Democrats Actually Learned From the Failures of 2009

The process around the 2009 stimulus and Obamacare was such a mess, not even Joe Biden wants to relive it.

The post Democrats Actually Learned From the Failures of 2009 appeared first on The Intercept.

On Wednesday, Sen. Joe Manchin appeared on MSNBC’s “Morning Joe” to talk about the state of negotiations over President Joe Biden’s Covid relief package. The network posted the video with a misleading headline: “Sen. Manchin calls for bipartisanship on Covid relief plan.”

The headline isn’t technically inaccurate. Manchin did profess a desire for Republicans to have an opportunity to shape the coming legislation, saying that he would oppose efforts to abolish the filibuster. “I’ve been in the minority when they’re jammed. It’s not the way this place is supposed to work,” he said.

But the real message Manchin delivered was a different one. He had recently spoken to Biden about the path forward, he said, and Biden was quite clear. “He basically said, ‘I don’t want to go down the path we went down in two-oh-nine when we negotiated for eight months and still didn’t have a product and had to do what we’re doing now.’ I said, ‘Fine, Mr. President, I’m happy to start this process.’”

The process he was referring to is budget reconciliation, the parliamentary avenue through which specific kinds of legislation can travel with a simple majority vote, avoiding the filibuster. And the reasoning behind it — that we can’t make the same mistake as in 2009 — marks a startling departure from the Democratic Party’s long-running inability to learn from failure. Such a take on that year’s Democratic legislative strategy would have found broad support among the most progressive elements of the party in years past, but to see it endorsed by Manchin and Biden effectively makes the assessment unanimous from left to right — arguably the most united the party has been since it was founded.

The 2009-10 term was so traumatizing to Democrats who lived through it that many, including Biden in his conversation with Manchin, have collapsed the staggering varieties of Republican obstruction of a broad range Democratic priorities — from the stimulus to Obamacare to judicial nominations to Wall Street reform — into one dark memory of an experience never to be repeated.

The 2016 presidential campaign of Sen. Bernie Sanders ushered in a new generation to Democratic politics, many of whom experienced the consequences of the 2008 financial crisis and the failure to respond to it adequately, but weren’t following the day-to-day congressional drama that produced it.

Those new to politics may be lucky enough to not even know the name Max Baucus. For those who lived through that year(-plus) on Capitol Hill, his apparition is enough to spike blood pressure to dangerous levels.

Democrats entered the 2009 congressional term with 58 members of their Senate caucus, tantalizingly — and, it would turn out, debilitatingly — close to the 60 needed to end a GOP filibuster. On April 28, 2009, Pennsylvania Sen. Arlen Specter switched to the Democratic Party. That meant 59.

Al Franken had defeated incumbent Republican Norm Coleman in Minnesota, but was not sworn in right away; Republicans cleverly litigated the election, dragging the recount out for months, knowing that each day Franken was kept from the upper chamber was worth the price of the legal costs. On July 7, 2009, Franken finally became a senator, giving the party 60.

But Sen. Ted Kennedy died six weeks later. On Feb. 4, 2010, Scott Brown was sworn in as a Republican from Massachusetts, ending the party’s super majority.

To see budget reconciliation endorsed by Manchin and Biden effectively makes the assessment unanimous from left to right.

The first order of business in 2009, as it is in 2021, was a stimulus package to get the economy, losing jobs by the millions, back on its feet. Obama, in his new memoir, “A Promised Land,” describes the pivotal meeting during the transition in which the wings were clipped off of it. Incoming White House economic adviser Christina Romer suggested a stimulus in the trillion-dollar range.

“There’s no fucking way,” Obama recalls Emanuel saying, suggesting something in the $700 billion range instead.

From then on, insider politics drove the number that Democrats would push for. In early February, Nebraska Democrat Ben Nelson said that he expected the final package to be below $800 billion, claiming that as “an economic matter” it ought not to be too robust. “For me it’s not symbolism, it’s an economic matter. At some point it’s just too big,” he said. I asked him if he felt that $800 billion was the point at which economists believed it was too large. “It’s whatever gets 60 votes, 61 votes,” he said, smiling, acknowledging that economics had nothing to do with it.

