Democrats and Republicans Are Far Apart on the Relief Bill

Democrats and Republicans agree that something has to be done to help people and companies hit medically or financially by COVID-19. Unfortunately, they don't agree what to do. Negotiators for both parties met yesterday but talks broke down, so no bill is expected today.

Majority Leader Mitch McConnell (R-KY) said that the Senate will go ahead with its $1.8 trillion bill. The bill would provide $500 billion in loans and loan guarantees to businesses, states, and cities. It would also provide $350 billion for small businesses. In addition, it would send checks to some Americans, and disburse emergency funds to many government agencies. One controversial section provides $425 billion for a giant slush fund to be disbursed by Treasury Secretary Steve Mnuchin to his friends. Donald Trump has already said that he would like a goodly piece of that to go to the hotel industry, which of course, would benefit him directly.

Minority Leader Chuck Schumer (D-NY) said of the McConnell plan: "I'm just going to tell you that we need a bill that puts workers first, not corporations." Sen. Elizabeth Warren (D-MA) wasn't as polite as Schumer. She tweeted:

Millions may now lose their jobs. And Trump wants our response to be a half-trillion dollar slush fund to boost favored companies and corporate executives – while they continue to pull down huge paychecks and fire their workers. Here’s what I know and how we stop it:

— Elizabeth Warren (@SenWarren) March 22, 2020

McConnell is doing everything he can to ram the bill through. He held a procedural vote on Sunday, one that failed by a vote of 47-47. Undeterred, he is planning to hold a vote on the bill itself shortly after the stock market opens today (a moment that he, and everyone else, knows is going to witness another sharp drop in the Dow Jones, since Dow futures are way down). The general idea, of course, is to create pressure on the Democrats to fall in line.

What the Majority Leader is ignoring are a pair of reality checks that make it impossible that he will get what he wants, no matter how much of a tantrum he throws. The first is that he doesn't have the votes in the Senate. He will need 60 votes, of course, to overcome a possible filibuster. One might think that a filibuster would be an unacceptably bad "look" for Senate Democrats under current circumstances, but they are willing to do it, and to flood the airwaves with members who will explain they have no interest in handing a $400-plus billion, no-strings-attached, slush fund to the Trump administration (is there really any doubt that a big chunk of that would be used for wall construction?). That is likely an explanation that the majority of Americans can accept, especially if those Americans ultimately see some clear benefit to having waited, like more unemployment insurance.

Meanwhile, the second reality check that McConnell is ignoring is, of course, the fact that the Congress is bicameral. There is another chamber of Congress at the other end of the building that the Democrats control. Not surprisingly, Speaker Nancy Pelosi (D-CA) said: "We'll be introducing our own bill and hopefully it will be compatible." It won't be. Currently, the House is not in session, but Pelosi is likely to get folks back in town pronto. If both chambers pass bills, they will go to conference, where some hard bargaining will take place. The results are of enormous importance since they will determine which companies survive and which don't, as well as which workers keep their jobs and which don't. It will be sausage making of the wurst kind. (V & Z)

States Are Fighting with One Another over Scarce Medical Supplies

The near-complete lack of federal coordination in buying and allocating scarce medical supplies, including N95 masks, gloves, gowns, and other things needed to protect health-care workers (not to mention ventilators needed to save lives) has caused states to get into bidding wars with one another to obtain needed supplies and equipment. The results are a windfall for the manufacturers but an unnecessary expense for the states. Gov. J. B. Pritzker (D-IL) told CNN's "State of the Union" yesterday: "It's a wild, wild West out there, and indeed [we're] overpaying for PPE [personal protection equipment] because of that competition." Using the Defense Production Act, Donald Trump has the authority to order companies to manufacture products needed in a national emergency, but he has not done so, leading to shortages.

