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Seeking to flex new political muscle, centrist Senate Democrats push early changes to $1.9 trillion stimulus


MARCH 5, 2021

Reporters reach out to Sen. Joe Manchin III, D-W.Va., as he arrives for votes on President Biden’s cabinet nominees, at the Capitol in Washington, Thursday, Feb. 25, 2021. Manchin, chair of the Senate Energy and Natural Resources Committee, said today he will vote in favor of New Mexico Rep. Deb Haaland to serve as interior secretary, clearing the way for likely approval of her nomination as the first Native American to head a Cabinet agency. (AP Photo/J. Scott Applewhite)

A bloc of moderate Senate Democrats successfully secured significant, last-minute changes to the $1.9 trillion coronavirus relief bill on Friday, marking an early attempt to flex their new political muscle and shape President Biden’s economic agenda on Capitol Hill.

With the Senate equally divided, the party’s moderates sought to portray themselves in the midst of the stimulus debate as a fiscally restrained counterpoint to liberals — even as they stood with Biden on the need for new emergency aid. But their tactics still threatened to open new political rifts in the party and leave perhaps millions of Americans from obtaining checks and other support they might have otherwise received.

In recent days, the moderates have narrowed federal stimulus payments, brokered a tentative deal to revamp future unemployment benefits, and halted a renewed effort to raise the federal minimum wage to $15-an-hour. The changes mark a break from the bill approved in the House, where lawmakers fought vigorously for their version of the stimulus out of a belief that the 2020 election had given them a mandate to deliver economic reforms that had flagged under now-former President Trump.

“This was sorta a loose group of senators who are basically still concerned about the deficit, concerned about expenditures, and trying to ensure if we’re going to be spending $1.9 trillion that it’s directed to the people who need the most,” said Sen. Angus King, a moderate independent from Maine who caucuses with Democrats, when asked about the strategy.

Senate revamps unemployment benefits as chamber debates stimulus

None of the alterations so far appear to have upended broad swaths of the stimulus, and centrist Democratic lawmakers have backed off some of their more dramatic proposals, particularly to scale back one-time stimulus payments even further. Unknown is whether that dynamic will change appreciably before Senate passage of the bill, expected as soon as early Saturday morning, or final adoption by Congress in the coming days.

The future of unemployment benefits in the stimulus package seemed especially in doubt by midday Friday: A deal between some centrists and Democratic leadership curbed the benefit from $400 per week to $300, but it is unclear if Sen. Joe Manchin III (D-W.Va.), a key party swing vote, will support it.

The outcome still threatens to carry lasting political significance, raising questions as to whether moderates are content to tinker at the edges — or if the debate over coronavirus aid might embolden them to act more aggressively — as Biden proceeds with a fuller agenda to upgrade infrastructure, change tax laws and rethink immigration in the months to come.

“It’s a 50-50 Senate. Everyone from Bernie Sanders to Joe Manchin III knows if they wanna blow this thing up, they can blow this thing up,” said Montana Sen. Jon Tester (D), one of the moderate members of the caucus.

Tester said obstruction is not the goal, stressing that an urgent need for coronavirus aid and other economic relief had driven Democrats to stick together. But, he acknowledged, the calculus may change for some lawmakers.

“I do anticipate that the there will be less of a honeymoon period then, so there probably will be more outspoken voices,” Tester said. “That’s the nature of the beast.”

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In a sign of their political rise, centrist-leaning Democrats at one point this week floated among other lawmakers a plan to dramatically cut the signature component of the Senate’s coronavirus stimulus bill, according to three Democratic officials who demanded anonymity to describe its contents.

The package includes a fresh round of one-time $1,400 checks for cash-strapped families, seeking to deliver on Democrats’ popular promise in the final hours of the 2020 campaign. But moderates discussed reducing the size of the benefit, limiting the number of Americans who could receive it and slashing the additional sums set aside for families with kids.

For parents, the cuts might have been significant, leaving those who had expected $1,400 per child receiving only $400 under the alternative plan. The change would have been in addition to cuts put forward publicly in the past by Manchin, who has floated cutting off the payments for individuals earning over $50,000 and joint filers earning more than $100,000.

But the early talk from the chamber’s centrist leaders quickly ran into stiff opposition among other members of the Democratic caucus, according to the three people granted anonymity to describe the discussions, the full scope of which has not been previously reported. The White House and its moderate Democratic allies instead agreed to a more narrow change to stimulus checks, meaning most Americans who received payments in December are set to obtain payments again

U.S. adds 379,000 jobs as labor market shows signs of improvement

The political dynamic on Capitol Hill reflects the simmering philosophical fissures within the Democratic Party in the aftermath of the 2020 election. Centrists and progressives each proclaimed ideological victories as Democrats captured the House, Senate and White House last November, creating a precarious political reality for Biden, who has preached a message of unity in his opening days in office.

