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Moderates want to cut the spending on Biden’s plan. They should remember 2010.

By Greg Sargent Washington Post

According to reports, the negotiations among Senate Democrats over President Joe Biden’s infrastructure and jobs plans are running into some turbulence. Moderate Democrats want to cut the spending levels on the plans far below what the progressives want.

So let’s lay down a marker: If moderates are going to push for a dramatic down-scaling, they should not be allowed to get away with doing so arbitrarily. They should be willing to declare exactly what they think should not be funded, defend it, and say specifically what would be wrong with spending more.

Axios and Bloomberg report that some moderates on the Senate Budget Committee – which is drawing up plans for a “reconciliation” bill to pass the “human infrastructure” portion of Biden’s agenda – want to limit that spending to around $3 trillion or $3.5 trillion. That’s substantially short of the amount that Sen. Bernie Sanders, I-Vt., the committee chair, wants.

This disagreement is not unexpected. It is a natural outgrowth of the committee’s effort to fix on an amount of spending that can win all 50 Senate Democrats – and pass with no Republican support – moderates and progressives included.

The reconciliation bill – which would include investments in climate, children and families, education and health care – is proceeding on a separate track from the bipartisan Senate bill, which includes $579 billion in new spending on “hard” infrastructure.

Ultimately what ends up in the reconciliation bill will also be determined by whether the bipartisan one passes; if not, everything will end up in it. However that is destined to play out, a resolution laying out the topline spending levels in the reconciliation measure will soon come up for a vote.

According to Bloomberg, senators like Mark Warner and Tim Kaine, both Democrats of Virginia, want to keep the spending in the reconciliation bill down.

Obviously it’s unlikely that Sanders will get the $6 trillion in spending he wants. But if moderates do insist on bringing down the levels to their preferred degree, they cannot be permitted to do so arbitrarily, on the grounds that big expenditures just seem bad, so Democrats mustn’t do them.

We’ve been down this road before.

As journalist Jonathan Cohn recounts in his monumental history of the Affordable Care Act, when Democrats were negotiating the bill in 2010, Senate and House moderates placed limits on spending levels they would countenance that seemed largely arbitrary.

Similarly, they also placed largely arbitrary limits on how much in tax increases on the wealthy they’d tolerate to pay for that spending.

“Conservative and moderate Democrats were desperate to hold down the 10-year budget figure, because they thought a big number would sound like ‘too much government’ and spook their voters,” Cohn told me.

Importantly, this had serious adverse consequences – not just policy consequences, but political ones, too. The seemingly arbitrary limit on spending, Cohn recounts, ended up translating most prominently into insufficient subsidies for coverage on the health insurance exchanges.

“You can draw a straight line from those decisions to some of the ACA’s biggest political problems,” Cohn told me. “The lower subsidies left many middle-class people paying more for their coverage, contributing to the sense of ‘rate shock’ that dogged the program.”

We cannot yet say what provisions the moderates will try to get removed from the “human infrastructure” reconciliation bill, because these negotiations are private. But it’s at least conceivable that something like this might happen again.

As Cohn notes, if the spending is kept down, it could mean, say, that the child care or elder care programs, or the investments in alternative energy or expanding college access, get underfunded. And that could politically backfire at least as violently as a “too high” spending level might.

Instead of getting “caught up on the negative consequences of spending a lot,” Cohn suggests, Democrats should instead factor in “what they would gain politically from a more successful policy and what they stand to lose politically from a less successful one.”

These differences may get resolved relatively smoothly. For various reasons, it’s perfectly plausible that the end product will be largely satisfactory to progressives, even if they don’t get everything they want. Moderates and progressives alike appear to agree that delivering on a robust agenda is essential to the success of the Biden presidency, the Democratic Party, and the future of the country.

But above all, let’s not again make the same mistake of letting arbitrary decisions about what constitutes “too much” spending set the agenda.