Pritzker also said that Illinois has received only a quarter of what it needs. One of us (V) has anecdotal evidence that in New York, doctors are working with very sick patients without any protection for themselves. That is going to lead to sick doctors who have to stay home, leaving even fewer doctors to care for patients. Pritzker added that if the federal government had ordered more equipment to be made and handled the distribution, the flow of supplies would be better and states wouldn't be overpaying. (V)

Trump's Normal Modus Operandi Won't Work This Time

Donald Trump has had many business and personal crises in his lifetime, including multiple bankruptcies and divorces, and his approach to them is always the same: Bully everyone around him into submission. Yelling, lying, cheating, and suing are what he does best. Force and bluster are his main tools. His problem now is that viruses are too small and stupid to respond to these kinds of attacks. Trump biographer Michael D'Antonio noted that bragging and bluster always worked in the past. "But in this case, he tried that in the beginning and you can't bluster your way out of people dying." Also, yelling at the stock market didn't work so well.

Still, old habits die hard. Last week, when Peter Alexander of NBC News asked Trump if he was giving Americans a false sense of hope by promising immediate delivery of a drug that experts say is not proven effective, he just attacked Alexander and said: "You know, I'm a smart guy." The same old bluster. In the past, when banks came after Trump for overdue loans or contractors demanded payment for work they had completed, he just refused, leading to over 3,500 lawsuits. That style isn't working so well now.

Trump's attitude has been a problem inside the White House, as officials must make difficult policy choices, all of which will anger some people. They have all learned that the main thing they have to do constantly is flatter Trump by telling him how great he is. But decisions have to be made and advisers often disagree about what to do. They can all tell him how great a leader he is, but in the end, a course of action has to be identified. Harry Truman may be dead, but the buck still stops in the same place it used to. In the coming weeks and months, we will see the consequences of that. (V)

Poll: Majority Approve of Trump's Handling the Crisis

In the end, maybe Donald Trump doesn't have to solve the crisis or get the economy running or save lives. Maybe all he has to do is make it look like he is doing so. And if so, maybe lying and bluster can do the job once again. A new ABC News/Ipsos poll shows that 55% of Americans approve of how he is handling the crisis and 43% disapprove. That puts him 12 points above water on this issue. A week earlier he was 11 points under water.

But it's not over until the fat lady sings, and she can't even find her phone to call Uber to get to the theater yet. Things are going to change drastically in the next couple of months, as millions of people lose their jobs and hundreds, maybe thousands, maybe tens of thousands, of people die from COVID-19. On NBC's "Meet the Press," Mayor Bill DeBlasio (D-New York City) said yesterday: "The truth is, and New Yorkers and all Americans deserve the blunt truth, it is only getting worse. And in fact, April and May are going to be a lot worse." Many people are still in denial about how serious the pandemic is, but they are going to find out in the next few months as the human toll mounts. The real test for Trump will be how people react when the deaths skyrocket and their 401(k)s nosedive. (V)

Burrgate Could Have Consequences for the Senate

Actually, it is more Loefflergate, but Burrgate rolls off the tongue more easily. Let's start with an undisputed fact (although everyone seems to be entitled to their own facts nowadays, so maybe none are really undisputed). Anyhow, on April 4, 2012, then-President Barack Obama signed into law the Stop Trading On Congressional Knowledge (STOCK) Act, which prohibits members of Congress and their families from profiting off information not available to the general public. For example, if a member is present at a briefing and learns that some company is about to get a big government contract, the member can't quick-like-a-bunny tell his sister to buy stock in that company. Conversely, if a member confidentially learns something is about to happen that will adversely affect some company or industry, telling his brother-in-law to sell any stock he has in it or to short it violates the law. The vote in the Senate on the STOCK Act was 96-3, with only three senators opposing it: Jeff Bingaman (D-NM), Tom Coburn (R-OK), and Richard Burr (R-NC). Only Burr is still in the Senate. The bill passed the House 417-2.

