There is a reason the phrase “generals fighting the last war” is invoked so often. When making an important decision, it is human nature to fall back on handling it in the same way one dealt with similar challenges in the past—or at least the way they wish they had.
It is clear that the “go big or go home,” approach that President Biden and congressional Democrats took to the coronavirus relief and stimulus package this month was driven by lessons they feel they learned from President Obama’s experience in 2009, getting an economic-stimulus package through Congress in the first weeks after he took office, in the throes of the Great Recession.
Biden, his White House staff, and party leaders believe that two mistakes were made: First, they believe that the Obama stimulus package was too small, too insufficient to expeditiously get the country out of its economic doldrums. If they had a mulligan, they would have used their driver off the tee rather than the 3-wood.
With the benefit of hindsight, it is probably true that the package, pushed through on a party-line vote, was insufficient in size. Recessions triggered by financial crises are typically among the worst and most stubborn. The 2008 calamity, triggered by a collapse in subprime mortgages and the subsequent stock-market plunge, was no exception. Indeed, the recovery was so sluggish and painful for many Americans that the economy just barely turned the corner in time for Obama’s 2012 reelection.
But does basing the size and scope of spending on the feeling that they under-prescribed the dosage for the last economic ailment make a lot of sense? After all, the two downturns bear no resemblance to one another—not in depth of the plunge, the shape of the downturn, or their respective durations.
Yes, real gross-domestic-product growth fell by 5 percent in the first quarter of 2020 and another 31.4 percent in the second, but then it grew by 33.4 percent in the third quarter and another 4.1 percent in the fourth. The most recent Blue Chip Economic Indicators survey of top economists, released this month, puts the median forecast for this current quarter at 4.7 percent growth, 7.3 percent for the second quarter and 6.9 percent for the third quarter. By comparison, in the last two quarters of 2008, real GDP had dropped 2.1 and 8.4 percent. In the first quarter of 2009 it dropped another 4.4 percent, and 0.6 percent in the second quarter, before moving into positive territory with 1.5 and 4.5 percent growth rates in the third and fourth quarters, respectively.
So even if we stipulate that the Democrats’ 2009 package might not have been sufficient, it doesn’t necessarily follow that we should have scaled this one up.
The second mistake that Democrats identify was that they believe it was utterly futile for Obama to seek GOP support. They are convinced that the current Republican Party is both unwilling and incapable of negotiating in good faith. In their view, valuable time was lost in the effort and the bill was loaded up with all kinds of provisions designed to entice GOP members on board, all for naught.
It certainly appears that the White House meeting between Biden and 10 GOP senators on Feb. 1 to talk about coronavirus relief and a stimulus package was only for show. It soon became obvious that the Biden administration had little interest in striking a deal, turning down concessions sought by Republicans only to end up making a few of those changes when moderate Democrats started raising objections. That was not lost on Senate Republicans—compromising only seemed to be done with moderate Democrats, not with anyone on their side of the aisle.
There seems to be a consensus among Democratic insiders that if Obama could not get Republicans to the table, Biden wouldn’t have a prayer. But is that really the case? Obama took the presidential oath of office just over four years after leaving the Illinois state Senate. He was never really into the weeds of legislative detail. Not exactly analogous to someone who has served for 36 years in the Senate before presiding over it for another eight years as vice president, building up relationships along the way.
Democrats believe that if Biden reached out and sought genuine compromise, Republicans would have done nothing but bite him on the hand. But now, Republicans have all the ammunition they need to justify their own scorched-earth policies. This the residual scar tissue from previous partisan battles.
Not only were Democrats not interested in playing ball with Republicans, they added to the bill a list of items that had long sat on their shelf. Maybe these proposals are good policy ideas, or maybe not, but they were not driven by the coronavirus; this was simply Democrats using the crisis to elevate longtime priorities. Now by threatening to again go the reconciliation route to do an infrastructure package, Democrats are taking a heck of a risk.
A few weeks ago, I was talking about this very subject with a wise Democrat with over 50 years of experience in politics, mostly in Washington. My friend referenced Jesus Christ’s words in the New Testament Book of Matthew: “Live by the sword, you die by the sword. Biden pulled out his sword mighty quickly.”
The vicious downward cycle of partisanship needed to be broken. Maybe it could have happened this year, but we will never know. So I’d like to close by referencing the book of Robert Frost: “Two roads diverged in a wood, and I, I took the one less traveled by, And that has made all the difference.” It’s what Democrats should have done.