How President-Elect Biden Could Cut Poverty in Half Without the GOP
Vox’s Dylan Matthews breaks down everything you need to know about “budget reconciliation” — a tool that if used strategically in the Senate could mean Dems’ fragile majority could be enough to create a pathway for powerful policy change at a critical time. Subscribe to Off-Kilter on iTunes.
Days out from the January 20th inauguration of Joe Biden as the 46th president of the United States, the president-elect released an ambitious set of COVID and economic recovery policy proposals this past Thursday, repackaging a combination of campaign proposals as well as longtime progressive priorities like raising the minimum wage. But how much of this agenda will he really be able to get through the Senate, where Democrats may now hold the gavels but have just 50 votes?
To help answer that question, Off-Kilter brings back Vox’s Dylan Matthews, who earlier this week published an explainer on an arcane matter of Senate procedure called “budget reconciliation” that could be one of the make or break factors in which Biden promises and progressive economic policy priorities a Biden White House is able to get over the finish line. The piece is titled “Biden can fight climate change, guarantee housing, and halve poverty — without the GOP.”
This week’s guest:
- Dylan Matthews, senior correspondent at Vox
For lots more where all this came from:
- Read Dylan’s piece: “Biden can fight climate change, guarantee housing, and halve poverty — without the GOP”
Host note: With this as our first episode of 2021, we at Off-Kilter would like to say we hope everyone in our listener family is staying safe and healthy during the chaos of the past week and a half — particularly those who work in Washington D.C. on and around the hill, including members of Congress and their staff, whom we’ve been keeping in our thoughts.
♪ I work and get paid like minimum wage
Sights to hit the clock by the end of the day
Hot from downtown into the hood where I slave
The only place I can afford ’cause my block ain’t safe
I spend most of my time working, tryna bring in the dough…. ♪
REBECCA VALLAS (HOST): Welcome to Off-Kilter, the show about poverty, inequality, and everything they intersect with, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas.
It’s been a minute since we put out a pod, what with the winter holidays, the New Year, and the insurrection attempt at the Capitol. So, with this as our first episode of 2021, in lieu of saying “Happy New Year” as we might ordinarily, we at Off-Kilter would like to say we sincerely hope that everyone in our listener family is staying safe and healthy during the chaos of the past week and a half, especially, and particularly those who work in Washington, D.C., on and around the Hill, including members of Congress and their staff, whom we’ve been keeping in our thoughts and many of whom have been guests on this show.
Days out from the January 20th inauguration of Joe Biden as the 46th president of the United States, the president-elect released an ambitious set of COVID and economic recovery policy proposals this past Thursday, repackaging a combination of campaign proposals as well as long-time progressive priorities like raising the minimum wage. But how much of this agenda will he really be able to get through the Senate, where Democrats may now hold the gavels but still have just 50 votes plus a tiebreaker? To help answer that question as we all look in our crystal balls for 2021, I’m thrilled that for this episode of the pod, we’re bringing you Vox’s Dylan Matthews, who earlier this week, published a brilliant, if I might say so myself, explainer on an arcane matter of Senate procedure that could be one of the make-or-break factors in which Biden promises and progressive economic policy priorities a Biden White House is able to get over the finish line. And that’s particularly, of course, during this critical period, where Dems have at least nominal control of the White House, the House, and the Senate.
The piece is titled Biden can fight climate change, guarantee housing and half poverty — that’s cut in half, not have, cut in half poverty — without the GOP. And the Senate process I’m referring to is, of course, budget reconciliation. So, with that, as Dylan writes in the opening to the piece, “John Ossoff and Raphael Warnock’s victories in the Georgia runoff elections mean that the Democratic policy wish list has been [dis]interred — even if the reality of a 50–50 Senate and slimmer Democratic margin in the House may force the party and the president-elect to temper their ambitions.
That gives Biden two years to move — two years with a 50–50 Senate when he’ll be constrained by what moderates like Sens. Joe Manchin [from West Virginia] and Kyrsten Sinema [from Arizona] are willing to vote for.
Still, Biden and his allies in Congress can accomplish an awful lot,” Dylan writes, “through a process called budget reconciliation.” That makes reconciliation, as he puts it, “the most crucial process for the Biden presidency through which his legislative agenda will live or die.”
It’s been a minute since we talked about budget reconciliation on the show, nerdy but critical topic that it is to federal policymaking. And I can think of no one better to break it all down than Dylan Matthews. So, I’m so thrilled to welcome him back to the show. Dylan, thank you so much for taking the time, especially in this incredibly busy and chaotic moment.
DYLAN MATTHEWS: Of course. I love the show. I’m always happy to be back.
VALLAS: Well, before we get into why, as you note, reconciliation is so incredibly crucial to the Biden administration, it sort of feels important to start with, what is budget reconciliation? Some folks who are listening might be familiar with the term, might even be shuddering a little bit at the flood of memories it might be bringing back from how the Republican-controlled Congress used it during the Trump administration. But back up for us and give us a little bit of a stage setter. What is budget reconciliation?
