Democrats need to play coronavirus hardball
An effective response depends on it
The COVID-19 economic crisis is entering its third week, and still the federal government has passed no big rescue package. The Republican Senate leadership is trying to whip up votes for a mostly garbage plan. It would cut checks of $1,200 to most adults, plus $500 for children, which is at least not nothing, but also would create a $500 billion slush fund for Treasury Secretary Steven Mnuchin to use on whatever corporate bailouts he deems necessary, with no conditions or requirements.
It is both far short of what is necessary, and wildly unfair. So far Senate Democrats are putting up a surprising amount of resistance. On Sunday night they filibustered the bill, meaning it would need 60 votes to pass. It went down 47-47 because five Republican senators are in coronavirus quarantine. On Monday they filibustered it again, though by a narrower margin. Meanwhile, Speaker of the House Nancy Pelosi released a sketch of a plan which is a lot better than the Mnuchin slush fund, but arguably still short of what's needed. Democrats in the House and the Senate will need to agree to a very aggressive plan and stick to it, if they want to save America as a whole.
There is a very dangerous line of thinking that is common in Democratic circles in times of emergency. It goes something like this: In times of crisis, it is important for Democrats to behave responsibly and not exploit the situation for political gain. Therefore, they should negotiate with Republicans to get something rather than hold out for unrealistic, utopian demands and risk disaster.
The problem here is that so-called "utopian demands" are really just the bare minimum of what is necessary to actually address the crisis, and letting Republicans get their way will lead to a disaster that is only somewhat less bad than what would happen if we do nothing. Moreover, Democrats have all the political leverage in this situation, because Trump will take most of the blame if the economy collapses. The only way to actually rescue the whole American population is to exploit that political leverage.
The coronavirus situation thus far bears a marked resemblance to what happened with the bank bailout passed in fall 2008. The Bush administration, led by Treasury Secretary Hank Paulson, wanted a preposterously unfair rescue — shoveling hundreds of billions of dollars of cash and credit into the banks to restore the pre-crisis status quo, but doing little or nothing for the rest of the population. Because Democrats controlled the House, and because many Republicans refused to vote for what looked like big-government socialism anyway, and because Barack Obama was widely expected to be the next president, Democrats had enormous leverage over Paulson.
But instead of pushing for a better response that would aid workers and hold Wall Street accountable, Obama whipped Democratic votes for Paulson's bill, which eventually passed in modified form after it failed the first time. Democrats refused to exploit their leverage because they thought it would be irresponsible. In Reed Hundt's book A Crisis Wasted, administration insiders were clear about this choice. "We could have forced more mortgage relief. We could have imposed tighter conditions on dividends and executive compensation," admitted economic adviser Austan Goolsbee. As Obama told a group of liberal writers in 2010, they "didn't do what Franklin Delano Roosevelt did, which was basically wait for six months until the thing had gotten so bad that it became an easier sell politically."
As historian Eric Rauchway writes in his book Winter War, Obama's line here is a straight-up lie told by Herbert Hoover. In reality, Hoover did not want sensible, bipartisan solutions to fix the Great Depression — he wanted Roosevelt to abandon his New Deal program, which Hoover viewed as creeping communism that would "break down our form of government [and] crack the timbers of our Constitution." But again, the point of Roosevelt's New Deal was to fix the Depression and prevent it from happening again — especially by instituting harsh new financial regulations. Indeed, once Roosevelt was in office he quickly and easily fixed the banking panic that had been sweeping the nation for months using tools Hoover had dismissed out of hand.
The sensible, pragmatic, responsible thing to do in 1932 and in 2008 was to tell Republicans to either do as they were told or go pound sand, and the same is true today. Democrats should propose a solution that is both fair and big enough to address the crisis, and tell Republicans to take it or leave it. As the crisis gets worse and worse, and the bodies start piling up, Republicans almost certainly will fold — indeed, at least one Republican senator has already argued the Republican plan should be more fair. Among other things, Democrats should demand much larger checks to individuals that will go out automatically in future crises, an even bigger upgrade to unemployment insurance funded by the federal government, budget backstops for state and local governments who are getting slammed, wartime-style mass state purchasing of medical equipment, and requirements that any company that gets rescued keeps its staff on payroll. But to make that demand, House Democrats will actually have to write a bill doing so.
Gutless centrists will no doubt characterize this as "taking the American people hostage." In reality, it is Republicans who are taking the people hostage to try to get through a giant bailout for the rich. Democrats, should they choose to play the same kind of hardball, would be trying to save the American people in the only way it can be done — through politics.
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