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Biden Sees Child Tax Credit As a Key Message in the Midterms
Joe Biden and the Democrats are hunting around for a few good, popular, and easily understandable messages to use in the midterms. They now seem to have latched onto one: the child tax credit. The policy, as they will present it, is simple: the government gives free money to families with children. It used to be that people could claim the benefit on their tax returns in April if they were eligible and then get a refund for the amount a few months later. In the American Rescue Plan, which Biden got passed earlier this year, the annual amount was upped (to $3,600 for children under 6 and $3,000 for children 6-17). More important, though, is that the payment procedure was changed. Now the IRS automatically sends the money to beneficiaries—40 million households—every month. If a government check arrives in your mailbox every month, or a deposit magically appears in your bank account every month, you are far more likely to think about it than if a lump sum arrives in June or July after you have struggled filing your tax return. Democrats understand that 40 million households might be as many as 60 million voters and want to make the credit the centerpiece of their 2022 message.
The original goal of the child tax credit was to reduce the rate of child poverty. But now Democrats are focusing on it as an effective "middle-class tax cut." If, each month, the IRS is sending back some of the money you pay in payroll taxes, it is just as good as a tax cut for middle-class people. This is the framing Democrats want to use. In a recent memo, the DNC, DSCC, and DCCC all highlighted "tax cut for American families" as the top talking point for candidates to use when addressing voters.
Not everyone thinks this is a good plan, though. Some polling puts support for the program at 50% approval and 38% disapproval, but 52% don't want the program to become permanent. Still, this was before an all-out pitch to the voters presenting it as a tax cut for ordinary Americans with children, rather than a tax cut for the very rich. If the Democrats can make the case that they cut taxes for hard-working Americans whereas Republicans cut taxes for millionaires, billionaires, and multinational corporations, it could be a winning strategy. (V)
Which Family Policy Is Best?
While the PR folks in the Democratic Party are big on the child tax credit, ultimately the call is up to Congress. The $3.5 trillion reconciliation bill has no fewer than four programs in it to support children and families:
- The child tax credit
- Universal pre-kindergarten school
- Subsidized child care
- Paid family leave
All four kinda focus on the same thing—helping families—but from different angles. The problem is that if the bill has to be cut from $3.5 trillion to $1.5 trillion to get the vote of Sen. Joe Manchin (D-WV), something has to give. Speaker Nancy Pelosi's (D-CA) preference is to throw out entire programs from the bill and fully fund the remaining ones rather than keeping them all and giving them a haircut. She is getting a lot of blowback from progressives who want everything and want to give up nothing. But to get a bill that Manchin will accept, she may have to chuck many programs, to the progressives' dismay. But which ones?
The various family-oriented programs are in competition with programs addressing climate change, health care, racial justice, and many other things, so one approach Pelosi could take (and might be forced to take) is to pick one of the four listed above and chuck the other three in order to leave money for climate change and other Democratic priorities. But which one might live? The Democrats' PR folks want the child tax credit, but that might not be the best one to achieve most of the Democrats' goals. To get an idea of which one might actually be best for the most people, the New York Times asked 18 academics in sociology, economics, public policy, social work and law which one they would support if three of them had to go to fund priorities not related to families. Here are the winners, from most popular to least popular. But keep in mind, academics who know what they are talking about aren't the same as politicians who don't.
- Universal pre-K for all 3 and 4 year olds came in first. It has a lot going for it. For
one thing, it is effectively free child care for toddlers, which could allow mothers to work and ease poverty for
low-income families, especially for single moms. It also increases gender equality by giving more women their own source
of income. In a situation where the kids' father works and the mother stays at home with the kids, the father brings in
the money and may feel he should determine how to spend it. If the kids are in pre-K and the mother can work and bring
in income, she may get a bigger say in how their money is spent. Many European countries have long had pre-K starting at
age 2½ or 3. Some of the responses from the experts were "This is more of an investment in the future," "It would
be hard to dismantle once put into effect," "Subsidies are a band-Aid, and we need something more powerful," and "Full
parental employment is the quickest way to eliminate child poverty."
- Child tax credit (monthly checks to parents) came in second. Monthly checks give parents
flexibility. It can go to rent, food, child care, or subsidize a stay-at-home parent. Some of the comments were "It does
the most to empower families to do what they think is best for their families," "The money can be spent on anything, not
just child care, and it will cover children older than the usual age at which child care is used," and "It can reduce
child poverty right now and is likely to improve mobility over the long term."
