Peter Friedmann’s View from Washington, DC – October, 2020
As November 3 approaches, predictably, the media is breathless. Anything that Trump or Pelosi says is repeated, magnified, amplified. If one were to actually believe the media, one would think that what’s happening now in politics, is unprecedented. So once again, we are reminded, turn off the noise, get the facts, and let us reach our own conclusions.
Yes, we are in unprecedented times – but it’s COVID that is unprecedented, not the politics. We have had bitter partisan unruly politics before – how Abraham Lincoln gained his party’s nomination makes for sensational/appalling reading. But we haven’t had a pandemic such as this -- with infection numbers, the death toll, the shuttering of the economy, closing schools, physical and social isolation, long-term impacts on a generation of children. Washington DC is not exempt.
At Federal agencies, most are working from home. We lobby Capitol Hill by phone and FaceTime with staff who may or likely may not actually be on the Hill. ‘Fly-in’s’ and ‘lobby days’ of associations, thronging the halls of Congress, and crowding restaurants and hotels of the District, are no more (and not coming back till Spring or later). Commuter buses that usually bring several thousand to the District each morning, and home again in the afternoon/evening, are running about 10% full. Congress is conducting hearings virtually. For the first time in history, the House conducts votes without requiring the Member to be present on the Floor. The leaders of the Armed Services, the Chiefs of Staff, are not present this week, as they are in quarantine; one wonders, can our national defense be run virtually? Last week the nation learned of the latest aggressive COVID treatments, as they were administered to the President. COVID’s impact is unprecedented and very visible here in DC.
Not only is the pandemic unprecedented, but so is the digital revolution, which in addition to changing how all of us shop, meet, eat, work, makes possible all of the above.
One would think that COVID and digital transformation would be sufficient.
But media wants more - politics. Breathlessly speculating the one party could control the House, the Senate and the White House. Would that be unprecedented? No, it would be the usual: of the last 7 Presidents, 5 (Carter, Clinton, Bush, Obama, Trump) benefited by their party holding the majority in both houses of Congress – at least for parts of their terms.
So is anything unprecedented in politics here in DC during this election year? They’re tense, messy and partisan with impeachment hearings and investigations. They are getting in the way of some urgently needed legislation (in this case, a fifth COVID relief bill) – but that’s all ‘normal’ in an election year. What is unusual, is how much this partisan, divided Congress and White House has accomplished in an election year: unprecedented amounts of spending (COVID), avoiding a government budget shutdown, passing a major trade bill. A passably productive (even if partisan and angry) Session of Congress is not what the media is interested these days.
But hang on, the contentious confirmation vote for Judge Barrett, to the Supreme Court, is coming, next week.
Peter Friedmann’s View from DC – September, 2020
No one can remember a more toxic partisan environment here in Washington, DC. So when a glimmer of bipartisanship appears, it’s very welcome – perhaps not to the media which seems only interested in fanning the flames of conflict, but it is welcomed by those of us who try to get things done on Capitol Hill.
Distracted by political maneuvering in this election year, the House and Senate have been unable or unwilling to do even their basic job -- to pass a budget for the coming fiscal year which begins October 1 2020. So here we are once again, just days away and no budget. But out of the blue comes a compromise between the House and Senate. It looks like we will avoid another shutdown of the federal government. No doubt this will be just a brief moment before everyone gets back to their battle stations. But it demonstrates that just as it appears the wheels are coming off tracks, some rational thinking can prevail.
So now, we are in an election year, with a contentious (to put it mildly) Presidential election campaign underway. Simultaneously, control of Congress is at stake: Republicans seeking to hold their slim Majority, and Democrats motivated to take it. Over all this hangs COVID and the resulting economic doldrums.