MATTHEWS: Sure. So, budget reconciliation is a process that Congress created for itself in the 1970s, and sort of developed over subsequent years, that provides for expedited passage, so faster passage of certain tax and spending legislation. And there are various aspects of it that speed up legislation. But the most important one is that it allows you to evade a filibuster in the Senate. So, as listeners probably know, you can shut down debate over a topic in the U.S. Senate by invoking cloture, which takes 60 votes. So, that’s 60, not just a bare majority. You need to scrounge up a supermajority to end debate and pass a bill. And in recent years, that’s turned into a kind of de facto 60-vote requirement for big legislation. And budget reconciliation bills cannot be filibustered like that. They can go through with only 51 votes or 50 votes plus the Vice President. And so, yeah.
VALLAS: Well, and I want to pull a sentence out of your piece, actually, which I think helps to sum up some of the filibuster connection here, right? You note, “Under the Obama and Trump presidencies, filibusters became so frequent that there is an understanding that all legislation supported by one party but not the other will need 60 votes to overcome a filibuster and pass the Senate.” So, for anyone kind of catching up and thinking about OK, filibuster, how does that fit with reconciliation? That’s kind of the shorthand for why this matters so much. Reconciliation, therefore, is the strategy for getting something done with 50 votes, not 60.
MATTHEWS: That’s exactly right. You can think of it as kind of a cheat code that allows senators to get around the filibuster when they want or need to.
VALLAS: Now, I noted briefly, but it’s worth just sort of lifting up in the context of explaining what is budget reconciliation, it was a tool that was used quite visibly and quite, I would say, viciously by Republicans during the past four years, during which especially the first two years when they controlled both the Senate and the House. And it was the tool that was utilized for their efforts to repeal the Affordable Care Act that went on for what felt like its own lifetime. It was also the tool that was used to ram through their 2017 tax law that gave $2 trillion in tax cuts to the rich and to wealthy corporations. And those are not the only recent examples of how budget reconciliation has been utilized in recent years, far from it, but perhaps two of the most recent that folks may remember.
It might be new for people to be listening and hearing the word “reconciliation” used as something that might be good news. What caused you to want to take a look at this tool? And this gets us now into kind of what I noted in my opening, the relevance of budget reconciliation to the incoming Biden administration as it starts to think about how it might deliver on its campaign promises.
MATTHEWS: For sure. So, I think the relevance comes from just the situation in Congress that Biden finds himself in. When he became Vice President, Democrats were in an unusual situation where they had either 59 or 60 senators for a long period of time. And that made overcoming the filibuster through traditional means — just getting all Democrats on board or picking off a Republican or two — pretty plausible. And so, you didn’t see as much emphasis on budget reconciliation, though it was used to pass parts of the Affordable Care Act. And Biden doesn’t have that luxury.
After the November election, it appeared that he would have anywhere from 48 to 50 senators on his side. And if it was 48, that would make his presidency sort of like the later years of Obama, where he tried to do a lot with executive action, but the Senate was blocking, and the House, in his case, more relevantly, was blocking a lot of actions. But if it was 50 Democrats are able to take over, Chuck Schumer can be majority leader. But you still have the filibuster. And so, that’s a situation not that unlike the one that Trump found himself in, in 2017 of a thin Senate majority, thin House majority. And the need for tools that let you overcome things like the filibuster that can slow you down. And so, in that situation where you have a razor thin majority, you need all the help you can get to get things through. And that makes this process particularly relevant.
VALLAS: Now, before we get too far into OK, everyone’s listening to this and going, wow! We can get things done with only 50 votes. Man, this changes the game! Before we get folks too excited, you point out and you really walk through in some detail in the piece that there are real limitations to reconciliation. So, this isn’t like a get out of filibuster free card, right? Walk us through some of the caveats that folks should be aware of as everyone gets up to speed on and remembers the rules of how reconciliation actually gets used.
MATTHEWS: For sure. So, budget reconciliation, as the name says, was created for a pretty specific case: that it was meant to keep Congress on track with its budget proposals and outlines. And so, it was not designed as a way to pass literally anything without the filibuster. Its usage has been kind of pushed past its original intention in recent decades, but there are still limits. And so, this can get pretty technical, but the big, the most notable limits are you can’t change Social Security in it, and you can’t do anything that only incidentally affects taxing and spending. So, an example of something that most people don’t think can be done through budget reconciliation would be raising the minimum wage. That has effects on the budget kind of indirectly, but it’s mostly regulation. And budget reconciliation is not meant to change regulations or sort of everyday laws.
And it includes this process called the Byrd Rule, named after Robert Byrd, the former Senate majority leader who formulated these rules, through which senators who think that the process is being misused or that provisions are being added to a bill that can’t pass through budget reconciliation, are allowed to raise a point of order and object. And that’s stopped a bunch of things that both Trump and Obama and various presidents have wanted to do with the process in the past, that you have individual senators who are empowered to try to strip things if they think they’re outside the confines of what budget reconciliation is made for.
VALLAS: And you’re describing the Byrd Rule. I feel like if you’re talking about the Byrd Rule, you have to also talk about its companion phrase, and that’s called the Byrd Bath, sort of the Hill term for how the Senate actually invokes the Byrd Rule to take out offending provisions from reconciliation bills: it’s called giving something up Byrd Bath. Offer a few other examples. You talked about the minimum wage, which is obviously really relevant to listeners of this show. What else do we know can’t be done from, say, hypothetically, the incoming president’s agenda through reconciliation?