- Subsidized child care was the winner with three of the eighteen. Their argument was
pulling more women into the work force and closing racial gaps. Some of the remarks were "It would offer the greatest
benefit to mothers who do not make enough income to cover the costs of child care," "Essential workers are
disproportionately women of color, and they do not earn nearly enough to be able to survive, let alone pay for child
care," and "I'm weighing what would help the largest number of families for the longest time span with the maximum money
in parents' pockets."
- Paid family leave got only one vote, even though the U.S. is the only rich country
without paid parental leave and leave for medical emergencies. The Democrats' plan would provide workers with 12 weeks
paid time off from work after a baby is born. It is up to 12 months in Germany, 9 months in the U.K., 6 months in
Ireland, and only slightly less in other European countries. The argument for this option was "Equality can be achieved
by changing gender norms both at work and at home, and paid family leave is a basic necessary step."
Of course, the program that academics think is best may not be the one the politicians choose, since the politicos consider how many votes each one is likely to bring in and the eggheads don't. Also, whether Democrats will choose to kill some of the programs outright or give them all a haircut is itself a major political decision that they may soon have to make.
Oh, and there are also the activists to contend with. Today, progressive groups are going to hold a rally in favor of the plan (paid family leave) that got one vote out of the 18 academics polled and came in last. There will undoubtedly be speeches about why paid family leave is important. But we would be astonished if there were speeches explaining why it is more important than the other three. If there were an infinite amount of money, Joe Manchin weren't so obstinate, or Sen. Lisa Murkowski (R-AK) suddenly announced that she was becoming an independent and caucusing with the Democrats, there wouldn't have to be choices made and everyone could be made happy. But that isn't the real world right now and so Democrats may have to pick a better program over a merely good program. (V)
McConnell Is Unpopular--with Republicans
That Senate Minority Leader Mitch McConnell (R-KY) is very unpopular with Democrats is a given. That he is also unpopular with his own constituents is also well known. The only reason he keeps getting reelected is that Democrats are so hated in Kentucky that it takes a phenomenally bad Republican to lose in the Bluegrass State, and McConnell doesn't quite make the cut. Also, he is pretty good at bringing home the bacon.
But all of a sudden, he has a new bunch of detractors: Senate Republicans. The reason is that McConnell gave the Democrats 2 months to raise the debt ceiling on their own. He made it clear he wouldn't help them in December, but he felt he had to give them the time needed to put together a reconciliation bill specific for raising the debt limit, which is his preferred option. And a number of other Republican senators are now angry with him for that. They wanted him to refuse to budge and default on the nation's debt if need be to stick it to the Democrats. McConnell was afraid that would crash the markets, start a worldwide recession, and the Republicans would get the blame for refusing to do something that the Democrats routinely did during the Trump, Bush, and Reagan administrations. In other words, some other Republican senators not only wanted to take the country hostage, they were fully prepared to shoot it if the Democrats refused to obey them.
Sen. Ted Cruz (R-TX), the informal leader of the "default or bust" team, said: "I believe Democratic Leader Schumer was on the verge of surrendering and then unfortunately ... Republicans blinked. I think that was a mistake." There is no evidence that Schumer was about to blink. Another Republican senator said that McConnell didn't have an exit plan in case Majority Leader Chuck Schumer (D-NY) refuses to use the reconciliation process in Dec. to raise the ceiling. Still another Republican senator said McConnell was calling and begging the members of his caucus to vote for a bill allowing a simple 2-month extension to the debt issue.
It seems that the influence of Donald Trump is so great on the Republicans that his mentality has taken over. It doesn't matter if you get what you want or that you do anything that is good for the country. All that matters is that you punish the other side and make it lose. If you win as a result, that is the cherry on the sundae, but the key thing is humiliating the other side. McConnell didn't do that (in part due to a realistic fear that the Republicans would get blamed for the ensuing disaster, or that the filibuster would get carved). So now the Republican Senate caucus is angry with McConnell.
Their anger is not exactly an accident. Trump hates McConnell and pounds him at every opportunity. This certainly does not help his popularity with Trumpy senators like Cruz.
Now get this: House Republicans think Rep. Liz Cheney (R-WY), a rock-ribbed conservative, is in cahoots with the Democrats and Senate Republicans think McConnell, who has confronted the other party time and time again for years, is soft on Democrats. This says something about the current state of the Republican Party.