That has been more than enough to limit what Congress could accomplish this year. But in fact, the unlikely Trump-Pelosi team have accomplished much, probably more than any President and Speaker of the House – passing and signing, in very short order, the largest economic stimulus initiative in the nation’s history. $4 Trillion in the four COVID bills enacted this past Spring. It took President Trump and Speaker Pelosi to agree on the desired outcome, and to convince their caucuses to compromise. Even earlier, the President and the Speaker overcame objections, and worked to convince the Republicans and Democrats to vote for the USMCA – a massive re-write of the rules for trading with our nation’s largest trading partner, Mexico. And despite the heat of the approaching election, it is possible that President Trump and Speaker Pelosi could lead their caucuses to compromise on another COVID stimulus bill. If all this doesn’t sound like what you hear on MSNBC, CNN and FOX, then maybe they aren’t telling you what’s really happening….
Now, if all that were not enough, we enter what is always the most contentious battleground for the President and Senate, regardless of party: confirming a new Supreme Court justice. Even in the best of times, the battle over a Supreme Court justice brings the Capitol to a halt – this is because the most difficult, passionate, intractable social issues come to the fore: abortion; gun control; racial, religious, gender issues; voting rights; Presidential authority; etc. Most Senators and Congresspeople prefer to avoid these high-voltage issues during the regular Sessions of Congress, because resolution is almost impossible. These are issues for the highest court, and they are all aired during the confirmation hearings.
Whether the President is Republican or Democrat, whether the Senate is with Republican or Democratic Majority, confirmation of a nominee to the Supreme Court has, for the past 30 years been the place where partisanship and policy hardens, and compromise and protocol are either eroded or disappear entirely. Fortunately, appointment to the Supreme Court is for life, so these confirmation episodes occur, on average, only once every 10 years (the 3 during President Trump’s first term are an anomaly).
Incredibly, this year, a Supreme Court nomination battle, with all the anger and angst it generates, coincides with the final weeks of an election which will determine control of the White House or Congress. As they say, “you can’t make this stuff up”.
September 23, 2020
Peter Friedmann’s View from Washington DC
Media and the parties continually politicize everything, including the COVID pandemic, motivated by the rapidly approaching elections – perhaps as pivotal as any in recent memory, with control of the White House and Congress at stake. But now, both parties on Capitol Hill are grappling with some very difficult choices. The answers are not easy for anyone, including the Republican and Democrat legislators
Despite all the name-calling, President Trump’s and Speaker Pelosi’s coordinated efforts facilitated unprecedented Federal spending, both in the time to move legislation through Congress, and in the sheer amount of money authorized. They worked together for rapid passage of USMCA, far less contentious then when NAFTA was originally passed 25 years ago.
More recently, Congress and the President have chosen to exacerbate the deteriorating relationship between the US and China. Quickly passing and implementing sanctions against China for abuse of ethnic minorities and violation of Hong Kong’s autonomy. So again, despite the by-now predictable media narrative, even on trade policy and foreign affairs, Pelosi and Trump, the Democratic House and the Republican Senate/White House, are moving major new policies forward – it could not occur without coordinated joint efforts.
So why does it appear that the pace of coordinated efforts has slowed? Because they are now confronting some very difficult questions which are not political, but rather, scientific and economic. Should the next COVID relief bill continue to pay an additional $600 a week above the regular unemployment? All recognize it has created a disincentive to return to work for many (those previously earning under $50,000 dollars/year). To support its narrative of stark partisanship, the media focuses on the Democrats who want to continue the $600, and on the Republicans who want to eliminate it entirely. But the media misses (or intentionally ignores) the Republicans and Democrats who are working to find ways to extricate ourselves from the situation, perhaps to phase out that $600 over an undetermined period of time. In fact, some compromise will prevail.
Similarly, there are serious health questions as we approach decisions on reopening schools. Questions as to the physical health dangers of reopening the schools, as well as the social and psychological dangers of not opening schools. Neither party can claim to have the answer, because, they don’t.
We remain in uncharted territory. The path forward is unclear.
Peter Friedmann’s View from Washington DC - June 2020
“Trump and Pelosi - Working Together, But Never Admitting It”
While the world has watched demonstrations (and looting) here in DC, Capitol Hill and White House have been busy, and contrary to the media narrative, working productively together.
Together, the Democratic Majority House, Republican Majority Senate, and President Trump have, in the past couple months, passed the largest public relief bills in the nation’s history, to address COVID. The two primary advocates for such massive funding levels were Nancy Pelosi and Donald Trump, both working to overcome pockets of Congressional and Administration resistance. The House and Senate are now discussing and will shortly pass a fifth massive economic relief bill, extending unemployment supplements, funding state and local governments, etc. The President will sign what they pass.