MATTHEWS: Sure. So, I think one thing that listeners are probably very interested in that most people I’ve talked to don’t think can be done is sort of democracy reforms: things like resurrecting the Voting Rights Act after the Supreme Court gutted it, instituting public financing of campaigns — even though that one has some budgetary effects, if you want to require it. That goes beyond reconciliation’s limits — things like redistricting reform to prevent gerrymandering, adding D.C. and Puerto Rico as states. Those are all sort of ordinary laws outside the tax and spending process and almost certainly would result in an objection under the Byrd Rule. The Byrd Bath process, besides having a strange name, is also notable for some of the details of how it works, which are kind of tricky and make these interpretations really important.
So, the way it works is that if someone objects, it goes to the presiding officer, usually the Senate majority leader or sometimes the Vice President. And they have to rule on whether the objection is in order. And historically, they’ve always ruled, almost always ruled, on the basis of what the Senate parliamentarian says. Now, the Senate parliamentarian is a civil servant. Their job is to be studiously neutral, study the rules, and give impartial advice. And there’s been a norm in the Senate that that’s what they do. And so, even Senate majority leaders who are trying to pass a bill and want more stuff in it will abide by the parliamentarian’s recommendations and try to take that into account and temper what they can do.
And one question for the Biden administration, and especially for senators working on this kind of legislation, is the presiding officer can, with a majority vote, overrule the Senate parliamentarian. That’s something that Bernie Sanders proposed doing in order to pass Medicare For All during the 2020 primary. He had a whole plan to sort of push the reconciliation process to its limit by overruling the parliamentarian. And the phrase “overruling the parliamentarian” kind of underscores how kind of technical and specific this would have to be. But it’s really important. And if they decide to do that, then the limits on what you can use reconciliation for become a lot less strict.
VALLAS: So, with that as sort of all of the caveats, I feel like you’re kind of reading the instruction manual for folks, right, if they’re thinking about how to deploy this tool.
VALLAS: So, now getting those out of the way — recovering lawyer that I am always got to start with the caveats — let’s get to what you believe that incoming President Biden could do through reconciliation. And I want to be clear, obviously, it’s Congress doing this, but we’re talking about the Biden agenda, and therefore, how can Biden deliver on his promises? You note his agenda is quite large. It would be hard for you to summarize in a single Vox piece. It would be hard for us to summarize in a single episode. Helpfully, we are, of course, you and I for this conversation, going to focus heavily on what’s relevant to folks who care about poverty and inequality and what we could be doing through budget reconciliation to address those particular problems.
But there’s a lot that we also heard in incoming President Biden’s most recent speech and accompanying policy proposals to do with an economic recovery plan that now gives us a whole additional set of things to look at and to sort of ask this question about. So, as I ask you to start to get into what you think that Biden could do through reconciliation, I’ll note we’ve got definitely lots of space to really dig into several of these items. And I’d love to actually walk through several of them in turn. But it feels like maybe we should start with the $2,000 checks and other pieces of economic recovery that we’ve heard so much about from Biden, but which have such a question mark around them in terms of Republican support.
MATTHEWS: Absolutely. So, when we’re speaking, when we’re having this conversation on Friday, last night, on Thursday, Biden unveiled something called the American Rescue Plan, which is his sort of $1.9 trillion relief proposal. And that proposal is sort of a subset of the things I listed in the article: that it’s a lot of things Biden has been calling for since the campaign, but they sort of trimmed it and packaged it together. So, the centerpiece, as you say, is the $2,000 checks. Technically, they’re $1,400 checks because Congress passed a reduced $600 check proposal in December. And so, they’re getting to $2,000 by adding in another $1,400. And so, that is sort of the signal near-term economic recovery plan under Biden and would probably go out at some point this spring if it passes. That’s meant to give people more resources to keep the rent paid, fixed costs paid for, to give people money to help restimulate the economy as people get vaccinated and things start to open up again.
And one thing that’s notable if you care about poverty is that Biden wants to make this more available than the $600 last month were. So, adult dependents, like elderly relatives you care for, disabled adults who live with family who care for them, were not part of the $600 checks that were passed in December. They will be included under Biden’s proposal. And so, there’s an effort to expand the scope and make sure more people, including people in vulnerable groups will be included. Another group are mixed-status households, so family where, say, one person is a U.S. citizen and another person is on a green card or undocumented. Biden is proposing making these checks available to those households as well. So, trying to bring in more people from the immigrant community who might have been left out last month.
VALLAS: There’s a lot else that we heard about from incoming President Biden last night and as you noted. And I always appreciate timing hooks because folks will listen on some given day and who knows what will’ve happened the way the news cycle is moving this way at this point. But we are talking on Friday and with that Thursday speech fresh in mind. There was a lot else in that economic recovery set of proposals that we heard about that also overlaps with key parts of what you explore in your article that did post before Biden’s plan was released. But several of these pieces are actually not new ideas. They’re ideas that you and I have talked about on this show and that we’ve talked about on this show for quite some time, including expanding the Child Tax Credit so that it becomes something more like a child allowance, an idea that other countries don’t look at as just a theoretical concept, but see as part and parcel of their existing social fabric and that the U.S. would be catching up in adopting.
