With Big Plans And Small Margins, Can Democrats Pull Off Their Agenda? : The NPR Politics Podcast Progressives feel as though their job compromising on the $3.5 trillion dollar budget bill is done, while Sens. Joe Manchin and Kyrsten Sinema say the package is still too big. Looming over it all, a chance the federal government defaults on its debt as Republicans signal they won't cooperate on raising or suspending the debt ceiling.

This episode: White House correspondent Scott Detrow, congressional correspondent Kelsey Snell, and acting congressional correspondent Deirdre Walsh.

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With Big Plans And Small Margins, Can Democrats Pull Off Their Agenda?

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CHRIS: Hi. This is Chris (ph), and I'm here with my 9-month-old son, Quinn (ph), who's been playing with our window crank for the past 15 minutes before he goes to bed. You're listening to the NPR POLITICS PODCAST, which was recorded at...

SCOTT DETROW, HOST:

It's 2:12 Eastern on Wednesday, September 15.

CHRIS: Things may have changed by the time you hear this, and hopefully Quinn will be sleeping. All right. Here's the show.

(SOUNDBITE OF THE BIG TOP ORCHESTRA'S "TEETER BOARD: FOLIES BERGERE (MARCH AND TWO-STEP)")

DETROW: Listen. There's a lot worse way to fill that between-about-to-go-to-bed-and-going-to-bed gap.

KELSEY SNELL, BYLINE: That's pretty good.

DEIRDRE WALSH, BYLINE: You never know what a toy can be in a house.

DETROW: Yeah. Hey there. It's the NPR POLITICS PODCAST. I'm Scott Detrow. I cover the White House.

SNELL: I'm Kelsey Snell. I cover Congress.

WALSH: And I'm Deirdre Walsh. I also cover Congress.

DETROW: Well, it's a good thing you both cover Congress because that's what we're talking about today.

SNELL: Convenient that way.

DETROW: So just to set it up, the centerpiece of President Biden's domestic agenda is being drafted right this very minute in Congress right now. It is a $3.5 trillion budget bill with major climate initiatives, big changes to the tax code and a lot of other things. And we have talked about it a lot, but it's in a critical stretch right now, and the path forward is really unclear. One person that's making that path forward unclear is West Virginia Democrat Joe Manchin. He remains skeptical of the bill. Of course, in a 50-50 Senate, his vote matters a lot. And here he is on CNN this weekend.

(SOUNDBITE OF ARCHIVED RECORDING)

JOE MANCHIN: What's the urgency? What's the urgency that we have? It's not the same urgency that we have with the American Rescue Plan. We got that out the door quick. Yeah, that was about $2 billion - $2 trillion.

DETROW: Kelsey, I'll start with you. Let's answer Senator Manchin's question. What is the urgency, at least as far as Democratic leaders are concerned?

SNELL: Well, this is essentially Biden's entire domestic agenda wrapped up in one massive bill. So for them, the urgency is delivering on basically any of the promises that he and they made to voters in the last election before we - and I always hate when I say this at this time of year or really any time of year - wind up in an another election year, which is coming really, really, really fast.

DETROW: Yeah.

SNELL: So there is also a lot on the line for them in terms of, you know, being able to make up some economic ground here. Biden is is struggling against messages from Republicans that he's responsible for inflation, for prices going up in the country. There is a lot of, you know, concern that there are some negative long-term effects that could be happening in the economy right now, and Democrats want to respond with their own positive news.

WALSH: They also worry about the political reality. I mean, they only hold a very narrow margin in the House and, as you said, a 50-50 even split in the Senate. So they look at the 2022 midterms on the horizon and worry if they don't get this done now, the chances of them being able to advance something this ambitious really could fade away. And the window for legislating before we get into like the real nuts and bolts of the midterm elections is really going to fade after the fall.

DETROW: Yeah. You know, we've talked a bit about the just horrific cascade of natural disasters this country experienced over the past few months - intense flooding, intense wildfires, intense heat, lots of other things - and a real awareness that the changed and changing climate is magnifying all of these things. But at the same time, Manchin specifically is hesitant about a lot of these big climate provisions. What specifically is he opposed to right now? And is there a middle ground between that reservation and something that, say, Bernie Sanders is pushing for?

