Do congressional Republicans want to prolong the recession to hurt President-elect Joe Biden?
Four years ago, I might have judged any such conclusion to be too cynical. But after watching Republican officeholders denigrate face masks during a deadly pandemic and parrot President Donald Trump’s deluded claim that he won reelection on November 3, I no longer consider a pro-recession GOP to stand outside the realm of possibility.
The occasion for this speculation is the last-minute Covid-19 stimulus deal that Congress has cobbled together for the holiday season. Bowing to Senate Majority Leader Mitch McConnell, congressional Democrats are preparing to sign on to a stimulus package of nearly $900 billion that excludes the Democrats’ proposed aid to state and local governments ($436 billion in the House-passed Heroes Act, $160 billion in a subsequent bipartisan package). In exchange, McConnell has withdrawn his wildly irresponsible liability shield for businesses that fail to protect workers adequately from Covid-19.
We can all be grateful that employer indemnification has been jettisoned, and if the resulting bill really is the best Democrats can do right now, then by all means let’s get it passed. A $300 weekly sweetener to unemployment benefits, down from the $600 paid out through July, is better than nothing. (I still think Democrats would have ended up with more if they hadn’t started dealing away this benefit in July.)
But if it came as some surprise to me to find out that the Democrats couldn’t make a better deal, that’s because I never thought congressional Republicans really meant it when they refused to consider pandemic aid to state and local governments. Conservatives profess to believe that outside of defense spending, the only governance of any value occurs at the state and local level. President Richard Nixon was all about sending federal money to the states instead of governing from Washington. President Ronald Reagan made a habit of repeating Nixon’s “New Federalism” mantra (though when Reagan did it he consolidated the spending into block grants that quietly reduced the aid).
Trump took a more crudely partisan approach. In April, he tweeted: “Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help?”
At the time, Covid-19 did look like a crisis that was mostly concentrated in blue states and big cities. But by now it’s become painfully clear that red states need a federal bailout even more than the blue ones. Writing in The New York Times on December 4, Patty Cohen reported that six of the seven states in the most desperate financial straits were “led by Republican governors and won by President Trump this year.”
Why didn’t Republican members of Congress take note?
Consider, too, what it is state and local governments spend their money on. Very little of it is politically controversial. “Around 40 percent is education or infrastructure,” New York Times columnist Paul Krugman tweeted in September. Ten percent is health care, no small consideration when the cause of the economic turmoil is a deadly pandemic. Four percent is spent on police! “Defund the Police?” read a Politico headline in August. “It’s already happening thanks to the Covid-19 budget crunch.” The blame couldn’t be laid at the feet of leftist radicals who had seized control of statehouses. This was the doing of stingy congressional Republicans.
None of this makes any political sense unless you look at it through the prism of economics.
State and local government represents a significant part of the economy, supplying nearly 19 percent of gross domestic product and more than 21 percent of personal income. Starve state and local government coffers, and you make economic recovery more difficult to achieve, and slower when it finally comes. States were very slow to rehire workers after the 2007–2009 Great Recession, and that was a major reason the recovery was so anemic. Any legislator paying even casual attention knows this.
Now let’s review the Republican stance on aid to state and local governments.
In March, the Senate passed the Cares Act, which included $150 billion for state and local aid. The vote was 96–0; not a single Republican opposed the bill. (Four Republicans didn’t vote because they either had the coronavirus, feared they might have it, or had been exposed to it.) Trump had taken some bad missteps on Covid-19, but it was still possible to believe that his management of the crisis might prove adequate, if not inspired, thus securing his reelection. A March 29 Washington Post-ABC News poll suggested a possible Trump comeback, with Biden up only 2 points among registered voters. “Trump has moved from what was a seven-point deficit in February,” reported the Post, “to a near tie with Biden today.”
In March, a partisan Republican calculus on whether to assist state and local governments might have been screw ’em, it’s only the blue states. That’s what Trump would be saying out loud the following month. But there was also much reason to fear that a second Great Depression was brewing, for which Trump would be blamed and with which Trump could be saddled during a second term. So congressional Republicans voted for the aid.
By July, though, the calculus had shifted. The economy had recovered somewhat, but everyone knew its fate would be tied to the pandemic, and therefore to pandemic relief. Meanwhile, a second Trump term was looking much less likely. Biden’s lead was now in the double digits. It was about this time that congressional Republicans started remembering they were supposed to be deficit hawks, as they reliably do whenever a Democrat gets within shouting distance of the Oval Office.
Now congressional Republicans know a Democrat will be the next president—even those who still pretend they don’t. That means that going forward, a lousy economy can be blamed on Biden.
It would be risky for Republicans to move too obviously to impede economic recovery, but most voters have little understanding that state and local government spending is an engine of economic recovery. It’s just government, and government is inherently wasteful, right? And so it’s possible for Republican members of Congress to tighten the spigot, ever so gently. Few voters will blame them. They’ll blame Biden. And if McConnell didn’t hesitate to say, in 2010, when the economy was struggling to recover from the Great Recession, “The single most important thing we want to achieve is for President Obama to be a one-term president,” why would he think any differently about Biden?