If the Cruz faction is ascendant, it could cause big problems for the GOP, because then it won't have a powerful leader to herd the cats. Republicans are minorities in both chambers and exert power only due to being unified behind a strong leader. If that leader is declawed, it could hurt them later in this session and definitely in the next session in Congress, when McConnell allies Roy Blunt (MO), Richard Burr (NC), Rob Portman (OH), and Richard Shelby (AL) will be gone due to retirement. The anti-McConnell group doesn't have a leader, and although Cruz is making the most noise, he is not going to lead anything since the other 49 Republican senators (and all 50 Democratic/independent senators) hate him. So in a certain sense, having McConnell be weakened by his own team is good news for the Democrats. It is much harder for him to threaten them if he can't count on his caucus backing him up. (V)
Georgia Judge Throws Out Election Fraud Case
The 2020 election is almost over, at least for the time being, at least in Georgia. A group of Donald Trump's supporters filed a lawsuit asking to inspect the absentee ballots in Fulton County (Atlanta) in hopes of finding something wrong with them. Yesterday, Georgia officials said they had just finished inspecting the ballots and declared there is nothing wrong with them. Georgia Secretary of State Brad Raffensperger (R) said: "While no election is perfect, there was no widespread fraud or illegal voting large enough to overturn the election. The results, were, as we reported, that President Trump came up short in the state of Georgia."
That was enough for Superior Court Judge Brian Amero to throw out the Trump supporters' lawsuit. This is the last major lawsuit about the 2020 election in the pipeline in Georgia. The judge said he had reviewed the evidence before making his ruling, although it was on the technical ground of the plaintiffs lacking standing to sue since they could not prove they were harmed by having to accept the official count.
Trump immediately chimed in, saying: "After a very long wait, a judge in Georgia refuses to let us look at the ballots, which I have little doubt are terrible. The fight continues, we will never give up." Note that the country is still waiting for him to fund any of these challenges with the money that has been donated to his PAC for the purpose of funding election challenges.
While the original ballots are government property and will not be released, Fulton County has scanned all the absentee ballots and made the images available to anyone who wants to pay a small fee to see and count them. (V)
Is Joe Really Sleepy?
Republicans love to characterize Joe Biden as dull and sleepy. Maybe they have a point. There is one very important area where he could take decisive action on his own and hasn't. An often overlooked but still very critical federal agency is the Federal Communications Commission. It has jurisdiction over a fair amount of what is allowed and what is not on the Internet.
Currently, there is a vacancy on the five-member commission and the four members now seated are evenly split between Democrats and Republicans. Biden could easily nominate someone to the vacant seat and the Senate would quickly confirm that person, giving Democrats the power to set the rules on items from net neutrality to Internet billing to competition in broadband. When Donald Trump took office in 2017, it took him 3 days to fill a vacancy. Biden has now been in office for 9 months and hasn't come up with a nominee yet. This is the longest FCC vacancy in history. Senate Democrats, including Maria Cantwell (D-WA), Ben Ray Luján (D-NM), and Brian Schatz (D-HI), are begging Biden to send them a nominee to confirm.
In addition, the agency doesn't have a permanent chair right now. A group of 25 Senate Democrats sent Biden a letter last month asking him to make the current acting chair Jessica Rosenworcel (an Obama appointee) permanent, but so far he hasn't. This is even easier than filling a vacancy since the Senate Democrats know who they want. How hard can it be for Biden to ask Chief of Staff Ron Klain to prepare the official nomination form, hand it to him for a signature, and then scoot it over to Luján, the chair of the Senate Subcommittee on Communications, Media, and Broadband, to start the confirmation process? Rosenworcel is widely popular with Democrats and was nominated in the first place by his old boss, so even if Biden doesn't know her, this is really a no brainer.
Filling the vacancy is trickier. Progressives want a progressive. Women want a woman. Black people want a Black person. Latinos want a Latino. Nothing unusual there; Biden knows he can't please everyone, but surely he can ask Klain to find a progressive female Black lawyer and a progressive female Latino lawyer and ask Biden to pick one based on who is yelling the loudest.
The FCC has a lot of important things on its plate and with a 2-2 split is hamstrung on all but noncontroversial issues, such as helping rural carriers replace the Huawei and ZTE equipment in their networks. Both firms have close ties to the Chinese government and many people believe they are spying on all cellular communication that goes through them. There are American and European firms that make the necessary equipment, but smaller carriers don't have the money to buy it, so Congress appropriated it.
The 800-pound gorilla here is net neutrality. This is the principle that all Internet traffic is equal and no traffic is more equal. The FCC Chairman that Trump appointed on Jan. 23, 2017, Ajit Pai, quickly changed the FCC rules to eliminate net neutrality, something that pleased the telecomm firms immensely. Why, might you ask? It is currently allowed, for example, for Comcast or Verizon to send a letter to Netflix and Amazon Prime as follows: "We are planning to introduce two classes of service, Good Service (GS) and Bad Service (BS). Companies choosing GS will have connections to their customers run at gigabit speeds. Companies choosing BS will see their connections operate at 56 kbps. We have only enough bandwidth to handle one video provider with GS. If you would like to bid for GS, please send us your bid. Bidding starts at $20 million/month with no upper limit. Thank you for your attention."