There is no room for error now as Democrats pursue their policy agenda. For Biden, it means “the only way to get things done is to thread the needle,” said Phil Schiliro, who advised former president Barack Obama on legislative affairs and predicted that the challenge may grow in time.

“Every month that goes by in an administration, it gets closer to the midterm elections, the harder it is to do things,” he said.

Already, centrist Democrats have delivered their greatest, earliest show of force in talks over the stimulus.

The bill, a nearly $2 trillion effort, reached the Senate floor on Friday: It includes another round of one-time stimulus payments, boosts to unemployment aid and billions of dollars to help families pay for child care, assist local government in financial need and pay for the costs of coronavirus vaccine distribution. House and Senate Democrats broadly support the contours of the package, which Republicans are likely to oppose, perhaps unanimously.

Behind the scenes, though, centrist-leaning lawmakers including Manchin, Tester, and Sens. Mark R. Warner (VA) and Angus King, have sought to secure a flurry of changes in recent days during their talks with Biden and other Senate leaders.

“We were all trying to be responsible with federal dollars and be frugal, and I think there’s a strong belief in good government,” said Colorado Sen. John Hickenlooper. “We want to make sure that we’re putting limited dollars where they can do the most good.”

By Friday morning, Democrats had agreed to tweaks to incorporate new infrastructure spending in the bill and rethink the way the federal government would disperse money to cash-strapped cities and states. They had also brokered a deal targeting an extension of expanded unemployment payments. Party leaders seemed ready to lower the amount from $400 to $300 per week, while extending an extra month of benefits, in an attempt to stop Manchin and other moderates from joining Republicans on a broader, last-minute effort to curtail the jobless aid. It is unclear if he actually backs the plan, and he did not respond to a request for comment.

Some moderate Democrats also stood firm Friday against a renewed effort to authorize the first increase to the federal minimum wage in decades.

House Democrats had approved the hike, raising the rate to $15-an-hour, as they passed their version of the nearly $2 trillion stimulus package under arcane congressional rules known as reconciliation. But the Senate ultimately could not follow suit, after the chamber’s parliamentarian ruled the minimum wage could not remain in the bill as written. A slew of center-left Democratic lawmakers, including Manchin, Tester and Sens. Jeanne Shaheen (N.H.) and Kyrsten Sinema (Ariz.), voted against an amendment to revive the idea by the afternoon.

The White House, for its part, maintained this week that Biden has been “unmovable” on the core elements of coronavirus relief even in negotiations with moderates in the Senate. That includes preserving stimulus checks, extended unemployment aid and delivering financial help to state and local governments, added Jen Psaki, the White House press secretary, during a news conference Thursday.

A day later, Psaki added: “This is an incredibly progressive bill.”

Moderate Democrats initially had helped break the political logjam that had stalled coronavirus aid for months last year, a stalemate that at one point allowed expanded unemployment benefits to lapse for millions of Americans. They joined with centrist Republicans to put forward a $908 billion package that lawmakers adopted in December as the down-payment to tackling a larger, longer-term relief bill now on the Senate floor.

But the flurry of late changes that they have endorsed have spawned sharp rebukes this week from progressive leaders in Washington and even some centrist scholars, who faulted lawmakers for misreading voters’ intentions during the 2020 presidential election.

“Moderate Democrats in the Senate and the House are completely misreading where their constituents and the American people are. They are consistently doing things that are not popular, either in their states or anywhere else,” said Alex Lawson, executive director of Social Security Works, a left-leaning advocacy group. “If they think doing unpopular things is the right way to go, the midterms will be a wake up call for them.”

Howard Gleckman, a tax expert of the nonpartisan Tax Policy Center, specifically raised early red flags about the late changes to unemployment aid.

“It’s definitely regressive,” he said. “Reducing people’s benefits will for sure hit low-wage people. The trade-off on net will hurt lower wage people more than it will help them.”

But the wrangling over coronavirus aid could prove lasting, presaging similar fights to come as Biden and his Democratic allies ready additional major economic policy initiatives, including an attempt to inject trillions of dollars into efforts to upgrade roads, bridges, utilities and broadband networks nationwide. Infrastructure reform threatens to reopen political rifts between progressive who believe in spending big to rejuvenate the economy — and centrists who already are preaching fiscal restraint.

“When it comes to the covid relief legislation, it’ a little bit of an outlier because this is the signature campaign transition period promise the Biden administration has run on,” said Shai Akabas, the director of economic policy at the Bipartisan Policy Center. “It would be very difficult to be the one sitting member of Congress of your party objecting to a package that you agree to much of.”

But, he added, “The power dynamic in this moment is a little different than it may be over most of the rest of this session of Congress … I certainly think they are going to wield even more influence on policy fights down the road.”

Courtesy/Source: Washington Post