That's the theory. Now the practice. Burr is chairman of the Senate Intelligence Committee and, as such, was receiving confidential briefings throughout February on the COVID-19 threat. He was told that it was going to a pandemic, akin to the 1918 Spanish flu. On Feb. 13, when the Dow Jones index was 29,423, he sold somewhere between $628,000 and $1.72 million of his stocks in 33 separate transactions, including hotel chains whose stock cratered last week. The Dow closed at 19,174 Friday, so his "foresight" to sell then was a smart move. Perhaps Burr is a financial whiz and saw the crash coming before anyone else, although before entering politics, he worked for 17 years as a sales manager for a company that sells lawn equipment, not an occupation that normally gives one special insight into market movements. However, Burr is not a selfish man who looks out only for himself. On Feb. 27 (before the pandemic announcement), he told a meeting of rich businessmen that they should get out of the market immediately, as well. Unfortunately for him, someone recorded his warning and leaked it to the media.

Some people think this affair smells like an animal product that can be spread on lawns to make them grow better. Fox News' Tucker Carlson called for Burr to resign from the Senate right now. Is Carlson letting his inner Democrat get the best of him? Not exactly. Under a 2018 law approved by the North Carolina legislature over the veto of Gov. Roy Cooper (D-NC), if a Senate seat becomes vacant, the former senator's state party must produce a list of three candidates to fill the vacancy and the governor must pick one of them. The list could, for example, contain two fire-breathing, frothing-at-the-mouth conspiracy theorists totally unsuited for public office, and a merely extreme right-wing state senator, thus forcing the governor's hand. If Carlson got his way, the North Carolina Republican Party could de facto pick the new senator and give him or her an almost 3-year head start on the 2022 election in which Burr wasn't going to run anyway. Under these circumstances, don't be surprised if many key Republicans start demanding Burr's head on a pike. It would get rid of the unpleasant smell of that lawn product and mean the GOP wouldn't have to defend an open seat in 2022.

Now we come to Sen. Kelly Loeffler (R-GA), whom Gov. Brian Kemp (R-GA) appointed to fill out the term of former senator Johnny Isakson, after he resigned in December due to poor health. Rep. Doug Collins (R-GA) lobbied hard for the job, citing his fanatical devotion to Donald Trump during the House impeachment hearings. He was probably the single strongest Trump defender in the House, maybe even more than Freedom Caucus cofounder Jim Jordan (R-OH), and that is saying something. But Kemp picked Loeffler, a multi-millionaire with no political experience but who can self-fund, instead because he was afraid that Collins is so far to the right that he could lose the November special election to fill out Isakson's term until Jan. 2023. Trump, in an unusual attack of gratitude, had supported Collins for the Senate and was dismayed with Kemp's choice. Collins was undeterred by the appointment and filed to run against Loeffer in the November senatorial primary, but the entire Republican establishment, including Trump, quickly closed ranks and is behind Loeffler.

However, last week the Daily Beast reported that on Jan. 24, the Senate Health Committee, of which Loeffler is a member, got a confidential briefing on COVID-19 from Robert Redfield, the CDC director, and Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases. After the meeting, Loeffler was appreciative, tweeting her thanks for the briefing (but not mentioning the prediction that a pandemic was coming). Later that day, she executed the first of 29 stock trades she and her husband made in the next two weeks, all but two of them being sales. One of the buy orders was for between $100,000 and $250,000 in Citrix, a company that makes teleworking software, and that stood to do well as companies frantically starting buying software to allow their employees to work from home. Her sales dwarfed Burr's, and were well in the millions. Bloomberg News put together a chart showing how the stocks Loeffler sold have performed up to March 19. By selling when she did instead of now she saved herself $1.5 million.

Loeffler has responded to the uproar by using the "I had no idea!" defense. She says that her advisors made the trades without any input from her or her husband. Hubby Jeffrey Sprecher is unlikely to claim he doesn't know much about stocks and bonds and all that complicated stuff, since he is chairman of the New York Stock Exchange and CEO of the holding company that owns it. In fact, he outdid his wife, selling $3.5 million worth of stock on Feb. 26 and another $15 million on March 11. He probably also has more than a passing knowledge of insider trading laws in general and the STOCK Act in particular.