In other words, absent net neutrality, a telecomm company can extort any website or service into paying it big bucks to function at all. Worse yet, if, say, Comcast makes a deal with Amazon Prime and Verizon makes a deal with Netflix, users would have to pick one (if that is even possible) and forgo the other. Net neutrality says the carriers can't do this. They have to treat all traffic equally. Naturally, it is partisan (how could it not be?), with Democrats siding with the users and supporting net neutrality and Republicans siding with the carriers and opposing it. There is more to it than just this, so read the linked article if you are interested. (V)
Fundraising Reports Are Due This Week
Candidates for federal office must report on their Q3 fundraising by midnight tomorrow, but some are jumping the gun and releasing the numbers before the deadline. With control of the Senate balanced on knife's edge, everyone is expecting fundraising to shoot through the roof. In 2020, the average winning Senate race cost $27 million, up from $15 million in 2018. The 2022 races will probably cost more. The total amount spent on Senate races in 2018 was $659 million; In 2020 that was $1.5 billion. What's wrong with this picture? Answer: This is a huge multiple of what elections cost in any other country.
One race where the major candidates have already reported is for the Florida Senate seat. Sen. Marco Rubio (R-FL) pulled in $6 million in Q3. This puts him on track to raise at least another $27 million in the remaining 4½ quarters. He has raised $12 million so far in 2021 and has $9.6 million on hand. However, his likely opponent, Rep. Val Demings (D-FL), raised $8.4 million in Q3, so she looks to be able to match him dollarwise. She started her campaign in June and has already pulled in $13 million for the year, slightly beating him even though she has been in the race 5 fewer months than he has. This race alone is expected to top $100 million. And in election contests, not all dollars are created equal. Candidates get much lower ad rates than super PACs, so a candidate's $1 million buys many more ads than a super PAC's $1 million. This is why candidates put so much effort into raising money themselves.
Over at the other end of the Sun Belt, Sen. Mark Kelly (D-AZ) remains a fundraising powerhouse. He pulled in $7.3 million in Q3. None of the Republicans in the race are going to come close to that and they will have to blow some of it on the primary while Kelly continues to sock it away for the general election. The main Republicans running are state AG Mark Brnovich, Major Gen. (ret.) of the Arizona National Guard Michael McGuire, and Blake Masters, COO of Thiel Capital. Brnovich is the best known and the only one who has won an election, but billionaire Peter Thiel is backing Masters. If he backs Masters with his wallet as well as his mouth, Brnovich is going to have to raise and spend heavily to keep up. Masters has another backer who is going to back him only with his mouth, not his wallet, but it is Fox News' host Tucker Carlson, who has a very big mouth. Brnovich raised some $600,000 in Q3 and Masters raised $1.1 million—clearly not in Kelly's league yet, and all of what they did raise will go into attacking the other Republicans in the primary.
The open Pennsylvania Senate seat is the Democrats' top pick-up opportunity. Rep. Conor Lamb (D-PA) has been in only since the middle of Q3, but he pulled in $1.2 million in 8 weeks. His main opponent, Lt. Gov. John Fetterman (D-PA), raised $2.7 million. The top Republican in the race, Sean Parnell (who has Donald Trump's endorsement) raised $1.1 million in Q3.
Georgia is another key Senate race. Trump-endorsed Republican Herschel Walker raised $3.7 million in his first 5 weeks. He was planning another fundraiser—in Texas— this weekend, sponsored by film producer Bettina Viviano-Langlais, but after it was reported that Ms. Viviano-Langlais had a swastika made of syringes in her Twitter profile, Walker canceled it. Here is the image, since removed:
This is an example of precisely what Senate Republicans are worried about. Walker is a newbie and didn't bother to vet who was offering to help him. If he had done a minimal bit of checking, he would have come across this. Or maybe he did and didn't think it was a big deal. The result is the story is all over the news now, including Forbes, WaPo, The Hill, Business Insider, and a whole lot of other places. Sen. Raphael Warnock (D-GA) hasn't announced his Q3 totals yet, but he is a prolific fundraiser with $10.5 million in the bank now. He might just bring up Walker's blunder one of these days. If Walker has to campaign on "I'm not a Nazi," that is not a great start.