Emanuel’s prognostication had become self-fulfilling and Nelson, along with the few Republicans willing to negotiate, knew they held the cards. Budget reconciliation was available to Democrats, but they had chosen not to use it.

In talks with Sens. Specter, Olympia Snowe, and Susan Collins, the proposal was whittled down, with Collins arbitrarily insisting no funds for school construction or upgrades be included. So that was cut. The resulting $787 billion package was woefully small, leaving unemployment hovering at 10 percent by November 2010.

Obama had known two years earlier that if the economy was still struggling, his party would pay the price — yet his team had come up short. Leaving that transition meeting, David Axelrod, a close adviser, told him, “It’s going to be one hell of a midterm,” shaking his head.

Obama writes in his memoir: “This time I said nothing, admiring his occasional, almost endearing ability to state the obvious.”

In the end, Specter, still a Republican, joined Snowe and Collins in voting for the rescue package on the Senate floor in February. It came at the cost of pairing it down severely, and extending the pain of the recession. Though the economy eventually began growing slowly, millions were left out of work, and voters threw Democrats out of the House in 2010 and the Senate in 2014. The recovery plodded along. “Ten years it took, because it wasn’t deep enough and strong enough,” Majority Leader Chuck Schumer told Rachel Maddow in a recent interview. “Ten years. We’re not going to make that mistake with COVID.”

In the same interview, Schumer blasted his party’s approach to the Affordable Care Act. “Look at 200[9], where we spent a year and a half trying to get something good done, ACA, Obamacare, and we didn’t do all the other things that had to be done. We will not repeat that mistake,” he said. “We will not repeat that mistake.”

Republicans in the Senate have countered by suggesting Democrats lop off more than two-thirds of their proposal, bringing it down to $600 billion. That’s an offer the 2009 Democratic Party would have taken seriously. This time around, Montana Sen. Jon Tester, one of the handful of red-state Democrats remaining, told CNN he was fine with the price tag. “I don’t think $1.9 trillion, even though it is a boatload of money, is too much money. I think now is not the time to starve the economy,” he said.

“If it’s $1.9 trillion, so be it,” Manchin told a nonplussed Mika Brzezinski.

Max Baucus, a Democrat from Montana, was chair of the Senate Finance Committee in 2009, which, given its role in revenue policy, took the lead in drafting the Affordable Care Act. Baucus’s longtime lieutenant, Jim Messina, meanwhile, had gone to the White House as Rahm Emanuel’s deputy chief of staff. As Messina sat down to cut deals with the major stakeholders in the health care industry — Big Pharma, hospitals, medical device makers, and insurance companies — Baucus zeroed in on what he considered to be the three most likely Republicans to back what would eventually be known as Obamacare: Sens. Chuck Grassley of Iowa, Mike Enzi of Wyoming, and Olympia Snowe of Maine. In the spring, together with Democrats Jeff Bingaman of New Mexico and Kent Conrad of North Dakota, they formed the so-called Gang of Six — a half-dozen Finance Committee members who met regularly to negotiate the bill, collectively representing a population of less than 10 million. Along with much of the rest of the congressional press corps, I spent countless hours standing outside the meeting room they commandeered in the Hart Senate Office Building, collecting tidbits on their crawling backroom talks.

Let’s pause to consider what’s become of these lead Obamacare architects since. Messina became a political and corporate consultant, working for the Tories in the U.K. as part of the team that advised former Prime Minister David Cameron to put Brexit up for a vote, because it would surely lose (what could go wrong?). From there, he helped run the “Yes” campaign for the Italian Prime Minister Matteo Renzi on a referendum on a major parliamentary reorganization. He lost in a landslide and, like Cameron, Renzi resigned. Messina was then hired by new U.K. Prime Minister Theresa May’s re-election campaign, another disaster. “Jim Messina is perhaps the world’s most successful political and corporate advisor,” reads Messina’s bio at The Messina Group, declining to mention his role blowing up the United Kingdom.

Baucus, meanwhile, did not run for re-election in 2014 and was named ambassador to China by Obama. In one of the most startling jaunts through the revolving door in world history, he followed that by joining the board of the Chinese behemoth Alibaba.