WALSH: One thing that Manchin specifically pointed to this weekend was the climate provisions that would give tax credits to businesses to shift to greener technologies. His argument is that industries are already doing this on their own, and the federal government shouldn't be giving out new tax credits to do that. Obviously, you know, Manchin is from West Virginia. It's a state with a heavy fossil fuel industry, coal companies. Fossil fuel interests are sort of top of mind for him. So, you know, those are the people that he is listening to. Democrats from other states are saying those transitions to greener technologies are not happening as quickly, and the government needs to step in and provide new mandates and new tax incentives to make them happen quicker.

DETROW: Yeah. And, Kelsey, I want to take a long Slack conversation that we had and transplant it into this podcast, if that works for you.

SNELL: Yeah, let's do it.

DETROW: So let's just set this up - right? - because we've talked so much about the tight margins, just a handful of votes in the House, 50-50 in the Senate with the vice president breaking ties and how the bill - how leaders are trying to appeal to the moderates. But it cuts both ways. If this goes too far to make the Manchins of the world happy - and it is worth pointing out there are other moderates in that camp as well - progressives might bolt. Here's Vermont Senator Bernie Sanders also talking to CNN earlier this week.

(SOUNDBITE OF ARCHIVED RECORDING)

ANDERSON COOPER: So 3 1/2 trillion for you, that's - it can't go lower than that.

BERNIE SANDERS: No. And, in fact, as you know, we compromised already. Most of the members of the caucus wanted 6 trillion, which is a more appropriate number.

DETROW: Kelsey, you were saying that usually everyone within a party is on the same page, that proposals start really big and they get winnowed down because that's just how negotiating works. But things seem different this time. Why?

SNELL: Yeah. I mean, usually the president sets a really big public goal. And then, you know, everybody's kind of playing their part over in Congress. There are people who are mad. They want it to be less aggressive. There are people who agree with the president, but ultimately they kind of worked their way to a middle ground. But in this situation, a lot of progressives feel like they are owed something here. They feel like the negotiation happened when they moved from that $6 trillion that Bernie Sanders was talking about down to the $3.5 trillion that they're at right now. They say that was the negotiation.

You know, they also gave up things in order to get that $1 trillion bipartisan bill through. You know, progressives think that they are responsible for delivering the presidency to Biden, and they want to be able to fulfill a lot of the promises to their own voters. So they're trying to thread a needle between, you know, like you said, keeping Joe Manchin on board, but also, if they lose four, five, six, seven progressives, well, then this bill can't pass, either. So it is one of the more delicate negotiations that I have watched happen since I've been covering Congress.

DETROW: Deirdre, do you think the fact that over the past month - right? - President Biden's popularity has dropped a bit. Democrats are worried. They're feeling a bit more vulnerable next year. Do you think that vulnerability makes these both sides more or less likely to say, OK, let's figure something out? Because I could see on one hand, look, we need to get something done. We might not be in the majority much longer. And on the other hand, if we might not be in the majority much longer, we need to do as much as possible and not compromise.

WALSH: I think for the Democrats that are running for reelection in competitive districts, it makes them sort of less likely to go all-in on this proposal because they're hearing the arguments that this could make inflation worse. They are feeling most vulnerable about increasing prices for things like gas and groceries. And so they feel like, am I going to walk the plank on a $3.5 trillion dollar bill, you know, as a House Democrat, when Joe Manchin and, you know, Arizona Democrat Kyrsten Sinema are talking about something much smaller?

So I think that there's a little reticence there that they're the ones that are going to have to face the political music for the size and scope of this package. But like you said, on the flip side, the progressives are saying, like, this is our shot. This is what we campaigned as a party and as, you know, as Joe Biden, our nominee. And it's our job to deliver.

DETROW: Yeah. All right. We're going to take a quick break. When we come back, we will talk about the other stuff on Congress's plate, including a possible big looming financial disaster. That would be the debt ceiling. We'll be right back.

WALSH: (Whispering) Disaster.

SNELL: (Laughter).

(SOUNDBITE OF MUSIC)

DETROW: We are back. And even as the House and Senate work on this massive, massive budget bill, there is another big looming deadline and that is the fight over the debt ceiling. Let's just start with the basics. Remind us what the debt ceiling is, why there is a deadline, what the main issue is here.

