Senate Parliamentarian Delivers a Shock to Democrats
Senate Parliamentarian Elizabeth MacDonough this week issued a highly anticipated statement clarifying her position on the use of budget reconciliation as a way for Senate Democrats to move more of President Joe Biden’s ambitious agenda through Congress without Republican support. With the 60-vote threshold that is currently in place for most legislation under the filibuster rule, Democrats were counting on being able to use reconciliation several times to get around the insurmountable task of getting 10 Republicans on board with big pieces of priority legislation without making significant compromises.
Democrats will be permitted to pass a reconciliation package once more this calendar year, which changes the plans they had to divide up and pass the $2.3 trillion American Jobs Plan and the $1.8 trillion American Families Plan, not to mention other administration priorities like expanding Medicaid, through multiple budget reconciliation packages. Basically, after months of back-and-forth, the party in power is back where they were in March when they thought they would have one more shot at a reconciliation package after they used the process to pass the $1.9 trillion American Rescue Plan on a party-line vote. Learn more about the 2022 Senate Predictions
The decision also clarified that a budget reconciliation resolution, unlike a regular budget resolution, cannot be automatically discharged from the Senate Budget Committee without a markup – which would require at least one Republican to support the move in the evenly-divided committee. This is a problem unique to the Senate’s 50-50 split. If either party controlled one more seat, it would give them an advantage of at least one seat on all committees.
In her decision, the parliamentarian warned that allowing for the maneuver the Democrats were planning would risk “eroding the budget process.” She also warned that the drafters of the 1974 Congressional Budget Act were leery of potential abuse of the power to revise budget resolutions, adding, “the potential for abuse was clear in 1974 and is all the more obvious now.”
In non-Senate speak, all this means is that any of Biden’s legislative priorities that don’t make it into one (most likely massive) reconciliation package will have to wait until next year. This is frustrating many Democrats and the progressive faction of the party who sees this year as the prime time to get their ambitious agenda through Congress before next year’s midterm elections that could shake up the power balance in Washington.
Market Data at 8 a.m. EDT: Will the Senate end filibuster on any bill with less than 3/5 support in 2021?
This leads us to the real issue at the root of the use of reconciliation to begin with – the Senate filibuster threshold. There’s more pressure now than ever before on moderate Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) – the Democratic holdouts who so far are standing firm on their intention to keep the filibuster in place. Senate Majority Leader Chuck Schumer (D-NY) needs a united caucus to get rid of it, and so far, he hasn’t pushed the issue because he knows he doesn’t have the votes.
“The US Senate is the only institution in the world where a vote of 59-41 can be considered a defeat instead of a huge victory. Enough is enough. Let us change the outdated rules of the Senate, end the filibuster and pass a bold agenda for working families with majority vote.” — Sen. Bernie Sanders (I-VT)
Republicans recently used their filibuster power for the first time this year to block legislation to form a bipartisan commission to investigate the attack on the US Capitol on Jan. 6.
Schumer hasn’t explicitly come out in favor of gutting the filibuster, but has said that “everything is on the table” and recently warned to his caucus that “we have also seen the limits of bipartisanship and the resurgence of Republican obstructionism,” a change in rhetoric that could signal he’s preparing his party for filibuster reform.
Sinema sparked backlash from members of her party this week when she doubled down on her defense of the filibuster at a public event alongside Sen. John Cornyn (R-TX), who is one of the majority of Republicans who voted against the Jan. 6 Commission.
“To those who say that we must make a choice between the filibuster and ‘X,’ I say, this is a false choice…The way to fix that is to fix your behavior, not to eliminate the rules or change the rules, but to change the behavior.” — Sen. Kyrsten Sinema (D-AZ)
Manchin also hasn’t budged in his support for keeping the filibuster. Even when it became clear that Republicans were going to use the filibuster to their benefit, when asked if he would reconsider Manchin reiterated, “I’m not willing to destroy our government, no.” Manchin has incentive to not yield to the pressure from his party, as he represents a state that former President Donald Trump carried with 69% of the vote last year.