Now back to Doug Collins. He saw his chance and snatched it, tweeting:

People are losing their jobs, their businesses, their retirements, and even their lives and Kelly Loeffler is profiting off their pain? I'm sickened just thinking about it.

— Doug Collins (@CollinsforGA) March 20, 2020

He will no doubt keep pounding Loeffler for being corrupt until the jungle (nonpartisan) primary on Nov. 3, with a runoff on Jan. 5, 2021, if no one gets 50% in November. With multiple Republicans and multiple Democrats in the race, a runoff is inevitable (most likely one Democrat and one Republican, though it's possible the top two finishers could be from the same party). Note that the runoff is after the new Senate is seated. Collins will portray Loeffler as a rich and greedy senator who no doubt sees it as perfectly natural to use whatever information she has for her own benefit. Laws are for the little people.

But it puts the GOP in a bit of a pickle now. If Loeffler advances from the Nov. 3 runoff and Collins does not the GOP will be stuck with a candidate that the Democrats are going to hold up as the poster girl for a kind of corruption that voters can understand: While Americans were dying of COVID-19, she was breaking the law by profiting from it. If Collins makes it to the runoff and Loeffler does not, they will be saddled up with a fire-breathing right-winger that the (Republican) governor was afraid to appoint (despite Trump's urging him to do so) for fear Collins would infuriate suburban voters. As a consequence of her actions, Loeffler has now given the Democrats a shot at picking up a Senate seat.

A complication is that by the date of the runoff, it will be clear whether control of the Senate depends on it. If control of the Senate comes down to one special runoff election in Georgia on Jan. 5, it will probably be the most expensive nonpresidential election in U.S. history. This story is by no means over. Sens. James Inhofe (R-OK), Dianne Feinstein (D-CA), and Ron Johnson (R-WI) have also sold stock in potentially "convenient" transactions recently, and there may be others. (V)

What Can Sanders Get from Biden?

Sen. Bernie Sanders (I-VT) undoubtedly knows that he has no realistic chance of getting the Democratic nomination anymore. So why isn't he giving up and endorsing Joe Biden? One theory is that he wants to collect more delegates to extract something from Biden. But what? FiveThirtyEight has a rundown of possible goodies he could try for, and whether there is any precedent for getting them, as follows:

• Sanders gets nothing: Biden could resist giving Sanders anything, pick a moderate Midwesterner as running mate, such as Sen. Amy Klobuchar (DFL-MN) or Gov. Gretchen Whitmer (D-MI), and stick with Hillary Clinton's 2016 platform. The logic here is that either: (1) Sanders' supporters will vote for Biden anyway because they hate Trump so much or, (2) Sanders' supporters will not vote for Biden no matter what he offers since he is not Bernie. The precedent here is 2000, when Al Gore beat Bill Bradley. Gore vanquished Bradley and offered him nothing for his troubles. Of course, Al Gore went on to lose that election, even though he won the popular vote.
  
  
• Sanders gets platform changes: Biden could cherry-pick a few items Sanders campaigned on and put them in the party platform. He could probably support a $15/hr minimum wage and free college for students from families whose combined income was below $125,000. He could also say the Democrats support a public option to allow anyone to buy into Medicare, with the intention that some time in the future if a very large fraction of the population does so, he will eventually make it for everyone. He could also agree to forgive student debt for students who work for 5 years in jobs in the public interest, such as teachers, police officers, nurses, and public defenders (but not investment bankers). There is some precedent for this. In 2016, Clinton put a few of Sanders' ideas in the platform.
  
