My first thought after seeing the news about October’s inflation bombshell was that it couldn’t have come at a worse time for Democrats.
Which isn’t true, upon reflection. Having that news break the day before Virginia and New Jersey voted last week would have been worse for them, right? That could have been the final nudge to put the GOP over the top in NJ.
But today’s timing is almost as bad now that the bipartisan infrastructure bill has passed and the reconciliation package coveted by progressives is in limbo, awaiting a score from CBO and a verdict from the Decider, Joe Manchin. Manchin’s leverage over the process was maximized last Friday when the roads-and-bridges bill cleared the lower chamber (with help from centrist Republicans) since that freed him to quit reconciliation entirely if he so chooses. He’d infuriate progressives by doing so, but so what? What are they going to do, primary him in West Virginia?
This tweet appeared shortly after the inflation news broke this morning, no doubt sending a shiver down the spines of House lefties. Is this it? Endgame for reconciliation?
By all accounts, the threat posed by record inflation to the American people is not “transitory” and is instead getting worse. From the grocery store to the gas pump, Americans know the inflation tax is real and DC can no longer ignore the economic pain Americans feel every day.
— Senator Joe Manchin (@Sen_JoeManchin) November 10, 2021
That’s not Manchin being opportunistic, latching onto a convenient excuse to slow the reconciliation process down. He raised inflation as a concern with Build Back Better more than two months ago, when public anxiety about rising prices and supply-chain disruption weren’t as high. The White House assured Americans at the time that any inflation was “transitory.” Manchin wasn’t as dismissive, per his op-ed of September 2:
An overheating economy has imposed a costly “inflation tax” on every middle- and working-class American. At $28.7 trillion and growing, the nation’s debt has reached record levels. Over the past 18 months, we’ve spent more than $5 trillion responding to the coronavirus pandemic. Now Democratic congressional leaders propose to pass the largest single spending bill in history with no regard to rising inflation, crippling debt or the inevitability of future crises. Ignoring the fiscal consequences of our policy choices will create a disastrous future for the next generation of Americans…
Instead of rushing to spend trillions on new government programs and additional stimulus funding, Congress should hit a strategic pause on the budget-reconciliation legislation. A pause is warranted because it will provide more clarity on the trajectory of the pandemic, and it will allow us to determine whether inflation is transitory or not. While some have suggested this reconciliation legislation must be passed now, I believe that making budgetary decisions under artificial political deadlines never leads to good policy or sound decisions. I have always said if I can’t explain it, I can’t vote for it, and I can’t explain why my Democratic colleagues are rushing to spend $3.5 trillion.
Since then, progressives have cut their demands in half, agreeing to Biden’s reconciliation framework of $1.75 trillion. Does the tweet up top sound like it was written by a guy who’s about to sign off on another $1.75 trillion in spending, though?
In fact, forget Manchin. Are the House centrists currently blocking the reconciliation bill until there’s a CBO score still going to keep their pledge to support it if it’s deficit-neutral? If you were a Dem representing a swing district and were up for reelection in a pro-Republican environment, how eager would you be to rubber-stamp another $1.75 trillion at a moment when voters’ anxiety about inflation is soaring? Especially if you knew that your vote ultimately wouldn’t matter, since the House reconciliation bill is dead on arrival once it reaches the Senate.
We may be headed for a Democratic meltdown in the House as lefties demand that the moderates keep up their end of the infrastructure bargain by voting for Build Back Better and the moderates balk, reasoning that it’s insane to make them walk the plank on a symbolic vote in favor of a mountain of new spending amid a public freakout over rising prices.
Biden is sufficiently worried about the inflation news tanking Build Back Better that he put out a statement this morning trying to head off the argument that it’s time to change course:
“We need to spend trillions more to reduce inflation” is an … interesting perspective, one that’ll be popular with Biden’s progressive base and no one else. If we take his advice and the newly passed spending package doesn’t ease inflation, I assume the left’s recommendation will be to pass a few trillion more on top of that and see if that does it. I wonder, though, if Sleepy Joe is privately hoping that the Manchin blocks the reconciliation bill, sparing him and his party the consequences from further upward pressure on prices. Publicly, Biden has no choice but to keep pushing Build Back Better. But if Manchin can slam on the brakes for him, taking the brunt of the left’s anger for the bill’s failure in the process, that’s a win. They can always come back to it next year, if and when inflation has eased.
After all, Congress is well-known for passing risky, hugely expensive legislation in the months before a contentious election, isn’t it?
I assume we’ll hear arguments in the coming days that while it’s true that inflation is beginning to bite and it’s also true that it’s no longer “transitory,” it’s a global problem. Pandemic-related supply-chain problems and COVID relief packages are pushing prices up across the western world. Can’t blame Biden for that! But this graph is circulating today, evidence that while pandemic inflation may be a global problem, it’s hitting one country particularly hard:
Inflation has picked up in many countries as the global economy restarts after the pandemic. 9/ pic.twitter.com/v60iZ1vbi5
— Council of Economic Advisers (@WhiteHouseCEA) November 10, 2021
While Americans ruminate on that and cope with rising gas prices, their secretary of transportation is saying stuff like this:
Transportation Secretary Pete Buttigieg repeatedly claims the shortage of affordable child care main culprit for supply chain issues and employer shortages, in interview on MSNBC’s “Morning Joe”.
— Josh Kraushaar (@HotlineJosh) November 10, 2021
Helping parents with child care would free up some of them to get back to work (as would keeping schools open instead of sending kids home en masse to quarantine every time a five-year-old tests positive for COVID, which is less of a priority for Democrats), but read this NYT piece on what’s driving the supply-chain problem. More than anything, it’s a shortage of truckers. And the problem for truckers has less to do with finding someone to watch their kids than with the lifestyle associated with being on the road and away from home, isolated, for weeks on end. Trucking companies are having to pay more to attract drivers, which means they’re charging more, which means inflation for consumers. I don’t know how that problem gets fixed but there are no silver bullets in BBB for it.
Exit question: Will the White House’s next move for solving the supply-chain problem involve trying to expand immigration? I’m excited to see how Dem centrists process that one with a red wave looming next fall.