The House and Senate are actually quite close substantively (even if politically, they cannot admit it) on unprecedented federal intervention into local policing policies and tactics, in response to the George Floyd catastrophe. The media will highlight the differences between the Democratic and Republican approaches (and there certainly are a number), even though they have much in common. Again, the President will sign whatever they pass.
Nancy Pelosi and Donald Trump had to work together to pass the controversial US Mexico Canada Agreement (USMCA) six months ago. Normally it’s a year (or more) to update regulations to implement complex trade agreements. But this year there is pressure to get the USMCA in place much more quickly -- July 1. The trade community and Customs & Border Protection are working feverishly to be ready. Why the rush this year? Both Donald Trump and Nancy Pelosi demanded it. They won’t admit it, but we who work to get bills and amendments passed, know that just like the COVID spending, they are “on the same page”, once again.
What ‘s the next big objective, and will they work together again? Roads, bridges, ports, transit have long been every politician’s spending perk. But in the past 3 decades, Congress has gotten cold feet. The Highway Gas Tax used to be sufficient to pay for roads and transit. But since 1992, the tax hasn’t been increased, and revenue is grossly insufficient. Now the President is touting a trillion dollar infrastructure bill, more money than any such bill before. Is it too much for Congress to swallow? It shouldn’t be, after all, Congress/President just this Spring agreed to spend over $4 trillion on COVID response. So, $1 trillion for highways, subways, bridges, roads, so desperately needed, and such a job creator, sounds reasonable to most Democrats, many Republicans and the President.
How do we pay for it? One might think that if it is urgent, we should do the same as for military spending, for COVID response, for climate change or policing programs – authorize and appropriate from the US Treasury. However, Congress seems stuck on treating infrastructure differently – since 1992 refusing to increase the gas tax, refusing to provide general Treasury funding, insisting that it must be “paid for” by some new or additional taxes or user fees.
Will this year be different? Will they abandon dependence on “pay-for’s”; just take (a lot of) money from the Treasury? Or come up with some other infrastructure funding mechanism? Depends on whether Trump and Pelosi can continue their string of successes.
No doubt President Trump and Majority Leader Pelosi hate the thought of being seen as a “team”; but their record this year suggests that once we get past the “noise”, in important ways, they are. And the nation is better off.
Peter Friedmann’s View from Washington DC – May, 2020
“The Sky’s the Limit”
Remember the “Great Recession” as the newly elected President Obama termed the economic morass he inherited? Congress jumped in to pump up the economy with what we all thought was a massive cash infusion - $800 billion. The most money the Federal government had ever spent so fast. Many worried that this was too much, too fast, would saddle the country with burdensome debt. The legislation was promoted as an investment in infrastructure. Then, the government agencies charged with pushing this money out so quickly, often demonstrated ineptitude in doing so efficiently and consistent with Congressional intent. While many were critical, few were surprised; Federal agencies are just not equipped to suddenly spend huge new amounts of money that overwhelm their usual and deliberate annual spending review and selection process.
But that was NOTHING compared to what’s going on now. Already Congress (with bipartisan support) and the President have passed and signed off on four COVID-19 pandemic economic rescue bills, that total is 4 times the “Great Recession’s” $800 billion - $3 to $4 trillion. (In fact it is so much that it isn’t even possible to know exactly how much will be spent!) No surprise, considering the precedent of the “Great Recession” spending, that Federal agencies are again having trouble getting all this new money out. It’s not even all out, and the new programs (Payroll Protection, Disaster Relief, Unemployment Add-on’s, etc) implemented, and yet the House passed an additional $3 trillion, which the Senate will consider in coming weeks. However, while the initial 4 COVID stimulus bills had bipartisan support, Senate Republicans are having a hard time swallowing the idea of another $3 trillion.