You’ve written a lot about the idea of harnessing the Child Tax Credit so that it could become a child allowance or closer to it. And it’s obviously an issue that’s very close to my heart as someone who’s spent a lot of time working on the Child Tax Credit in the part of my life where I was a poverty researcher. Talk a little bit about Joe Biden’s proposal to establish a Child Tax Credit/child allowance as part of economic relief and why that should be part of economic recovery at a moment like this.
MATTHEWS: For sure. So, Biden is proposing enacting for one year — and I think the hope is it would be renewed after that, but that’s not part of the initial proposal they put forward — the provisions of what’s called the American Family Act. So, that’s a bill that’s been around for about four years now. It was sponsored in the Senate by Sherrod Brown and Michael Bennet, and in the House by Suzan DelBene and Rosa DeLauro, who’s been working on child poverty issues since the early ’90s and is a real leader on that. It would do a few things to the Child Tax Credit. So, the Child Tax Credit right now is something that’s worth $2,000. It’s available at tax time. It is partially refundable. So, if you are a low-income person who doesn’t have a positive income tax burden, you can get some money, but not the full $2,000. And people who are not working, who do not have taxable income, are not eligible for it. It phases in with income, which excludes a lot of people who are really, really struggling.
So, the American Family Act and Biden’s proposal based on it would first increase the benefit. So, it would go up from $2,000 to $3,000 for people with kids above six. For kids six and under, it would be $3,600 dollars. The hope is that this would be paid out monthly. I think this is tricky with the IRS not having a lot of experience with that. But the hope is that this would go out as $250 or $300 a month checks rather than a lump sum at tax season. And most importantly, it’s fully refundable. So, if you’re not earning income, if you’re unemployed and not getting UI benefits or otherwise are struggling in poverty, you do get access to this. It eliminates that phase in, which is really, really important and something that child poverty researchers like yourself have been calling for, for a long time.
So, this is something that a lot of people want to happen permanently, and Biden has not embraced that right now. But he’s signaled support for more investment in children and families. And Kamala Harris co-sponsored the American Family Act as a senator. And there’s a lot of support for that in both the Senate and House caucuses. And so, it’s a really important provision. On its own almost, it could cut child poverty roughly in half or a little less than half. And it would be a really dramatic expansion of that aspect of our safety net. It’s not perfect.
I think Shawn Fremstad, who’s a great poverty researcher, has pointed out some sort of design things he would like to see changed around making it more reliably monthly, making sure that there’s a high take-up rate, because sometimes with these tax credits, even people who are eligible don’t get access to it. But it’s a really, really major step forward and would be one of the more significant changes in poverty policy at the federal level in a long, long time.
VALLAS: It also feels really important not to just sort of step past the pandemic response aspects of what we heard from Biden last night. There is an immense amount that needs to be done to continue to work to really wrap this country’s arms around the pandemic and get it under control, which is essential as we think about economic recovery. You can’t just jump forward to the economic recovery piece. Are Biden’s ideas, when it comes to pandemic response, not on the economic side, but more on the health side, doable through reconciliation as well?
MATTHEWS: Almost all of his COVID-19 plans, I believe, are reconcilable. The exception would be things like a national mask mandate. If you wanted to make it a federal law that you have to wear masks in public until this is all over, you can’t do that through reconciliation. But he knows that, and I think is trying to push for that through working with local governors. Everything else, though, he wants $50 billion for expanded testing, $20 billion expanding vaccination programs, another $40 billion on pandemic supplies, protective gear to be made domestically. He wants to hire 100,000 workers and create a sort of public health job corps as a branch of service, which is something the U.S. government used to have much more formally, but he’s trying to build up both to react to this pandemic and as preparation if something like this happens again. And a lot of his plan is also geared toward helping sort of schools and local governments and things weather the blow and reopen. He has $130 billion to help K-12 schools reopen as vaccines and things get this under control. And that’s obviously sort of a support for local and state governments that’ve been really hard hit economically, but it’s also a public health measure and is important to make sure that we can reopen safely and in a way that doesn’t put teachers and students at unnecessary risk.
VALLAS: Yeah, really, really important pieces to add in as well, and I’m sure things that folks who are listening are wondering, thinking about that aspect of the proposals that we’ve been hearing about this week. We mentioned the Child Tax Credit. I don’t want to be remiss in leaving out its sister, the Earned Income Tax Credit, or well, actually, I don’t know which one is the brother and which one is the sister or what the deal is. Maybe they’re —
MATTHEWS: They’re siblings, certainly.
VALLAS: They’re siblings! Let’s just go with siblings, is what I should’ve gone with in the first place! All right. So, the EITC, as many people call it, is another of the critical anti-poverty programs that is administered through the tax code. Talk to me about the EITC and what would be possible through reconciliation. It’s not something we’ve heard as much about from Bidenland.
MATTHEWS: For sure. So, the Earned Income Tax Credit, as the name suggests, is about work. It’s meant to incentivize work for low-income families. It’s in particular meant to defray some of the cost of payroll taxes, which are the main tax that people at the bottom of the wage scale are paying, so that they’re not taxed into poverty. And the EITC has been really strong historically in terms of getting money to adults with kids, in particular, single mothers, but two-parent households, single fathers, a lot of different family types, because the benefits are much, much bigger if you have children. That’s kind of an aspect of the purpose of the Child Tax Credit that became part of the EITC as well. And a major limitation of the credit that supporters of it and people commenting on it have noted for years now is that it doesn’t offer very much for single people without kids. And so, childless adults are still getting taxed into poverty because of things like sales taxes and payroll taxes. And the EITC they’re eligible for maxes out at about $500 and phases out entirely for people who are still really, really struggling, who are making less than like $20,000 a year.
