Analysis: Mitch McConnell stands in the way of Biden's economic recovery plans

[December 10, 2020]  By David Lawder and Heather Timmons

WASHINGTON (Reuters) - President-elect Joe Biden has promised to revive a coronavirus-ravaged economy, repair creaky American infrastructure and put millions back to work, but unless Democrats win Senate run-off elections in Georgia in January, it will all run through one man: Senate Majority Leader Mitch McConnell.

If Republicans retain control, McConnell, 78, a veteran senator from Kentucky, the 28th-largest U.S. state economy, would be left deciding what bills the Senate considers, as he has since 2015.

"What we don't know is 'What does Mitch McConnell want?’” said Matt Bennett, co-founder of Third Way, a centrist Democratic consultancy. If McConnell doesn't want anything except to stand in Biden's way, "then it is going to be a long four years for America," he said.

McConnell has long decried "big government" programs that Biden highlighted in his campaign, like a jobs plan tied with new climate-friendly infrastructure. As majority leader, he could stop the bills needed to fund them from even coming up for a vote; even if Democrats win both run-off races for Senate seats from Georgia he can galvanize his party against bills that would need Republican votes to pass.

His potential to obstruct is so huge, that Biden himself told a New York Times columnist on Dec. 2 that how much the new administration can achieve will depend largely on how McConnell and congressional Republicans behave. Biden has tapped Louisiana congressman Cedric Richmond to liaise with conservatives.

The coronavirus-related recession wiped out a year of economic growth and five years of job creation, while pushing millions into unemployment and leaving small businesses teetering on the edge of bankruptcy. Hunger and homelessness are rising, and state governments may be forced to slash jobs and budgets in the months to come.

On Wednesday, McConnell said lawmakers were still looking for a path toward agreement on COVID-19 aid; some Democrats said he is a major obstacle.

The influence McConnell exerts over the U.S. economy is worrying, some critics say. "The outsized power of Mitchell illustrates how dysfunctional U.S. institutions have become," French economist Thomas Piketty told Reuters in an email. "In effect small constituencies have more power than large popular majorities," he wrote.

"It's worth noting that EU institutions are also dysfunctional, partly for the same reasons: too much veto power is let to states with little population, whether it is Luxembourg or Hungary," Piketty added.

CONGRESSIONAL BLOCKADE

"The question is what McConnell thinks is in his interest that Biden is proposing," said Larry Sabato, director of the Center for Politics at the University of Virginia, who believes McConnell will support one more stimulus. "He wants to pass one thing, so he can keep pointing to it and say he reached a compromise."

But Sabato said McConnell is unlikely to support much more of Biden's agenda. "He'll always try to water it down, and when he can kill things outright, he'll do it. He's proven that over and over again."

Republicans have threatened to block some of Biden's Cabinet appointments, a break with tradition that echoes his treatment of President Barack Obama's Supreme Court pick.

There may be some room to negotiate around Republican priorities, such as making expiring tax provisions permanent, or improving infrastructure in rural areas, analysts say.

Biden otherwise would have to rely heavily on executive orders that he would need to defend before a "hostile judiciary" stacked with Trump-nominated judges, Third Way's Bennett said.

U.S. Senate Majority Leader Mitch McConnell (R-KY) speaks to reporters as Senate Republican leaders hold a news conference on Capitol Hill in Washington, U.S., December 1, 2020. REUTERS/Kevin Lamarque/Pool/File Photo

A McConnell spokesman did not respond to questions regarding how he might work with the Biden administration. McConnell has said little directly about Biden's agenda, including in a debate  against the Senate opponent he defeated in November.

But major legislation outside of budget reconciliation rules, such as emergency COVID-19 spending, would require 60 votes to clear procedural hurdles, meaning that the Biden team would need to win over 10 or more other Republicans, and McConnell will be constrained by his caucus.

"When McConnell senses the votes among Republicans are there to do something, I fully expect him to work with Biden," said Jon Lieber, a former economic policy adviser to McConnell, now managing director of the Eurasia Group political risk consultancy.

"And when he senses that they aren't there, he can't force a deal when none exists. He's not going to pass bills with two Republicans and 48 Democrats."

RELATIONSHIPS WON'T MATTER

Biden and McConnell served 24 years in the Senate together, and negotiated directly during major partisan fiscal and government shutdown fights of the past decade, working out the 2012 "fiscal cliff" deal  that allowed the highest individual tax rate to increase and canceled massive, across-the-board spending cuts.

In his 2016 autobiography, "The Long Game, A Memoir," McConnell called Biden someone he "liked" and "someone I could work with." Still, he has yet to officially acknowledge Biden's presidential win, or congratulate him, and most of the Republicans in Congress are following suit.

It's unclear whether Biden will resume the direct negotiating role he played as vice president with McConnell and other Republican leaders.

Vice President-elect Kamala Harris was often at the opposite end of the Senate partisan divide from McConnell, and in a December 2019 opinion  piece, she accused McConnell of failing to honor his oath of office by preventing witnesses from testifying at Trump's impeachment trial early this year.

"Mr. McConnell doesn’t want a Senate trial. He wants a Senate cover-up," Harris wrote.

Treasury Secretary nominee Janet Yellen is expected to play an important role in making the economic arguments behind some of Biden's more progressive policies that promote diversity and increased spending on child care and education as a way to boost employment.

But no one expects her to win over McConnell.

Yellen had little direct negotiating experience on Capitol Hill as Federal Reserve chair and McConnell in 2013 opposed her appointment to that post, expressing concerns that she wasn't supportive enough of a strong dollar.

"I don’t think Janet Yellen is a natural lobbyist," said Tony Fratto, a former Bush-era Treasury and White House spokesman.

(Reporting by David Lawder and Heather Timmons, Additional reporting by Richard Cowan; Editing by Dan Burns and Andrea Ricci)
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