Thought of the Week:
Reality Bites, one of my wife’s favorite movies, is a 1990s cult classic that follows the disenchanted, post-university lives of several members of Generation X. The challenges that confront the characters exemplify some of the career and lifestyle choices faced by the young adults who came of age during the 1990s Grunge scene. Not only did the film capture the spirit of the era, but it also brought attention to the various issues that plagued young Americans at the time. Gen Xers are widely regarded as self-sufficient, resourceful, and individualistic because they had become accustomed to caring for themselves long before reaching adulthood. While Gen Xers value freedom, responsibility, and try to overcome challenges on their own, we are about to see whether today’s politicians will be able to function successfully as reality starts to bite in a narrowly divided Washington. First up, is the Biden administration’s infrastructure plan, the second initiative expected to move via reconciliation, which faces calls to include priorities that conflict with Senate rules. While the most prominent example is immigration, President Biden is open to including other reform provisions in the package even though the Senate Parliamentarian is likely to rule they do not meet reconciliation requirements. Similar dilemmas confront progressives pushing for police reform, voting rights, and minimum wage increases; these issues are unlikely to advance unless Democrats eliminate filibuster provisions, which at least two moderate members publicly oppose. The White House is left to navigate between expressing minimal, mostly private, support for the goals of key constituencies to keep them happy, while not putting too much public pressure on holdout Democratic senators to change the filibuster, which could endanger their support for the infrastructure packages the president hopes to pass.
Thought Leadership—from our Associations, Think Tanks, and Consultants:
Conference Board: Economic Growth Prospects for 2021 Continue to Strengthen: For the United States, the Conference Board forecasts that Real GDP growth will rise to a 5.0% annualized rate in Q1 2021 and 6.0%, year-over-year, in 2021. Following a lull in the economic recovery in November and December, growth improved in January before stalling in February due to adverse weather conditions. In March, however, the economic recovery continued to strengthen. Real GDP growth is now expected to accelerate further over the coming quarters as new COVID-19 infection rates decline further, the vaccination program continues to expand, and a large fiscal support program is fully deployed.
Eurasia Group: Cross Currents on Infrastructure Don’t Change the Dynamics that Will Lead to a Bill Later This Year: House and Senate members from both sides of the aisle are raising questions about specific provisions in President Biden’s $2 trillion infrastructure proposal; however, none of the items that look like potential sticking points are big enough to derail a bill from getting done this year. The primary risks to the bill include its size and timing. While Republicans say they would be willing to support a smaller package in the $600-800 billion range, this includes only basic surface transportation, water, and broadband projects and leaves out significant Democratic priorities like green energy and the tax increases necessary to finance it. While multiple Senate Democrats have indicated they would be comfortable with a corporate tax rate of 25%, both the House and the Biden administration will push for a higher rate. While pressure to finalize a signature infrastructure bill will eventually drive consensus among Democrats, the bigger question is around process, specifically what the Senate Parliamentarian will allow under a revised FY21 budget resolution; a second set of reconciliation instructions has never been issued before, and the parliamentarian has not provided guidance on what could be included. This process question will affect the timing of future bills, as a revised budget resolution would also affect the ability to move to the FY22 budget process, which will bring up challenging questions for Democrats over issues like defense funding. Expect clarity on these issues before the next Senate recess in May.
Cool Graphic:
The U.S. owes more to the rest of the world than it is owed; at the end of 2020, $14 trillion more.
In Other Words (Quote):
“What’s he been smoking?”—Sen. John Cornyn (R-TX), responding to Senate Majority Leader Chuck Schumer’s support for ending the federal prohibition on marijuana.
Did You Know:
BENJAMIN HARRISON was the first president to attend a Major League Baseball game on June 6, 1892.