  
• Sanders gets to dictate some appointments: It is doubtful that Sanders wants a job managing some bureaucracy in a Biden administration, but he could insist on Sen. Elizabeth Warren (D-MA) being secretary of the treasury or AFL-CIO President Richard Trumka being secretary of labor. Sanders could also dictate a ban on certain people, such as no administration job for Michael Bloomberg, J.P. Morgan Chase CEO Jamie Dimon, or any billionaire, for that matter. In May 2016, when many Republicans were trying to figure out how to get rid of him, Donald Trump released a list of people he would consider for the Supreme Court. Neither Neil Gorsuch nor Brett Kavanaugh was on the list, but Republicans saw that all were conservative judges.
  
  
• Sanders demands a leftist running mate: Sanders knows very well that, due to Biden's age, this time the vice presidency might be worth a bucket of fine wine instead of a bucket of warm piss, and could insist that Biden pick a leftist as running mate. Rep. Alexandria Ocasio Cortez (D-NY) isn't old enough, but Stacey Abrams is. Sen. Tammy Baldwin (D-WI) is a possibility, but would cause the Democrats to fight for a Senate seat they already have in a special election. In 1996, conservative activists were worried that Bob Dole wasn't on their team, so he picked former representative Jack Kemp, a true-blue supply sider, to make them happy.
  
  
• Sanders himself as the running mate: It's a possibility, but we don't buy it. A ticket with two white men whose combined ages exceed 150 years is not where the modern Democratic Party is. Besides, Biden doesn't like Sanders at all. That said, there is precedent here, namely 1960, when John Kennedy picked Lyndon Johnson, whom he despised, because he knew he had to win Texas.

Of course, any deal is a two-way street. Suppose Biden says to Sanders: "OK, I'll appoint Elizabeth Warren as secretary of the treasury. Now, how can you guarantee that your supporters will vote for me?" Sanders can't, of course, which reduces his leverage. Also, if Biden has the whole thing wrapped up on April 28, when New York, Pennsylvania, and three other states vote, he may not be in the mood to give Sanders anything other than a pat of the back for running a good campaign. This is why we have argued that Sanders' leverage is actually greatest right now, and that winning more delegates doesn't help him in any appreciable way. (V)

Bloomberg Dumps Staff

Despite a promise to keep his campaign staff employed until November, even if he didn't win the Democratic nomination, Michael Bloomberg is shutting down operations and firing thousands of staffers who thought they were going to remain employed until Election Day. Most of them will also lose their health insurance at a moment when having health insurance is a big deal.

However, the billionaire is giving $18 million to the DNC, so some of them may get a new job there. However, the number of new jobs will certainly be smaller than the number of old ones, because Bloomberg's campaign was active in more than half the states and the DNC be targeting only half a dozen or so swing states.

One of Bloomberg's aides pulled no punches and said: "I am disgusted by Mike Bloomberg and his staff. He has left us with no health insurance during this pandemic. I have a family, and do not know what we will do at the end of the month." At its peak, the Bloomberg campaign had 2,000 people working around the country and hundreds more at its New York headquarters. Most of them are on their own now. Presumably, this will serve as cautionary tale the next time a billionaire jumps into the race, and tries to buy themselves a full-fledged campaign, with all the trimmings. Would-be President Zuckerberg or would-be President Bezos might not have as easy a time as Bloomberg did attracting top talent. (V)

Rand Paul Has COVID-19

It was bound to happen, and now it has. A senator has tested positive for COVID-19. Ironically, given his disdain for federal intervention in the crisis, it's Rand Paul. He says he is asymptomatic and so, as a consequence, he has been at work in the Senate recently and may have infected other senators. Paul doesn't know where he picked it up.

