible in the same institution, Congress, that stumbled from crisis to crisis just more than a decade ago? Part of it is the nature of a pandemic, which raises the stakes for failure. It’s common to cast political actors’ decisions in terms of partisan and electoral advantage. But they have a universal human concern about the damage that Covid can do the health and wellbeing of their fellow citizens.
Just as important, however, is the transactional approach that McConnell, President Donald Trump and now Biden bring to negotiations. Rather than ideological purity, they’re interested in something that can pass. For example, during negotiations most parties agreed that unemployment assistance was preferable to Covid stimulus checks. But when a few senators disagreed and wouldn’t budge, negotiators included checks.
If crucial players continue this approach into next year, then the US can look forward to a series of big pro-growth deals that trade tax cuts that Republicans support for investments in green energy that Democrats want.
Yes, these types of deals will increase the deficit. But that need not be a concern right now. Far more important is to ensure that the recovery is rapid and that the US returns to a tight labor market as soon as possible.
The more serious concern may be the constraints of ideology, which are visible in the current deal. The bill could have included a provision for stimulus checks of $1,200 instead of $600, which had bipartisan support, along with robust unemployment insurance. It could also have included money for the aid to state and local governments that Democrats wanted in exchange for the liability shield supported by McConnell.
The bill included none of this because there was an arbitrary ceiling on its cost. Before the election, Republicans’ Covid relief plan amounted to about $500 billion. As negotiations restarted after the election, they were reluctant to consider something much larger than $900 billion, which was almost double their previous position. Exceeding that limit would have risked blowing up delicate negotiations.
These types of pitfalls, rather than serious policy disagreements, are most likely to stand in the way of big legislation in 2021. Idiosyncratic attachment to particular numbers or frameworks will prevent legislative dealmaking. The key will be for leaders to recognize when negotiations have gone as far as they can, take the win, and leave the rest for later.
Admittedly, that won’t be easy with the intense distraction of partisan politics. Yet the present deal — made amid what one side calls a stolen election and the other an attempted coup — shows that, with the right kind of leadership, such progress is not only possible but worth fighting for.
Bloomberg
