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The Democrats Screwed Up

Nancy Pelosi and other party leaders have been outflanked by opponents embracing big spending ideas to address the coronavirus recession.

Alex Wong/Getty Images

After former Spanish Prime Minister José Luis Rodríguez Zapatero met with Joe Biden in 2010, two words stuck with him: tears and suffering.

That’s according to Zapatero’s 2013 memoir, The Dilemma. The two met at the Prime Minister’s residence on the outskirts of Madrid. The meeting was intended as a show of gratitude from the United States about Spain’s involvement in Afghanistan. But the conversation quickly turned to the eurozone, as several countries dealt with the extended fallout of the global financial crisis. “In giving his opinion on the markets,” Zapatero wrote of Biden, “he told me, with a harshness that until then I had not heard, that the only way to gain their trust was by making decisions that made you suffer truly and thoroughly. That you are only credible in certain circumstances if you subject citizens to difficult tests, if the unions openly reject your policy, in short, if there are tears and suffering. I was struck by his message, for its frankness and its toughness. Tears and suffering.”

Zapatero—who ruled with Spain’s center-left Socialist Workers Party, or PSOE—would become the face of that country’s punishing austerity cutbacks, enacted under mounting pressure from the International Monetary Fund and European Commission. The meeting with Biden, as recalled by Zapatero, occurred just days before the Spanish prime minister announced he would cut civil service pay by 5 percent, enact a hiring freeze, slash public sector investment by six billion euros, and freeze pension payments. Obama—who himself pivoted from stimulus to deficit-cutting that year, urging European partners to do the same—encouraged Zapatero to take such “resolute action.”

Now in power again a decade later, Spain’s PSOE has moved left in recent years and rejected austerity; American Democrats, out of power, mostly haven’t, though there are certainly plenty of people trying to make that happen. With big, universal programs as popular as ever among Democratic voters, some of the party leaders’ lingering commitment to so-called fiscal responsibility could mean wasting a crisis in which Democrats could, in theory, do better than they have in years.

As the coronavirus spread and its economic fallout worsened, Democrats, it’s worth noting, were miles ahead of the GOP on the need for a spending package worth hundreds of billions of dollars, calling for that even as the White House continued to pass the coronavirus off as a hoax they’d already contained. But while they were quick to realize the severity of the situation, and while their responses have been on the whole more egalitarian, there’s plenty to be desired about how the party’s elder statesmen have navigated this moment. What should be a pretty easy situation for them to find an electoral silver lining in has been anything but.

Their opponents in the alleged party of small government put forward a shambolic response to the onset of the coronavirus crisis that could end up costing tens of thousands of lives, if not more, after Trump fired the White House’s pandemic response team in 2018; late Thursday and early Friday news emerged that three GOP senators and one Democratic senator had been caught making millions of dollars’ worth of stock market deals after a closed-door briefing. The dogma Republicans have preached since the days of Ronald Reagan on the need for a diminutive public sector is crumbling, as GOP politicians scramble to suggest cash payments reminiscent of universal basic income proposals and invoke historic government-led mobilization efforts such as the Korean War–era Defense Production Act, the latter after calls from Democrats. Trump’s saving grace—a relatively strong economy, at least on paper—is crumbling too, and fast.

Yet instead of reclaiming their place as the party of the New Deal, several senior Democratic lawmakers seem stuck in a different decade. The mantra of New Democrats like Al Gore, Michael Dukakis, and Bill Clinton in that era was that the “solutions of the thirties will not solve the problems of the eighties.” They pushed for the party to embrace market-based solutions and reject Roosevelt and Truman’s big welfare state policies as they triangulated around Reaganomics. But as the U.S. and perhaps the world currently face what might be the worst economic downturn since the 1930s, the solutions of the 1980s couldn’t be worse suited to solve the problems of the 2020s.

Biden has been mostly missing in action. An initial stimulus package House Speaker Nancy Pelosi negotiated with the White House will guarantee paid leave to fewer than 20 percent of workers, scaling back an already weak agreement “following pressure from businesses worried about financial burdens,” according to the Wall Street Journal. Republican Senator Mitt Romney early on proposed cash aid to American citizens. But Pelosi reportedly shot down calls from former Obama administration economic chief Jason Furman last week for universal cash payments, arguing for so-called means testing, so as to send cash only to families in most need. The move would likely delay cash for the sake of shrinking its budgetary footprint—all as unemployment skyrockets toward levels not seen since the Great Depression. Romney, progressive Representative Katie Porter told The Atlantic this week, has been more open to working with her on quick and universal cash payments than Pelosi has been. As Eric Levitz wrote in New York magazine, “Pelosi was evincing a preference for allowing some of those drowning to go without life preservers, if that’s what it took to prevent wasting preservers on those who were perfectly capable of swimming to shore on their own.”

Cash payments aren’t the only area where Democrats are losing face. Treasury Secretary Steve Mnuchin, for example, has been adamant that deficits simply don’t matter. The administration announced yesterday that it would halt foreclosures and evictions performed by federal agencies. That’s a half-measure—still leaving banks free to kick people out on to the street. But it’s still a bigger gesture of support to struggling homeowners than the Obama administration’s Home Affordable Modification Program, effectively a handout to mortgage service companies in the hopes that they would offer aid.

For the GOP, broadcast worries about deficits and the size of government have always been highly suspect: Republican presidents from Reagan to Bush II to Trump were big deficit spenders, even as Republican lawmakers repeatedly made hay about the size of American deficit spending once a Democrat took over the White House. Amid the coronavirus crisis, they’ve dropped the mask entirely, even as their big-ticket proposals for how to get out of this mess remain a disaster: cruelly shaving payouts for those without federal tax liability while giving generous handouts to corporations. After some 40 years of this market-forward script, though, many Democrats have internalized the story that government meddling in the economy does more harm than good and budgets should be as lean as possible. Besides Pelosi, several other Democrats have pushed means-tested measures, despite a crisis that could produce a 20 percent unemployment rate.

There are some hopeful signs that New Democrat–style technocracy is starting to ebb. Younger members like Representative Ilhan Omar have proposed more ambitious aid packages, focused on extending universal benefits for longer-term stability, while stopping a bailout for fossil fuel executives. Yet this year, the top of the Democratic ticket will likely feature a longtime deficit hawk primed to let another crisis go to waste. Early signs don’t look great: New polling from ABC News finds that 55 percent of voters now approve of how Trump has handled this crisis. Come November, that could spell more tears and suffering.