And so, the Biden plan would triple the maximum amount for childless people from $500 to $1,500 and expand the age range. Currently, if you don’t have kids, you have to be 25 or older to get the EITC, and it caps out in your 60s. And so, they’re trying to expand that so that people who are retiring later or who are working in their late teens, early 20s have access to it. And so, that’s very important for people without kids who are struggling to get through this as well, who might have a few hours at a job, but not a full-time job for the whole year. It offers a big supplement to their income through the tax code. And so, that’s a less dramatic shift in the purpose of it and the way it’s structured than what they’re proposing with the Child Tax Credit. But it is a very significant change and one that Obama spent much of his presidency fighting for and getting close to but not quite.
You described these as siblings. I wanted to call out a third sibling as well, which is the Child [Care] and Dependent Care Tax Credit.
VALLAS: The sibling who never gets invited to the parties, the sibling who never gets put on TV, a sibling who totally deserves some TV time. So, yes, please take it there.
MATTHEWS: Yes. It is definitely the middle child, but the Child and Dependent Care credit is meant to fund child care either through centers or small sort of individuals, sort of nannies, babysitters, that kind of thing. And it’s administered as a tax credit. And the way it works right now is that it’s not refundable at all. So, it serves as a subsidy right now, mostly for kind of higher-income people who have a significant tax burden, who can document putting their kids in day care or child care or hiring help and can use that to defray some of their taxes. It doesn’t really do a lot right now for low-income people. And so, Biden has a very ambitious plan to almost totally reimagine what it is. This was one of the more ambitious things that Biden proposed during the campaign.
First thing he would do is make it fully refundable, and that, sort of in one stroke, makes it available to low- and middle-income people and makes it a real subsidy for people across the income spectrum. He also wants to really dramatically increase the amount and the match so that it would pay for up to half of costs for people and try to cap child care expenses at around 7 percent of income for most families. The details are numbers I would take a while to run down. But the bottom line is really expanding it, making available for low-income people, and trying to cap the cost of putting kids in child care for most families.
And that, I think, was something that was a priority for a lot of folks before COVID-19, but COVID-19 has created a bit of a workforce participation crisis, especially for parents and especially for mothers. That one of the ways the gender wage gap works is by putting the burden of child care on female parents, making them cut back on hours or drop out of the workforce to take over kid responsibilities, especially when everyone’s at home all of a sudden, schools are shut down, you have to be watching the kid 24/7. And that’s a really huge social problem that could set back a generation of working moms. And the intent of this as part of a COVID relief measure is to make sure that doesn’t happen and that there are supports in place so that if people want to go back to the workforce, if they’ve dropped out during the pandemic, that they can do so and that they’ll be supported in finding either center-based or family or individual-based care for their kids.
VALLAS: I so appreciate you contextualizing the EITC and Child [Care] and Dependent Tax Credit and the Child Tax Credit, the three siblings, right? I feel like there’s a Hamilton moment we could do here, and we could make them all sing.
VALLAS: But maybe I’ll spare you that because I didn’t give you advance warning and that wouldn’t be fair. And then you’d never come back on the show. So, we’ll do that off air later. But just really appreciate you contextualizing them all in the pandemic response and providing the context for why these are policies that make sense now. They’re policies that made sense before the pandemic and well before COVID was a household name, but they all have rationales for why they’re especially necessary in this moment. It’s also a great segue into pre-K and child care and paid leave, all things that you actually call out in your piece as potentially reconcilable elements of Biden’s agenda.
MATTHEWS: For sure. And the distinction between child care and pre-K is always a little fuzzy: that pre-K is both an educational benefit for kids, and it’s also a benefit for parents in using child care responsibilities and enabling them to join the workforce or do whatever they need to do. But Biden, as part of his caregiving agenda, includes funds for states to, through partnership, do universal pre-K for three and four year olds. This is something that a few states and cities have experimented with at a local level. New York has a pretty extensive system now. D.C. has a system that’s, and it’s always being sort of ramped up and expanded. The limitation is always money, that cities and states have pretty tight budget constraints. And so, reconciliation can be used to funnel more money to state and local governments that would be entrusted with expanding access to pre-K. So, that would be a really, really dramatic change.
At the opposite end of the income spectrum, Joe Biden has always been really passionate about community colleges. During his whole vice presidency, Dr. Jill Biden was a professor at Northern Virginia Community College, has extensive experience in the community college system. It’s where the plurality of American college students go. And Biden has resurrected a proposal that I believe originated in the second Obama term to make that free for all students. And so, there’s been a lot of discussions about free college at the four-year level as well. Biden hasn’t gotten quite that ambitious, but his plans include some funding to expand community college for all. That is not part of his COVID response, which makes sense to me. It seems like a good idea, but not one that’s particular. It was a problem before COVID. It’s a problem now. I don’t know that it’s more of a problem right now, except in the sense that everyone is suffering and needs money, which is what sort of the checks and increased tax credits are for. But that’s definitely a big part of his agenda in terms of education.