Another important race is Nevada, where Sen. Catherine Cortez Masto raised $3.2 million in Q3. Her likely opponent is former Nevada AG Adam Laxalt (R), who raised $1.4 million since announcing in mid-August.
By next week we could have a more complete picture on the money race. (V)
New Retirement May Turn a Blue House Seat Red
Rep John Yarmuth (D-KY), the chairman of the House Budget Committee, a hugely powerful position, has announced that he will not run for a ninth term. He is the only Democrat in Kentucky's congressional delegation. His Louisville-based D+6 district leans Democratic, but with an open seat in a very red state, the Democrats will have to put in a lot of effort to keep it blue. Needless to say, the Republicans see the open seat as a pick-up opportunity.
As chairman of the Budget Committee, Yarmuth played a major role in shaping and passing key parts of Joe Biden's agenda so far and is currently playing a big role in the ongoing battle over the reconciliation infrastructure bill.
Yarmuth first ran in 2006, when he was the publisher of an alt-news weekly, and stunned everyone by flipping a Republican seat. He is a member of the Congressional Progressive Caucus and has an "F" rating from the NRA. The nominal reason he gave for retiring is that he wants to spend more time playing with his grandson. That may be true, but we can't help but think that he sees a very real chance that if he stayed, he would become ranking member, rather than chairman, of the Budget Committee, and since the minority has no power at all in the House, that wouldn't be a lot of fun.
Yarmuth will join nine other House Democrats in retirement in 2023. Six of those are in swing districts, ranging from R+4 to D+3. All of them are potentially flippable in a Republican wave. By contrast, none of the nine Republican retirements are in swing districts, and only three are in R+x (single-digit) territory. The other six are R+xx (double digit, from R+15 to R+28). Thus retirements alone are going to cause the Democrats big-time headaches in 2022, separate from reapportionment, gerrymandering, and new laws that restrict voting.
The battle for his seat has already begun. Within minutes of Yarmuth's announcement, state House minority leader Morgan McGarvey (D) threw his hat in the ring. State Rep. Attica Scott (D) also jumped in. McGarvey is a white man. Scott is a Black woman. Kentucky Republicans have said they have no plans to change the district's boundaries a lot, so it will probably keep its slight Democratic lean. Nevertheless, given that Kentucky is a very red state, no Democratic seat there is safe.
It is not clear who will replace Yarmuth as the top Democrat on the Budget Committee. Rep. Hakeem Jeffries (D-NY) is next in line, but the word has it that he does not want to be the chairman or ranking member. The #3 Democrat is Rep. Brian Higgins (D-NY), who represents Niagara Falls (which is actually a city) and Buffalo. (V)
Republicans Are Worried about Trump
Retirements, reapportionment, and gerrymandering might all help the Republicans capture the House, but there is also a powerful factor working against them: Donald Trump. And they are very worried about his effect. He is continuing to get involved in House races (and other races) in a way no former president ever has. And he is not doing this in coordination with the RNC, NRSC, or NRCC to help the GOP maximize its seats. He is doing it to maximize his revenge on people who have crossed him. As of the moment, he has endorsed candidates in 41 races. Of these, eight are mounting a challenge to a sitting Republican. It is completely unprecedented (or maybe unpresidented) for a former president to actively oppose any incumbent Republican, let alone eight of them. Another 17 are running in open primaries. Quite a few of those have supported auditing the 2020 election results in their states. Most of the others are incumbents running for reelection. Those are the safest bets for him because over 90% of congressional incumbents seeking reelection gain victories, allowing him to notch more "wins."
So far, since June, he has held rallies in Alabama, Arizona, Florida, Georgia, Iowa, and Ohio. He is planning to step up the pace now. And as many Republicans have noticed, his focus at all the rallies is the 2020 election and how he was cheated, not the 2022 election and how important it is for Republicans to win.
Many Republican operatives see this as backward-looking and not forward-looking and also think making the midterms about Trump will backfire because it will energize Democrats more than Republicans, since the people who show up at his rallies are already motivated and will vote no matter what. Veteran Republican strategist Mike DuHaime said: "For the most part, Joe Biden and the Democrats would welcome Trump doing a tour across America to make the election a referendum about Trump. Most Republicans would privately hope Trump would stay away." Polling shows that while 81% of Republicans hold a positive view of Trump, only 42% of independents and 8% of Democrats do. Chuck Coughlin, a Republican consultant in Arizona, said the quiet part out loud: "Trump by himself is great for a Republican primary. Trump by himself is not good for a general election." But there is no way to separate the two, so Republican candidates who solicit his help in a primary are making a Faustian bargain. (V)
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