November 17, 2023

Thought of the Week:

I was out of town last week for a Veteran’s Day event. Because people know I live in the nation’s capital and work around politics, they typically single me out for a good deal of venting. I hear frustrations from the left and right about the way Washington works…or doesn’t work. This past week was all about the need to pass a second continuing resolution (CR) to avert a government shutdown, and the cry I heard most often was, “Why doesn’t Congress just do its job” [expletives deleted]. The exclamation is satisfying in its simplicity as it implies that if elected leaders would just work harder, then we could all avoid the appropriations equivalent of an annual gunfight at the O.K. Corral. I sympathize with people’s frustration and have felt it myself lobbying the Miscellaneous Tariff Bill (MTB) non-stop this Congress and last. If a bill like the MTB that passed unanimously as recently as 2018, and one in which I’ve never heard a legislator come out against, can get caught up in legislative sausage making, just imagine the gridlock that surrounds a bill with even a hint of controversy. Beyond the obvious partisan gridlock, why is it so difficult for Congress to pass legislation, even bills that are overwhelmingly popular and bipartisan? Many forget that part of the reason is embedded in the Constitution by design. A framework of checks and balances stipulates that before a bill can be sent to the president for his signature, it has to be introduced in, and passed by, each chamber; reconciled in conference; and sent back for votes in the House and Senate. In reality, only a tiny fraction of the bills that members introduce ever pass—of the 10,000 bills introduced in an average session of Congress, just 3%-4% pass. A second reason is that regular legislation is still subject to the filibuster in the Senate. Before a bill can even move to a vote, it must garner the 60 votes necessary to invoke cloture, a task made exceedingly difficult in recent Congresses with miniscule Senate majorities. A third, and often overlooked, reason is that Congress has made it harder on itself by failing to upgrade its own capacity. While the number of voters has increased 45% since 1980, Congress has remained at 435 voting Representatives for more than a century; the average member now serves 760,000 constituents. And while the number of voters, amount of federal spending,  and number of lobbying firms/interest groups knocking on doors has proliferated, Congress has fewer staff today (10,000) than it did in 1980 (11,000). In fact, congressional committees have fared no better—staffing levels stand at 2300 today compared to 3100 in 1980. Last, we couldn’t forget about money. With the battle for majority control of each chamber so intense, candidates and parties feel an incentive to “own” high-salience issues and use them to fundraise and campaign against the opposing party. Rather than solve problems on tough issues like immigration reform or debt/deficit reduction through bargaining, it may actually serve a candidate’s reelection prospects to stall movement in Congress on a bill. While suggestions to improve the system from term limits to ending the filibuster to returning to regular order come and go, the real power comes every two years—the voting public puts politicians in office, they can also vote them out.  

Thought Leadership from our Consultants, Think Tanks, and Trade Associations

Center for Strategic and International Studies (CSIS) Provides Insights into the Foreign Pollution Fee Act. The Foreign Pollution Fee Act (FPF) is an attempt to target environmental, geopolitical, and economic challenges all at once. Although the act sets ambitious climate goals, it may run against U.S. trade commitments, while offering imperfect de-carbonization pathways. In short, the FPF aims to isolate “bad actors,” such as China; use industry averages to determine carbon emissions, which may hinder overall de-carbonization efforts; but lacks a domestic fee, which likely violates WTO rules. Regardless, the bill is a step in the right direction. By including it in international partnership agreements, the FPF understands that working with trading partners is a critical part of combatting climate change, while also serving U.S. geostrategic interests. The proposal’s fees are meant to reduce China’s ability to take advantage of the current trade system and restore the U.S.’s position as a leader in clean manufacturing and energy production. Because the FPF does not include a domestic fee, and the U.S. does not have one pursuant to other legislation, it would be difficult for the Biden administration to argue that the bill complies with WTO rules if enacted. The FPF would rely on industry averages of emissions to calculate how “dirty” they are; CSIS believes this approach does not take into account important firm-specific considerations that would provide a more precise emissions calculation. 