VALLAS: Now, talk to me about housing. Housing feels particularly essential to talk about in this moment when the downturn and the pandemic are throwing fuel on the fire of a housing crisis that was already a crisis before the pandemic and before COVID was a household name. Now, what was rampant housing precarity among a huge swath of the country’s families has turned into an evictions crisis that moratoria are being put in place to try to prevent. And just to contextualize a little bit, prior to the pandemic, we already had such an inadequate federal investment in housing support that just one in four eligible families could even access federal housing assistance. So, talk to me about housing proposals that we’ve seen from Biden that you think we could actually see done through reconciliation as part of this larger effort to meet the moment.
MATTHEWS: Sure thing. So, the first part of it, which is less reconciliation and more just executive power and extending some measures that were temporary in the Trump years is eviction and foreclosure moratoriums, that Biden has proposed extending those through September. Which would be a huge relief for low-income people who might be facing eviction or foreclosure, giving them more time to stabilize the situation, benefit from some of the checks and other programs. He’d also put $30 billion toward rental assistance programs. And his proposal during the primary, which has not made a lot of headlines but I think is incredibly important, is to make Section 8 an entitlement.
So, Section 8, as listeners may or may not know, is our main housing voucher program. So, it’s a public housing program, but it is generally for people getting apartments from the private sector rather than as part of sort of big housing projects. And it is a benefit, but it is currently not an entitlement. And what makes an entitlement program an entitlement is that if you’re eligible, you get it. If you are eligible for Medicare because you turned 65 and you meet the other qualifications, you get Medicare. It does not matter if they’ve capped the number of people who can get Medicare.
Section 8 doesn’t work like that. It is basically a discretionary program that runs through a bunch of housing authorities organized at sort of the city or metro level. And when they run out of money, they’re done. And they’ve never had enough money. There are a lot of housing authorities that’ve closed their waitlists because they have a decade or more years’ worth of people on their list to get through. And they don’t want to add people to the waitlist because there’s just no realistic chance that they’d ever have the money to help them. And so, you have this situation where people who get Section 8 get a lot of assistance. It can be worth thousands of dollars a month towards rent in really high-cost cities. But not a lot of people get that lucky. It’s like winning the lottery. And so, Biden’s plan is to fully fund Section 8 such that anyone who is low enough income to meet the new requirements would get rental assistance and would be able to pay for their housing through Section 8. That’s really important across the board for people who are struggling and potentially facing eviction.
Matt Desmond, the sociologist who wrote the book Evicted, his big proposal on this is universal housing vouchers exactly like Biden’s. That he’s been pushing this for a long time, and Biden took up that call. And beyond that, it’s super important for homelessness and people working on homelessness that there’ve been some studies suggesting that offering housing vouchers like this can reduce sort of the share of people reporting days without housing by about 75 percent, which makes sense, right? That people aren’t unhoused because they want to be, usually; they don’t have the money to pay for reliable housing. And offering vouchers could thus really, really dramatically reduce the scale of the homelessness problem in the United States.
VALLAS: Now, I want to go next to healthcare, which feels obvious and important in the middle of a pandemic. It’s obviously a contentious topic and was during the primary. We don’t have to get into all of that necessarily and relitigate a lot of the fighting on the left around where to go on healthcare. But without asking you to put your thumb on the scale in terms of what you think the incoming administration should do on healthcare, I’ll ask what’s reconcilable from Biden’s agenda that would be helpful for us to know, therefore, is on the list of things that can be done with 50 votes?
MATTHEWS: For sure. So, I think, again, the big divide is, is it regulation, or is it taxing and spending? So, to use Obamacare as an example, the subsidies for individuals to buy health insurance, they’re totally reconcilable. And Biden has some plans to boost the subsidies and make them more generous. That’s totally reconcilable. Things like banning discrimination on the basis of pre-existing conditions, not really reconcilable. That’s more just a regulation. And so, Biden can do a bunch of things on the spending side. There’s some questions about how creative he can get and how much he can create new programs, but he can certainly increase subsidies for the Obamacare exchanges. He can certainly implement his plan to reduce the age for Medicare from 65 to 60. Which both would help a lot of people in that specific age bracket, but also would lower costs for people under 60, because folks in that age range tend to have more health difficulties than younger people. And so, with the federal government providing for their care, that should reduce health premiums for everyone else.
The big question, I think, is about his plan for a public option. His plan was pretty sweeping. It bore a strong resemblance to CAP’s Medicare Extra For All plan. He wanted to allow both individuals and employers to buy into it, to allow people who are at an employer but don’t like their health plan to buy into a government public option plan. I’ve seen a lot of conflicting analyses on whether or not this is doable through budget reconciliation. In 2010, there was a lot of energy behind using reconciliation for this as part of the initial Obamacare push. That obviously didn’t happen then, but certainly Harry Reid and a lot of other people in the Senate at the time thought that was possible. But I’ve seen some other people who think that you would get Bird Rule objections to trying to do that. I know a bit about budget reconciliation, but I’m not a lawyer, and I’m not sort of a Senate rules expert. And so, I try not to come down too hard on one side of that debate in the piece. But I would say that some kind of public option is probably doable. But the question is sort of how dramatic in scope that can be.
VALLAS: I want to note briefly and not dig into it in depth for time purposes, that you also point out that there’s action that could be taken on climate change, which is potentially really exciting to hear. And so, maybe spend a couple of minutes on that, but then I really want to go next to the debt ceiling given I think that’s really important to get into and kind of is buried in this larger piece, in my opinion, as really, really hot button issues for folks to understand can actually be addressed through reconciliation.