Biden is reportedly at his wits end this week and resorted to a “new strategy” of reaching out personally to the moderate hold-outs following other lawmakers pleas for him to get involved, and then later in the week publicly shaming them. Speaking of himself in the third person, he said, “Biden only has a majority of effectively four votes in the House, and a tie in the Senate – with two members of the Senate who voted more with my Republican friends.” Despite being factually incorrect, definitely puts Manchin and Sinema on notice from the top.
Market Data at 8 a.m. EDT: Which party will win the House in the 2022 election?
Market Pulse: In the first day of trading, the market asking if the Senate will use the budget reconciliation maneuver before the Senate’s end-of-summer Labor Day recess opened at 31¢ and shifted down slightly to 30¢ by the end of the day. Other Senate recesses over the summer mean that there aren’t a lot of in-session days within this two-month timeframe, which could potentially be a reason for the low starting price.
The odds of the Senate ending the 60-vote filibuster are back on the upswing this week, with a small drop mid-week, ending Thursday at 20¢. That’s a substantial change from a low of 9¢ on May 18 considering the market topped out at 26¢ over the last three months. As long as Manchin and Sinema continue to make statements in support of the filibuster, there isn’t much hope of this market breaking out of the 20s.
In the background of all political decisions is the next election on the horizon, and the 2022 midterms are no different. Traders still have Democrats eeking out majority control in the Senate with 51¢ compared to Republicans at 50¢. In the other chamber, Republicans are heavily favored to win the majority in the House – with 68¢ to Democrats’ 34¢. Unlike the Senate, where Republicans just barely came out ahead of Democrats for a day or two, they’ve been leading the House market with a significant margin for the life of the market.
Possibly as a way of hedging their bets against the possibility that Republicans do win control in the Senate, traders give the likeliest outcome of the balance of power in Congress after the 2022 elections to Republican majorities in both chambers – though this far out, trader confidence is low on any outcome. Republican House and Senate is at 39¢, Republican House and Democrat Senate is next at 30¢, Democrats controlling both chambers is at 26¢ and Democrats keeping control of the House but not the Senate trails far behind at 12¢.
Israeli Prime Minister Benjamin Netanyahu. Photo: US State Department / Flickr / Public Domain.
Has Israel Moved On From Netanyahu?
Israeli Prime Minister Benjamin Netanyahu’s most powerful opponents announced Wednesday night, shortly before a midnight deadline, that they had reached a deal to form a new governing coalition. The coalition paves the way for the ouster of Israel’s longtime leader and, for now, staves off a possible fifth consecutive election in just two years.
The deal, between opposition leader Yair Lapid and his main coalition partner, Naftali Bennett, still requires approval by Israel’s parliament, the Knesset, in a vote that’s expected to take place early next week. So, while the move appears to be final, there is still plenty of time for the tenuous arrangement between wide-ranging political factions to fall apart. You can bet that’s what Netanyahu will be hoping for.
Under the agreement, Bennett, a one-time Netanyahu aide and leader of the far-right Yamina party, and Lapid, a former journalist and the leader of the centrist Yesh Atid party, will split the job of prime minister. Bennett will serve the first two years and Lapid the final two years. The historic deal also includes a small Islamist party, the United Arab List, which was necessary to give the coalition a majority of 61 seats and would make it the first Arab party ever to be part of a governing coalition.
Israel also elected a new president on Tuesday, Isaac Herzog, a veteran politician and the scion of a prominent Israeli family. The president in Israel is a largely ceremonial role that is meant to serve as the nation’s moral compass and promote unity. Though the position does and can play an integral role in deciding who receives a mandate to form government after an election. Herzog succeeds Reuven Rivlin, who leaves office next month at the end of a seven-year term. Rivlin has played a prominent role over the past two years.
Netanyahu is expected to continue campaigning on his behalf up until the Knesset vote to put pressure on all parties involved in the coalition. Knesset Speaker Yariv Levin, a member of Netanyahu’s Likud party, also has significant power to potentially delay the parliamentary vote.
Netanyahu has been the most dominant player in Israeli politics for three decades – serving as prime minister since 2009, in addition to an earlier term in the 1990s. Each of the elections in the last two years has been seen as a referendum on his leadership, and each has ended in a deadlock, with opponents falling short of a majority coalition.
