Democrats stop playing fiscal-restraint politics

Follow Us Get the newsletter Get Jonathan Bernstein's newsletter every morning in your inbox. Click here to subscribe. President-elect Joe Biden rolled out his first big legislative priority in a Thursday night speech: A $1.9 trillion virus-fighting and economic bailout package. The first thing to say is that Biden's speech drove the final nail into the coffin of mainstream liberal attempts to make Democrats the party of fiscal restraint, efforts that began in earnest after Republicans adopted big-deficit policies at the beginning of Ronald Reagan's presidency in 1981. For almost 40 years, Democrats tried and failed to convince journalists and pundits that they were the party that cared about federal budget deficits. Over the same period, Democrats occasionally sought credit from voters for lowering (and even, when Bill Clinton was president in the 1990s, erasing) deficits. To be sure, Democrats were still Keynesians, favoring expanded deficits during hard times. But they also came to believe in paying for new spending even when that meant supporting higher taxes when they thought increased revenues were needed. As recently as Barack Obama's presidency, they tried to rein in deficits when they got high. That seems over. Congressional Democrats in 2020 spent freely (and tried to spend even more) to fight the coronavirus pandemic and rescue the economy. New rules in the House of Representatives de-emphasize the costs of new programs. Biden not only asked for a large bill only a few weeks after Congress passed a $900 billion round of virus-relief spending, but took on the argument head-on, saying that economists supported larger deficits right now. I don't think that Democrats will flip all the way to simply ignoring deficits, and some moderate Democrats may split with mainstream liberals over fiscal policy as time goes on, but it really does sound like the center of the party has moved. The other thing to say about Biden's rollout was just how professional it was. The speech wasn't particularly memorable or well-delivered in my view, but it was solidly constructed and won't give the fact-checkers much to do. Nor was it undermined by nonsensical ad-libs. Oh, and Biden does know how to use a teleprompter. His staff also knows how to build (and demonstrate) support, as NBC News correspondent Garrett Haake noted in this tweet Thursday night: "My inbox and Twitter timeline are flooded with statements from Democrats (and even the Chamber of Commerce) in support of the Biden COVID rescue plan. I had almost forgotten what a coordinated policy rollout looks like." That doesn't guarantee it will wind up passing. The Biden team is apparently hoping to treat the relief legislation as a regular bill, which means that it will need to get through the narrow Democratic majority in the House and then find 60 votes to defeat a Senate filibuster in a chamber where each party will have 50 members. And while there are some items that will appeal to many Republican senators, and others they will be reluctant to vote against, a deal requiring at least 10 Republicans to sign on seems unlikely. Unless that's wrong, Democrats will either have to eliminate the legislative filibuster, or accept only what they could get under the current rules governing the "reconciliation" procedure that can avoid a filibuster — or loosen those reconciliation rules. It's possible that moderate Democrats might be willing to support Senate rules changes to pass funding for vaccination and other emergency health-care needs, and for some economic relief. But they almost certainly would demand that some liberal priorities in Biden's plan be dropped. Biden and his team — and for that matter, both House and Senate Democratic leaders — are experienced deal-makers. For the most part, the coronavirus package is built for negotiations; it's relatively easy to bargain over financing levels as long as both sides want eventual passage. But whether a sufficient number of senators will really want a deal? That's hard to know at this point. 1. Davin L. Phoenix at the Monkey Cage on anger and race. 2. Reid Wilson talks to Biden's Chief of Staff Ron Klain about how the administration intends to get to work. A must-read. Key fact: Klain says that Biden will have more people in the agencies (political appointees who don't need Senate confirmation) from Day 1 than Obama had after 100 days. Obama was bad about filling vacancies. President Donald Trump was terrible. Biden, it seems, might be be good at it. We'll see. 3. Jonathan Cohn on the vaccine rollout. 4. Katlyn Marie Carter at Made By History revisits the Sedition Act of 1798. 5. Bloomberg's Joshua Green on Liz Cheney's vote for impeachment. 6. My Bloomberg Opinion colleague Elisa Martinuzzi on Deutsche Bank AG and Trump. 7. And Peter Jamison, Carol D. Leonnig and Paul Schwartzman have the epic story about why the Secret Service has been renting toilets in Kalorama. Get Early Returns every morning in your inbox. Click here to subscribe. Also subscribe to Bloomberg All Access and get much, much more. You'll receive our unmatched global news coverage and two in-depth daily newsletters, the Bloomberg Open and the Bloomberg Close. You received this message because you are subscribed to Bloomberg's Early Returns newsletter. Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022