MATTHEWS: For sure. Yeah, the debt ceiling is definitely there for the superfans. On climate, Biden has, he has many important proposals on climate. But I think the two signal proposals for me are his plan to require the U.S. to be carbon neutral in terms of electricity by 2035 and on everything by 2050. That’s not reconcilable. That’s regulation; that’s not spending. The other big proposal of his is to spend $2 trillion just sort of creating a green economy. So, things like R&D, directly buying electric vehicles and rooftop solar for federal buildings and vehicles, paying for new mass transit systems in cities so that people use those instead of driving, which is good for the climate, paying for carbon renewal directly once we got technologies to do that efficiently. It’s doing what we can do to reduce emissions and boost clean energy just through spending. And I think part of the reason why he and other people in the climate world have gotten interested in that as a tactic is that you can do it through reconciliation. That sort of tricky regulations and things like cap and trade, those can be hard to do through reconciliation. This is a lot simpler. He can absolutely spend $2 trillion building a green economy if he has the votes in the Senate and House to do that.
VALLAS: So, you said you put in the debt ceiling for superfans, Dylan, which maybe doesn’t surprise me and we all appreciate. But it does feel like it’s really important to actually spend a couple of minutes on this. And I feel like I’ve been hearing about this from a number of people as a real priority that isn’t going to be kind of front page, above the fold, the kind of thing that everybody feels is the sexiest to talk about all the time, substantively but procedurally is really, really important for all the reasons, for similar reasons to why we’re talking about reconciliation now, but its own kettle of fish. Explain what the debt ceiling is and why it matters to getting policymaking and lawmaking done, especially for folks who care about the kinds of issues we talk about on this show.
MATTHEWS: For sure. So, the debt ceiling is a legal limitation on how much debt outstanding the United States can have. So, the U.S. issues a certain amount of debt to meet its obligations that it can’t meet through taxes. And Congress, in part, has a way to try to control debt issue and make sure that the U.S. didn’t get too badly into debt, set a cap on it called the debt ceiling. This is not something most countries have. I think Denmark is the only other country that has anything like this. And it’s become important because it’s a big point of leverage. So, if we meet the debt ceiling at some point, legally, the U.S. government can’t issue more debt. It doesn’t have enough taxes coming in, and so it will start to default on its obligations. That’s a really, really, really bad thing that we have not really experienced in full force but most economists I’ve spoken to believe could spark like a global financial crisis. U.S. debt is the most important financial asset in the world. Interest rates on almost everything else, from credit cards to mortgages to business loans, are all based on what interest is paid on U.S. Treasuries. And so, if those get defaulted on, a lot of things start to come crumbling down.
So, because of that, John Boehner, the House speaker in 2011, realized that he could threaten that outcome in order to get concessions from the Obama administration and that the Obama administration would obviously not want to spark a global financial crisis three years after the previous global financial crisis, and so might be willing to offer him things. And they did. They offered some spending cuts and cut a deal that summer. And I think a lot of veterans of the Obama administration view that as really irresponsible hostage taking that both diminished the ability of the Obama administration to make its own policies, but also just ran the risk of this really catastrophic outcome for no good reason.
And so, there’ve been widespread calls from people on both sides of the aisle to just get rid of the debt ceiling. Like even if you think that we should have less debt, you can do that without risking a major crisis. So, it’s not clear to me whether budget reconciliation can be used to abolish the debt ceiling entirely, but it has been used many times and certainly can be used again to increase the debt ceiling. And so, one idea I’ve heard people floating is trying to set the debt ceiling to something preposterously high, like $7 quintillion or $999 quadrillion, something that would take centuries or millennia for the U.S. to ever reach. And once you do that, you take away this point of leverage. And more importantly, you just reduce the odds that, accidentally or deliberately, the U.S. sparks this major crisis because people can’t agree in Congress and the presidency.
VALLAS: Now, one thing you haven’t mentioned and which people who are listening and are paying attention to the proposals that incoming President Biden has put forth around economic recovery might be realizing is a pretty significant omission is unemployment insurance.
VALLAS: Talk about UI and why it’s not on the list.
MATTHEWS: UI is very important. I think it could be on the list, actually. It slipped my mind earlier in this program, and I apologize. But Biden’s plan for UI is to expand the $300 per week supplement that was passed in December for unemployment insurance and make it $400 per week. That’s not as much as the $600 that was in place for a few months last year, but it’s higher and closer to what Democrats wanted. And the current plan would have those bonus payments expire on March 14th, I believe, and Biden would have them expire through September. And so, you’d go into the fall and hopefully at a period when we’re more fully reopened. So, expanding the time frame, expanding the amount. And I do believe that that is doable through budget reconciliation.
VALLAS: Well, that would be exciting. I was expecting to hear something I didn’t know about that was going to keep it in the Byrd Bath, but really, really important there addition to the list.
