In many retellings, the financial crisis of 2008 played out over the course of a few short weeks, culminating in the passage of a large, bipartisan bailout for Wall Street, just before the 2008 election. That all did happen, of course, but the full story transpired over months and months, and was marked by ideological fanatics in the Bush administration exacerbating the crisis, then running to Democrats on Capitol Hill for help cleaning up their messes. This included the bailout, but also the largely forgotten Economic Stimulus Act of 2008, which provided nearly all lower- and middle-income people in the country $300 a piece.
The speaker of the House at the time was Nancy Pelosi and amid those extraordinary circumstances, it would have been politically shrewd but morally abhorrent for her to let the Republican administration drown and drag the country down with it. At that point in history, there was even a political logic to drafting rescue legislation in conjunction with an administration of the opposing party, sacrificing optimal policies to spread accountability evenly across the government, and to be able to move quickly.
It’s what happened next that revealed fatal flaws in this thinking.
Amid the recession, partisan control of the White House changed hands, and on inauguration night Republicans devised a plan to reclaim power through total opposition to the new president, Barack Obama. With the economy in need of yet more help, they submarined Pelosi’s paradigm of bipartisan cooperation, and made it nearly impossible for Congress to pass further stimulus. Zero House Republicans voted for the American Recovery and Reinvestment Act. Senate Republicans filibustered the legislation, and it barely became law because three of them defected—but only after cutting scores of billions of dollars from the final package. After extracting hundreds of billions in assistance from the Democratic Congress when the president was a Republican, congressional Republicans began pretending to believe that the key to economic growth was to cut spending. Their twin mantras became “where are the jobs?!” and “cut and grow!” Fractured Democrats eventually joined their unified push for austerity, and it strangled the recovery.
Twelve years later history is repeating itself, but Democrats have responded so far as if there are no lessons to learn from that horrendous experience. Amid a national economic shutdown necessitated by a global pandemic, we are staring straight down the alarming likelihood that a Democratic administration will take over a bungled coronavirus response, with unemployment back where it was when Obama came to power, only for Republicans to revert once again to blocking all stimulus, leaving Democrats unable to govern amid an ongoing crisis. There are several ways to stave this nightmare scenario off, but the key is for Democrats to recognize that a response that helps as many people as possible and a response that demands accountability from Republicans aren’t just compatible objectives, they are necessary elements of one another.
The central political lesson of the financial collapse and great recession is that in dire economic circumstances, presidents and their parties are at the mercy of Congress. Without Congress’s help, crises persist, and the public blames the person at the top of the heap. Republicans exploited this insight after Obama took office to hold the economy hostage and damage him politically. Democrats should exploit it today to wrest control of the economic recovery out of the hands of corrupt, ideologically extreme Republicans in the administration and Congress, and fight for what they believe should be done, on their own terms.
Pelosi does not seem to see things that way. It’s true that she introduced a pretty good initial plan to guarantee workers paid sick leave, bolster the unemployment insurance program, and otherwise address the immediate economic risks of a pandemic response that requires people to stay at home. Rather than pass it along party lines, though, she entered negotiations with Treasury Secretary Steve Mnuchin, and, working with him, stripped guaranteed sick leave from 80 percent of all workers to guarantee bipartisan buy-in.
There is, as there was in 2008, a theoretical logic to this approach: Exempting workers at large companies from the sick-leave guarantee shifts pressure on to those businesses to provide paid sick leave out of their own reserves (a kind of implicit corporate tax) and removes the cost of the guarantee from the federal books, creating “fiscal space” for further stimulus in forthcoming legislation. But, as in 2008, the opposition is not on the level. Having offered concessions to Republicans at a moment when they have no leverage, several Republicans have now decided to demand the paid sick leave provisions be universal, outflanking Pelosi on her left, stalling out what should have been quick passage of this initial rescue package, and leaving her to meekly rescind what she should never have placed on offer.
That’s because there was no reason to let Republicans into this process in the first place. Trump wants to be re-elected, he won’t be re-elected without an enormous legislative intervention, and left with a choice between a House Democratic bill and nothing, he will sign a House Democratic bill. That means Democrats could and should pass provisions they believe the country needs, and present it to Senate Republicans and Trump as a take-it-or-leave-it proposition. They will have every incentive to take it. Senate Republicans could try to pass their own rescue bills, forcing negotiation with the House. But the Senate’s filibuster rules would allow Democrats to block those measures, and even without the filibuster, there probably aren’t 51 Republican votes for anything commensurate to the coming crisis.
What does the country need right now? Immediate stimulus in the form of relief for workers and small businesses. Measures designed with a simple ideal in mind: When the pandemic is under control, businesses can re-open, workers can resume their jobs, and things can go back to how they were before. That means not only up-front spending, but planning for the possibility that bringing the economy back will take more time and resources than we can forecast at the moment.