The Senator isn't the only person in D.C. to test positive. Two representatives, Ben McAdams (D-UT) and Mario Díaz-Balart (R-FL) have also tested positive, as has a member of Mike Pence's staff. (V)

Buttigieg Had No Choice

As strange as it may seem, when Pete Buttigieg decided that a promotion from mayor of a smallish town to president of a large country might be nice, he might well have been pursuing his only realistic option. A study by Larry Sabato's Crystal Ball shows that Democrats in low-level offices in red states and Republicans in low-level offices in blue states are pretty much stuck. Partisanship is so strong that in 18 states, Republicans control all the statewide offices and in 16 states the Democrats control all the statewide offices. Although it should be noted Sabato only looked at state offices like governor, treasurer, secretary of state, etc., not federal offices (i.e., senator).

In an additional four states, the Republicans control everything except for the governor's mansion. These are Kansas, Kentucky, Louisiana, and Montana. In three other states the Democrats control everything except the governor's mansion. These are Maryland, Massachusetts, and Vermont. In these cases, usually something was wrong with the dominant party's gubernatorial candidate, allowing the other one to win, but that doesn't change the one-sided nature of the state's politics. This means that 41 states are extremely polarized. Digging deeper, five more states are one-party rule except for one other statewide office. In Florida the Agriculture commissioner is a Democrat. In Missouri, it is the auditor and in West Virginia it is the treasurer. It also holds the other way, with secretaries of state in Nevada and Oregon being the sole Republicans in state government. Only four states have a genuinely mixed state government, with at least two Democrats and two Republicans in state office. These are Arizona, Iowa, North Carolina, and Washington.

This state of affairs leads to a vicious cycle. For example, an ambitious and talented Democratic mayor in Indiana or an ambitious and talented Republican mayor in California might be able to become a state senator, but that would be his or her ceiling. Buttigieg didn't want to be a state senator, so president was the only office he thought he had a shot at. In contrast, an ambitious Republican mayor in Indiana can realistically dream about being state treasurer, attorney general, or governor. As a consequence, in the red states, the Democrats don't have much of a bench and in the blue states the Republicans don't.

And to the extent the parties do have a bench, the folks sitting on it may not be willing to step up to the plate. California, to take one example, has had a number of Republican members of Congress (e.g., former Ways and Means Chair Jerry Lewis, current Minority Leader Kevin McCarthy) achieve great power by working their way up through the House's seniority system. Why would they risk that in a near-hopeless quest for state office? And so, the last three Republicans to run for governor in the Golden State were businessman John Cox, banker Neel Kashkari, and Silicon Valley executive Meg Whitman. These folks had a combined total of zero years in elective office under their belts; their primary selling point was that they could self-fund. That's better than running nobody, but just barely, and the trio each got between 38% and 41% of the vote, which means they all got trounced. The same thing tends to happen with other statewide offices, with the result that there are no Republican Beto O'Rourkes or Stacey Abramses in California—folks who ran a heckuva campaign, and just might break through on the second go-round. And so, the state's GOP bench remains empty, except for folks like McCarthy, who aren't willing to leave it. With no bench, a party can't win statewide office, so the situation perpetuates itself.

One office the study didn't include is senator, which is a federal office, and works somewhat differently than a state-level office. Senators are national figures in a way governors are not. If the Democrats get their desired candidates in the two Georgia Senate races, Jon Ossoff in the regular election and Raphael Warnock in the special election, millions of dollars in donations will flow in from out of state. The national parties will get involved. This makes it possible for someone from the "wrong" party to get elected senator much more easily than getting elected state treasurer. Nevertheless, there are only a handful of Democratic senators from solidly red states or Republican senators from solidly blue states. A few of them are Jon Tester (D-MT), Cory Gardner (R-CO), Doug Jones (D-AL), Joe Manchin (D-WV), and Susan Collins (R-ME). After November's election, there may be even fewer of them. Swing states, like Wisconsin and Pennsylvania, have split Senate delegations, but that is because the states themselves are not really solidly red or blue. Anyhow, bringing it back to where we started, it means that Buttigieg might plausibly make a run at Sen. Todd Young's (R-IN) seat when it's up in 2022, but in 2020, the path to the White House was the only one that was actually open for him. (V & Z)

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