Now, this has been kind of one of those wish-listy episodes. I feel like it’s been a really long time since I got to do one of those where it was a lot of here are all the things we might actually be able to do, right? So, as much fun is that has been, it would not be fair for me to wrap this episode up without quoting a little bit more from your piece and offering you an opportunity to do a little bit of a reality check here for our listeners excited, though, they may be doing kind of Mr. Burns finger poses listening. And you write, “That does not mean that all of these things will pass under Biden. What Biden and Harris are willing to support, and what Sens. Manchin [from West Virginia] and Sinema [from Arizona], the likely swing voters in the Democratic Senate caucus are willing to support are two categories that only sometimes overlap,” as everyone pictures the Venn diagram there in their heads. “Fitting all of these measures into just a few reconciliation bills would also pose daunting timing and logistical hurdles.” So, things to keep in mind.
But then you kind of flip back, and you point out later in the piece that there really is so much in the list that you just noted that might actually be doable even when you kind of keep Manchin and Sinema in mind is really worth our being tremendously excited about. You close the piece by saying, “It’s easy to be cynical about American politics, especially if you’ve been fighting for the above goals for decades to little avail. But you should allow yourself to feel a little hope in this moment, too. We’re about to embark on a rare two-year period where big changes are possible. That’s worth getting excited about.”
Dylan, where are you landing personally? Having written this piece, having thought about the things that are potentially doable, having thought a lot about that Venn diagram of where Biden is and where Manchin and Sinema are, what do you actually think is going to happen as you look in your crystal ball? And what do you hope from this list might really be done this year in a way that could be, as you point out, life changing for millions of families?
MATTHEWS: For sure. So, I think, so, Biden has put out his initial bid for the subset of this he wants to pass, and it comes to about $1.9 trillion. I would be surprised if he gets all $1.9 trillion, but I would not be surprised if he gets over a trillion and includes some of these really important provisions that we’ve talked about. Krysten Sinema and Joe Manchin are certainly not sort of far left-wing Democrats, but they have expressed support for a lot of the things on this list. Manchin, in particular, has been a big supporter of expanding the Earned Income Credit and the Child Tax Credit. They tend to be more conservative on kind of like social issues and things like guns and immigration. Joe Manchin famously filmed an ad where he was using an AR-15 to fire at the cap and trade bill that had passed the House. So, he doesn’t like things that threaten coal. He likes guns a lot. But there’s nothing in here that threatens sort of access to guns at all. And on environmental stuff, there’s money, but it’s also money for jobs that people like his constituents could get. And there are aren’t sort of additional regulations trying to hurt industries he cares about. It’s sort of a lot of carrots and not a lot of sticks. So, I think there’s a lot in here for him and Sinema to like. And there will surely be jockeying, and they’ll probably push for certain priorities that they particularly care a lot about. And they’ll probably get some of that.
But I think there’s a lot less disagreement within the Democratic Party right now than there was, say, in 2009. In 2009, you had very, very conservative Democrats who were sort of skeptical of anything that expanded access to health insurance, as well as Bernie Sanders and Russ Feingold. And now you still have the left flank of the party, but people like Manchin and Sinema are closer to it than their counterparts a decade ago were.
So, do I think all of this is going to pass? No, not really. And I could put odds on different things that I think are more or less likely. I think $2,000 checks are absolutely going to happen. I would really like Section 8 reform to happen, but I think it doesn’t have as much momentum behind it. But there’s a broad consensus, there’s a broad consensus among Democrats that you need to invest a lot more right now. And so, I would expect to see that, and I would expect a lot of those changes to affect people’s lives pretty profoundly. And then I think the big question for Biden is, do they affect people’s lives profoundly this year, temporarily as a relief measure? Or does he try to make them permanent or ongoing to make sure they become sort of parts of American government that people know and rely on?
VALLAS: I want to close the conversation by just reading a few additional sentences from your piece that hopefully are words that folks will appreciate ending on, because it is that note of optimism, but I think reasoned and cautious optimism. You write that, “During the general election, Biden’s team talked about him as the next FDR: a president who could seize a crisis to fundamentally transform the role of government. What he can achieve through reconciliation falls short of those ambitions; he will not turn America into a European social democracy overnight.
But what Biden can do — consensus items that most congressional Dems agree on and have been campaigning on for years or even decades — could nonetheless transform American life dramatically. An America where pre-K is universal, child care is affordable for all, with trillions in clean energy investment, free community college, paid maternity leave, a child allowance for parents, and a housing program that nearly eliminates homelessness, [that would be] a very different America. And it’s in reach for the Biden administration.” And of course, with the caveats that you note, and it probably won’t be all of those things. But even just to think about this list as what’s on the table right now, that is being thought about to be fashioned into potential packages and that has various pathways to chart its course is perhaps the greatest cause for optimism that an episode of Off-Kilter has had reason to offer to its listeners in quite some time. And Dylan, I just really appreciate you taking the time to break all of this down for us today.
MATTHEWS: Happy to be here. Love breaking things down with you.
VALLAS: And that does it for this episode of Off-Kilter, the show about poverty, inequality, and everything they intersect with, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas. The show is produced by Will Urquhart. Find us on the airwaves on the We Act Radio Network and the Progressive Voices Network, and say hi and send us your show pitches on Twitter @OffKilterShow. And of course, find us anytime on iTunes or wherever you get your podcasts. See you next time.
♪ I want freedom (freedom)
Now, I don’t know where it’s at
But it’s calling me back
I feel my spirit is revealing,
And now we just tryna get freedom (freedom)
What we talkin’ bout…. ♪