What happens if Joe Biden becomes president in that stretch? We know how Republicans will respond: by trying to shut down the rescue. If Republicans lose the White House but retain control of the Senate, they will have all the power they need to destroy the incoming administration, and they will. That’s why the measures need to be written to span administrations, mandating reciprocity so that the next president can draw on them just as Trump will. Republicans have begun coming around to the idea of sending direct cash payments to most Americans, just as they did under Bush. Great! But such a provision must be written to recur automatically when unemployment climbs above, or GDP falls below, a certain level. Small businesses need extraordinary assistance? Yes, they do! But Congress should not allocate a fixed amount of money that may dry up too soon, freeing Republicans to block further aid. It should create a standing program that will be there for small businesses until the crisis is over, no matter who occupies the White House in the meantime. A group of Senate Democrats has written a plan that would send people money, and make further payments automatic—a great start, but one that will go nowhere if Democratic leadership, particularly in the House, doesn’t embrace it.
The coronavirus pandemic has already interfered with democratic processes (in the ongoing presidential primary and also in foreign elections) confronting political leaders with three options: 1) postpone elections; 2) allow elections to proceed under normal rules knowing turnout will collapse; 3) institute universal vote-by-mail policies so that all people can both vote and be responsible citizens engaged in social distancing.
Option three should be a condition of economic stimulus. In a wildly out-of-character moment on Monday, Trump staked out his opposition to postponing elections on defense-of-democracy grounds. “It’s a big thing, postponing an election,” he said. “I think to me that really goes to the heart of what we’re all about…. I hope they do it very safely, but I think postponing elections is not a very good thing.”
He was right. But he is also an untrustworthy person. And because his commitment to democracy is entirely situational, we should expect him to either reverse his position if the pandemic persists through the general election, or demand that elections proceed, but under conditions that will make a natural level of turnout impossible.
The coronavirus pandemic is by its nature a global health crisis; we are only talking about economic recovery legislation because we accept that it’d be wrong to idly allow a global health crisis to destroy people’s livelihoods as well. We should be just as committed to assuring that a global health crisis doesn’t destroy democracy. It’s worth noting at this juncture that we can’t know whether national vote-by-mail would benefit one party at the expense of another. Coronavirus is especially risky for the older people that make up Trump’s base, and it could be that making voting as easy as possible in November will actually help him relative to a situation where most people are required to vote at public polling places.
But Republicans have convinced themselves that lower turnout always benefits them, and have made suppressing turnout—so they can continue to rule without the consent of the governed—one of their party’s central policy objectives. They will never, ever allow vote-by-mail requirements to pass voluntarily, so they should be given no choice.
The final piece of this puzzle is oversight. We are confronting an economic nightmare in large part because of the Trump administration’s disgraceful early response to the threat. That in turn appears to have been driven by Trump’s desire to avoid taking any overt steps that might make the extent of the risk clear, thus spooking the stock market and harming his re-election prospects. As Trump himself admitted, he “like[d] the numbers being where they are.” That desire could have been conveyed through the bureaucracy explicitly, or, as national security writer Cheryl Rofer put it, “it could be that Trump’s strong desire to deny the epidemic affected the judgement of people like Robert Redfield, CDC director.” It beggars belief to assume the president’s repeatedly articulated objective, and the government’s simultaneous failure to make coronavirus tests widely available across the country, were completely unrelated to one another.
But however it compromised the response, it was a profound national betrayal, and exposing the truth of the matter will be a critical part not just of preventing future pandemics and holding Trump personally accountable, but of securing the health and economic safety of Americans today. The fact that Trump allowed a virus to spread across America largely undetected because he thought that would be better for him politically than confronting the threat head on needs to be widely understood. The economy can not be safe for long with someone like Trump in office, and that’s particularly true if he faces no accountability for putting himself before the good of the country. If tests had been available nationwide, and we’d been able to track the spread of the virus widely before it was basically everywhere, we would’ve had a fighting chance to “flatten the curve” without shutting down the economy, much like they’ve been able to do in South Korea and Japan.
Perhaps voters will return Trump to office despite this immense scandal, but that question should not be put to them until they know the full extent of it. Right now, polling suggests the public views Trump’s response, at best, through the lens of existing partisan sentiments. But some polls suggest Trump’s coronavirus polling actually exceeds his overall approval rating.
It’s early, the consequences of the failure have not yet fully manifested in the medical system and the economy, and there’s still time to ramp up an oversight regime. But even on the existing timeline, this represents a political failure. Trump routinely insists his response to coronavirus has been perfect; he’s begun casting blame on Democratic governors, China, Barack Obama, the media, and the very Democrats in Congress whose help he needs to avoid complete national devastation. In response Democrats have…quietly let his administration rewrite stimulus bills over which it has no leverage? It makes no sense. Remember “where are the jobs?!” Where are the tests? Where were the tests? That should be both a messaging mantra, and a starting point for an investigation that aims to determine why America was caught so flatfooted. Trump shouldn’t be allowed to bullshit his way through yet another catastrophic governing failure, and exposing the truth will deter future presidents from placing the country at risk the way Trump has again.
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