WALSH: Well, the debt limit is the amount of money that Congress authorizes the Treasury Department to borrow to keep the government agencies running. So the last time they raised the debt limit was in a deal in 2019, and we're bumping up to that limit now. Treasury Secretary Janet Yellen is telling Congress that she thinks she can use some maneuvers to keep the government agencies running through sometime in mid-October, maybe later, depending on how much kind of money the government brings in. But so that's where we are. Congress has to vote to raise that limit, and it has become a more and more controversial vote over the last few years.

DETROW: Well, I will be honest with both of you. Over the past decade or so, you know, this has often become a brinkmanship-type event. You hear all of these dire warnings about how bad this would be for the economy. You see people posturing. And then ultimately, at the very last minute, the issue is solved. So ever since I stopped covering Congress, I have just kind of mentally tuned out to this issue until the last possible moment. Why am I wrong to do that this time? What is different this time?

SNELL: Well, this time, there are a couple of things happening. One is the threat that always happens with the debt limit, and that is default. And, you know, that may sound very distant. But if the federal government were to default or be unable to pay its debts, that would be really bad for people, not just, you know, the Social Security payments that probably wouldn't be able to go out or salaries for civilian federal employees, but people just trying to borrow money. It would be really hard if, say, you needed to buy a car or a house, and there was a, you know, a default on the federal obligations. That could make your ability to borrow money harder.

You know, another part of this that is a little bit more distant but still probably very salient to people is that there are long-term economic consequences to Congress having a fight over the debt limit. You know, back during the 2011 and 2013 standoffs, it really did cost the federal government a lot of money. In 2011, there was an estimate that the debt ceiling standoff raised borrowing costs by a total of $1.3 billion in the following fiscal year. And the 2013 fight led to costs of over a one-year period between 38 million and more than 70 million for the federal government. So this is not small potatoes fight.

DETROW: Plus, the economy is so fragile and weird right now, I imagine that would not help that.

SNELL: Right.

WALSH: Right. And like Kelsey said, interest rates are something that people have an eye on, right? And interest rates could go up. I mean, it sounds like something that won't affect most people like, oh, the credit rating of the United States could be downgraded. I mean, that actually happened in that standoff that Kelsey talked about in 2011. It was the first time in history that it ever happened. And I think then there were a couple of different scenarios to get out of it. This time, it's less clear to me how Democrats convince Republicans to vote for any kind of package that raises the debt ceiling. They are saying not this time. We're not going to do it.

SNELL: Yeah, they're really dug in. And Senate Minority Leader Mitch McConnell has basically said he is not going to go along with agreeing to raise the debt limit so long as Democrats are talking about any new spending. And I have not often seen scenarios where McConnell gets so explicit about a promise or something that he will or will not do and then have not followed through on. He's not the kind of person who makes a big political statement in public and then doesn't follow through.

So Democrats may have to figure out how to do this all on their own, which, you know, that is really hard right now because they're also trying to figure out how to keep the federal government open at the end of September. And these two things are becoming increasingly tied together. So not only are we talking about the possibility of, you know, the federal government not paying its bills, well, we're also talking about the possibility of the federal government not even being open to pay the bills.

DETROW: When is the next new milestone that we should look toward to get a sense of whether this is getting solved or getting worse?

SNELL: The next couple of weeks are really what we're watching. September 30 is the end of the fiscal year, when Congress needs to figure out whether or not the government is going to stay open.

WALSH: I think the one thing that Democrats think may help them is they're trying to add money for recent natural disasters like Hurricane Ida and money for refugee programs for people coming into the U.S. from Afghanistan to that big package that Kelsey mentioned. And I think a lot of Democrats think, like, Republicans from states like Louisiana won't be able to vote no on that, so that if it's wrapped with the debt ceiling, they can attract some votes that way. But I'm not sure that's going to work.

SNELL: It's our favorite congressional logic that if you can't get people on board with a pretty big bill, make it a super big bill and hope that they can't run away.

DETROW: All right. That is all that we have time for today. I did want to mention before we go, since we covered it on the podcast before, California Governor Gavin Newsom did keep his job. He survived a recall effort by a pretty substantial margin yesterday, according to The Associated Press. More on that wherever you get your NPR - on the web, on the radio, in your podcasts, in the air.

I'm Scott Detrow. I cover the White House.

SNELL: I'm Kelsey Snell. I cover Congress.

WALSH: And I'm Deirdre Walsh. I also cover Congress.

DETROW: Thank you for listening to the NPR POLITICS PODCAST.

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