Potomac Watch: In June Democrats described the coronavirus as “a tremendous opportunity to restructure things to fit our vision.” A Biden administration will continue that theme unless Republicans unite around fiscal discipline. Images: Zuma/AFP Composite: Mark Kelly[object Object]
isn’t yet in the White House, but we are about to witness a crucial test of his ability to roll a closely divided Senate. Republicans can hold the line on Covid relief, or a divided GOP can signal that Biden Democrats will hold the whip hand on spending.
Majority Leader Mitch McConnell drew the line this week, circulating a straightforward virus-relief bill that checks bipartisan boxes. As Mr. McConnell noted, the bill delivers “right away on all the subjects where everybody agrees”—more funding for small businesses, vaccine distribution and extended unemployment aid, as well as legal certainty for hospitals, schools and religious groups. Better yet, the bill repurposes some $569 billion of unused virus funds—offsetting the entirety of his bill’s cost. Immediate, targeted aid for those Americans still hurting, at no additional expense to the U.S. taxpayer. What’s not to like?
Yet pressure is mounting on the GOP to double or quadruple the dollars. Speaker
and Senate Minority Leader
have climbed aboard a $900 billion bipartisan Senate proposal that would throw money at state and local governments, revive the ill-conceived “enhanced” unemployment benefit, and bail out public transport. And although that bill was negotiated in good faith, it has already been taken hostage. Mrs. Pelosi and Mr. Schumer explained that they’ve adopted it only as their “basis” for further negotiation, and are already promising “improvements”—likely hundreds of billions of them.
The press is weighing in, casting the McConnell bill as Scrooge-like and inadequate. Mrs. Pelosi is again warning that “the economy will fall into double-dip recession without additional federal relief from Congress.” Even some Republicans argue the party can win the two outstanding Georgia Senate seats only by one-upping Democrats on spending.
This fight is rapidly coming to represent something much more significant than a simple dollar figure. Internally, smart Republicans are arguing that this is about the GOP standing for basic principles and good governance, even as it sets the tone for future spending negotiations with a Biden administration.
Want to surrender to Democrats’ Keynesian philosophy that only more government spending can save America? Vote for a bigger bill. Democrats are already rewriting history, claiming the spring’s $2.2 trillion Cares Act is the sole reason any business now opens its doors. Never mind that some of the Cares provisions (especially enhanced unemployment) did more harm than good. Mrs. Pelosi has been warning ever since Cares passed that without an even bigger follow-up, both demand and the economy would fall off a cliff.
Yet the real problem was government itself—state-imposed lockdowns. Americans have recovered fine in their absence, without trillions more in government aid. Unemployment hit 6.9% in October and is falling. The Atlanta Federal Reserve predicts 11.1% annualized economic growth for the fourth quarter, following 33.1% growth in the third. Most voters understand all this and won’t reward Republicans who spend for the sake of good press. Only a month ago, those voters thanked Republicans in the House and Senate for not rolling over to Mrs. Pelosi’s demands.
Want to reward blue states for poor policy decisions or for failing to tighten their belts even in a crisis? Why should Utah taxpayers bail out New Jersey, which increased spending during a pandemic? Why should Kansas rescue Los Angeles County—which just banned outdoor dining, despite zero evidence it spreads Covid? Why should anyone contribute to Illinois’s sinking public-employee pension fund or New York’s atrociously managed transit system?
Mostly, do you want to assure Mr. Biden that Republicans will scatter in any tough future spending fight? The former vice president has barely engaged the debate because he views whatever Congress manages this fall as a mere down-payment on legislation to be enacted during his tenure. A Biden administration intends to milk the virus for all it’s worth, teeing up a range of spending bills under the guise of “building back better.”
If Republicans do manage to hold the Senate, they will have a slender majority of 51 or 52. Only they will stand between Democrats and trillions in spending and higher taxes—for climate, health care, welfare programs, and the like. Mr. McConnell has done an admirable job of keeping has caucus united on judges and other key votes. But the GOP’s weak spot—its point of disarray—has always been spending. And don’t Democrats know it.
This virus-relief fight is an early test of whether Republicans have the discipline to unite around a bedrock conservative principle: fiscal discipline. Mr. Biden hopes it’s a test the GOP fails. But the party can win, and in doing so send a powerful message (including to Georgia voters) that it will be a force for the Biden presidency to reckon with. All it has to do is hold the line.
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