So here is where the media leaves the wrong impression, once again: Media suggests debilitating partisanship here in DC. And the politicians’ statements certainly support that impression. But when it’s no longer just talk and hot air, and they actually turn to legislating, guess what? The Democratic Majority House and the Republican Majority Senate and President Trump all agreed to pass monumental trade legislation, -- the US Mexico Canada Agreement. And they have collectively and quickly passed the largest spending bills in US history -- Republicans, Democrats and the President, all together.
Looking ahead to further spending, while the media trumpets the obvious animosity between President Trump and House Speaker Pelosi, these two do seem to be of the same mind on the largest legislative issue in DC today, one that will impact our lives for years to come – how much to spend now to pump the economy? So far they seem to agree – the sky’s the limit.
Peter Friedmann’s and Ray Bucheger’s View from Washington DC
Even with Congress out of session until at least early May and virtually every Congressional staffer hunkering down at home, a tremendous amount of work has been done over the past month to address the health care and economic crisis created by COVID-19. In the span of only three weeks, Congress came together and passed three massive spending bills to expand coronavirus testing capability and federal agency COVID-19 response capacity; enhance family and sick leave, unemployment benefits and other government safety-net programs; and create funding mechanisms to keep American businesses afloat at a time when economic activity has fallen off a cliff. And that is separate from the money that states are making available to individuals and businesses and that the Federal Reserve is pumping into the economy.
While the trillions of dollars that have been made available over the past several weeks have done a lot of good, it is clear that more will be needed. In fact, barely two weeks after being stood up, the Paycheck Protection Program (PPP) – which was created by the recently enacted CARES Act to provide support to small businesses, certain non-profits and certain tribal enterprises to cover payroll expenses, mortgage interest, rent and utilities – has run out of money. This is despite the fact that Congress provided $349 billion for the program, and in spite of implementation problems that have resulted in thousands of small businesses being denied loans.
There is little question that additional money will be provided for the PPP, and there is almost universal agreement in Washington, D.C. that Congress will need to take up and pass another COVID-19 bill in the coming days or weeks. The question is when and how – those questions have exposed disagreement between the two parties with both sides asking good questions and making legitimate points. Broadly speaking, Republicans would like to inject another $251 billion into the PPP now, while Democrats prefer a more expansive approach to address other needs as well. While the stand-off continues, a lot of work is happening at the staff level to develop the next COVID-19 bill, and anything that may come after that, including a comprehensive infrastructure package that would be focused on long-term recovery and could provide billions of dollars for transit, seaports, airports, highways and rail, not to mention water infrastructure, broadband and housing.
Off the Hill, companies large and small argue that eliminating duties (aka tariffs) assessed against imports from China would free up much needed money that companies could use to keep people on payroll and cover other fixed expenses. If the China tariffs were removed retroactively, it would inject hundreds of millions of dollars back into the economy as quickly as U.S. Customs and Border Protection (CBP) could issue refunds. While efforts to remove the China-specific tariffs continue, the effort has more recently focused on simply deferring duty payments for 90 days. Under this proposal, companies would still be required to pay the tariffs – but the deferral would create much needed liquidity in the meantime . Deferral is consistent with other provisions of the CARES Act, which allow for deferral of payroll taxes, student loan payments, etc. The President has the authority to do this without an Act of Congress.
Meanwhile, most polls show a majority of Americans support erring on the side of caution when it comes to re-opening the U.S. economy, and medical experts continue to preach caution; however, there is a real concern about the economic impact of a prolonged shutdown. As a result, many senior Administration officials are pushing for some states to initiate a re-opening of their economies in the coming weeks, and President Trump has issued guidelines for states to follow when ending shelter at home orders. While scores of people were quick to say the President was moving too fast and putting too many people in harm’s way, a close reading of the White House plan shows that it is relatively conservative, requires sufficient testing and hospital capacity to be in place, and was clearly vetted by Dr. Fauci and the White House medical team. This is notwithstanding the fact that numerous states are already developing plans for re-opening, and the decision to re-open will ultimately be made by state and local officials.
A lot has changed in the past five weeks – many of you were still traveling to Washington, D.C. for annual fly-ins in early March! Similarly, a lot could change in the next five weeks. Regardless of what that change looks like, the federal government will be playing an oversized role.