Charlie Cook Says Democrats are in a State of Panic. Few things in electoral politics are more certain than Donald Trump winning next year’s Republican presidential nomination. While some adverse event could intervene, it is unlikely that any legal or political events will steer the party in another direction before the Super Tuesday primaries March 5. After that date, 60% of Republican delegates will have been selected. Given the former president’s many weaknesses this should be a cause for Democratic celebration. But the former president is in a considerably better position to capture 270 electoral votes than President Biden. While a year is a long time, especially in this period of highly polarized partisan politics, poll numbers have been remarkably consistent. While Biden is competitive in the national popular vote, swing-state polling tells a different story. Since October, there have been four sets of data collected from the six states that Biden won by the tightest margins in 2020. Trump has led in 18 of them, Biden in three, with the remaining three tied; the consistency is telling. Polling also shows that Trump voters are committed to him, while Biden voters are more anti-Trump than pro-Biden. This reinforces the view that Biden, or any other Democrat, would have to win the national popular vote by at least 4 or 5 points before they could breathe easy about margins in the Electoral College because of the “wasted votes” phenomenon that has plagued Democrats since 1992—they win heavily populated states by wide margins, pumping up their national vote tallies, giving them a false sense of security. The wasted-votes phenomenon would be challenging for any Democratic nominee, yet a candidate, other than Biden, could create a bit of distance between themselves and Biden’s economic policies, which voters blame for the rising cost of living. By double-digits, voters believe that President Trump did a better job handling the economy than Biden has so far. For most Democrats, Trump returning to office would be considerably worse than even having their party’s president impeached. It remains debatable whether another Democrat would be able to win next November, but one without Biden’s negatives would probably have a better shot against Trump. It is highly doubtful that a group of influential Democrats will stage an intervention, but it would be in the best interest of the Democratic Party. Could President Biden say that he would rather spend his last year in office “getting the job done” rather than campaigning? Sure, he could. Maybe he should. But don’t hold your breath.

Eurasia Group Sees Speaker Johnson (R-LA) Politically Weakened Heading into a 2024 Spending Fight After Averting Government Shutdown. A government shutdown this month is off the table now that the House has passed a short-term funding package and which the Senate also passed easily. For House Speaker Johnson (R-LA), averting the shutdown is a hollow victory: he got his plan across the finish line, but in the end, was only able to do so thanks to the backing of House Democrats, who provided 209 of the 336 votes in favor. This is basically the same position former speaker McCarthy (R-CA) was in after he averted a shutdown in early October. Unlike McCarthy, Johnson has enough credibility left with the far right to avoid an immediate challenge to his position as speaker. However, that credibility only stretches so far, and Johnson won’t be in much of a position to go against the large portion of his conference who demand deep spending cuts or nothing at all when Congress faces the next funding deadline in January. 

“Off the Record” 

Former New Jersey Governor Christie has made it his singular mission to prevent former President Trump from winning the GOP nomination. Whether at home or abroad, he has slammed his one-time boss at every turn. But if he is serious about stopping the president, it may now be in his best interest to drop out of the race. Pollsters and GOP party officials have told us that there is no obvious path for him to the nomination, as most GOP voters favor other candidates. In fact, he could take away votes from a candidate like former U.N. Ambassador Haley in the crucial early-voting state of New Hampshire, where he polls in double digits. Meanwhile, other presidential candidates are beginning to do Christie’s dirty work anyway, increasing their criticism of the former president with just two months to go until the Iowa caucuses. While the Christie campaign did meet the donor criteria for the fourth presidential primary debate, if he truly wants to see his mission through, it would be better for him not to attend—and leave it as a one-on-one battle between Haley and Florida Governor DeSantis for the chance to take on the former president.  

In Other Words

“One thing! I want my Republican colleagues to give me one thing! One! That I can go campaign on and say we did,” Rep. Roy (R-TX21). 

“If I hit somebody, they would know it. If I kidney punched someone, they would be on the ground,” Rep. McCarthy (R-CA20) denying allegations he took a swipe at Rep. Burchett (R-TN02). 

“Leave my daughter out of your voice…You’re just scum,” former UN Ambassador Haley to entrepreneur Vivek Ramaswamy during the Republican debate after he criticized her call for a TikTok ban despite the fact that her daughter uses the app. 

Did You Know

India is Challenging China as the U.S.’s Top Source of Foreign Students. India is challenging China’s position as the largest source of foreign students in the U.S. While 53% of all international students in 2022/23 were from China and India, the market share for country of origin has shifted, with 27% of students from China and 25% of students from India, which compared to 33% from China and 18% from India in 2017/18. Although China remained the top-sending country in 2022/23 with 289,526 students, that was a 0.2% drop from the year prior. Meanwhile, enrollment from India rose 35% to a record high of 268,923 students in 2022/23. Total foreign enrollment topped 1 million students, a 12% increase from last year and the biggest year-to-year gain in 40 years—a robust rebound from pandemic-reduced levels.

Graphs of the Week

Black Friday Holiday Shopping is on its Way. Consumers plan to spend an average of $985 on holiday-related items in 2023, less than the $1,006 reported in 2022. As part of the total, consumers intend to spend an average of $654 on holiday gifts, up 6.7% from last year. By contrast, consumers expect to spend less on holiday-related non-gift items this year—$330 compared to $393 in 2022, a 16% decline. Consumers under 45 are planning to spend less on gifts this year compared to last, while consumers 45 and older expect to spend more. Slightly more consumers also plan to purchase the majority of their gifts online, and among gift categories, consumers are most likely to purchase gift cards, vacation and travel, and toys and games. Home décor, beauty products, and books/music/DVDs are less popular gifts compared to last year. 

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