But back to the Hart hallway. With each passing day, Baucus, Snowe, and others would emerge to talk about the genuine progress they were making and their hope for a light at the end of the tunnel. Senate Majority Leader Harry Reid of Nevada and White House advisers had warned Obama they weren’t serious, and were just stalling for time. “But we decided it was best to let Baucus’s process play itself out,” Obama writes in his memoir. “During an Oval Office meeting, though, I made a point of warning him not to let Grassley string him along.”

“Trust me, Mr. President,” Obama recalls Baucus saying. “Chuck [Grassley] and I have already discussed it. We’re going to have this thing done by July.”

By July, the House had indeed passed health care reform through each of its relevant committees. But the Hart meetings dragged on. “Now matter how hard we pressed, though, we couldn’t get Baucus to complete his work,” Obama writes.

So what was the hold up? Senate Minority Leader Mitch McConnell had been instructing his soldiers to drag out the talks as long as possible in hopes of killing the whole thing and bringing Obama down with it. “If we’re able to stop Obama on this, it will be his Waterloo. It will break him,” said South Carolina Sen. Jim DeMint in July, who went on to lead the Heritage Foundation.

Obama called Baucus to the White House in late July. “Time’s up, Max,” Obama says he told him. “You’ve given it your best shot. Grassley’s gone. He just hasn’t broken the news to you yet.”

“I respectfully disagree, Mr. President,” Baucus said. “I know Chuck. I think we’re this close to getting him,” he added, holding his finger and thumb an inch apart, asking to give him through the summer recess to keep working.

Mitch McConnell had been instructing his soldiers to drag out Obamacare talks as long as possible in hopes of killing the whole thing.

“A part of me wanted to get up, grab Baucus by the shoulders, and shake him till he came to his senses,” Obama writes. “I decided that this wouldn’t work.” Obama gave him until mid-September.

So lawmakers went home. At an Iowa town hall, Grassley, still an active member of the Gang of Six, trashed it, giving credence to the burgeoning conspiracy theory that government-run “death panels” were part of the bill. “You have every right to fear,” he said at the town hall, adding that we “should not have a government run plan to decide when to pull the plug on grandma.”

Obama called both Baucus and Grassley into the Oval Office. Grassley, Obama recalled, listed five objections to the bill. “Let me ask you a question, Chuck,” Obama said. “If Max took every one of your latest suggestions, could you support the bill?”

“Well…” said Grassley.

“Are there any changes — any at all — that would get us your vote?”

Obama describes an awkward silence before “Grassley looked up and met my gaze.”

“I guess not, Mr. President,” Grassley said.

In September, now several weeks past Obama’s deadline, Enzi, another charter member of the Gang, told an angry Wyoming town hall he was only in the talks in order to stall it. “If I hadn’t been involved in this process as long as I have and to the depth as I have, you would already have national health care,” he said.

Finally, in mid-October, after three weeks of public hearings and amendments, the whittled-down bill came up for a vote in the Finance Committee. Snowe voted for it, giving Obama and Baucus the bipartisan victory they had been searching for. When it finally came to the floor, on December 24, she voted no, along with every other Senate Republican. McConnell had gotten her back in line.

Then came Brown’s win on January 19, 2010, and Democrats ended up finishing the legislation using the reconciliation process. Obama signed it into law on March 23, 2010. So that the bill would appear to cost less federal money in its ten-year Congressional Budget Office analysis, however, most of the benefits were delayed. So, on the one hand, voters were warned the bill would kill grandma and that it would mean long wait times and rationed care, and they were frustrated by more than a year of dysfunction. And on the other hand, they had nothing to balance the ledger, feeling none of the upside for several years. Republicans immediately went to the Supreme Court in an effort to have it declared unconstitutional.

For some reason, Democrats would rather try a different route this time around. On“Morning Joe,” Manchin suggested a lawmaking process so reasonable that, for Senate Democrats, it’s downright radical. “If they wanna be reasonable and they wanna participate, then we work with them,” said Manchin of his GOP colleagues. “Let’s see if they have an amendment, a reasonable amendment. If they have something zeroed” — fully stripped from the package — “it gets no votes. Then the Democrats vote, and we move on.”

A legislative body debating an issue, voting, and allowing that vote to determine the outcome: It’s so crazy it just might work.

The post Democrats Actually Learned From the Failures of 2009 appeared first on The Intercept.

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