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SCOTUS leak on abortion decision: impacts midterms and beyond
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, discusses what the abortion ruling mean for US politics.
What does the abortion ruling mean for US politics?
I'm down here at the Supreme Court where word leaked out last night that the court has a draft opinion that likely has the majority of votes to overturn Roe v. Wade, which is the 50 year old precedent that prevents states from imposing draconian bans on abortion. Democratic states and Republican states have been preparing for this to happen. Republicans have been rushing as quick as they can to put in place new abortion bans, while Democrat states have been enshrining abortion protections in their law, in anticipation of this decision.
What's unusual is that the decision leaked out. It wasn't released through normal channels. So while everyone knows this is coming, it's not yet the law of the land. And there may still be changes to the draft opinion that could tweak it here or there, in order to attract probably the sixth vote of Chief Justice John Roberts.
Politically, the impacts of this are really unclear. It's a galvanizing issue on both sides. Republicans have a turnout advantage in the midterm elections. Democrats may be able to use this to their advantage, to get more pro-choice voters to show up. But on the other hand, that could cut the other way. Republicans could also galvanize their base by talking about the importance of enshrining this decision into law.
Legislatively, Democrats have almost no options. Their 50th senator, Joe Manchin from West Virginia says he's pro-life and you would require either changes to the filibuster rules or 60 votes overcome them, and that's simply not happening.
This is a major victory for the conservative movement who have worked since the time of Roe v. Wade to put enough judges on the court who had overturned the decision. And now you're going to see years and years of this being litigated at the state level, at the ballot box. And importantly, Democrats working to overturn the 6-3 conservative majority, and try to get a Democrat appointed majority back in the court, so they can undo this decision. This is likely to continue to be one of the defining issues in US politics for the foreseeable future.
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Biden's rocky first year
Ian Bremmer's Quick Take:
It's been a very tough week in the United States, both because in New York, and, of course, the glad tidings of New York very quickly come to a theater near you, are increasingly concerns about breakthrough COVID cases. The potential for hospitals to get overwhelmed, even if omicron turns out to be significantly milder than previous variants. If you have 10X the number of cases and one-third the hospitalizations, you're still going to overwhelm hospitals. And what happens in New York does not stay in New York. It's not like Vegas here. It goes to the rest of the world and it goes across the country.
This, of course, is a real problem for the Biden administration that entered the presidency saying that we were all going to be independent from COVID by July 4th. That is not the case. We're still wearing masks. We still need boosters. And we're still dealing with all of this and we will be, and that is making life much more difficult for Biden. As is the fact that Senator Joe Manchin individually decided to put an end to the administration's effort to Build Back Better. Joe Manchin putting some coal in Joe Biden's stocking for Christmas. And that means that this signature piece of legislation that Biden would have hoped for his entire presidency is not happening. Maybe they'll find one or two pieces of it that they can get done next year, but it is a tiny sliver of what they were hoping for. And that's why you see the White House and members of the Democratic Party leadership so angry and hostile at Manchin right now, it's a big present for the Republicans.
So, in terms of the domestic politics of the presidency, the first year has been really challenging. Some of that is Biden's fault. I mean, the delinking of infrastructure bill from Build Back Better did allow them to get that $1.3 trillion passed, and that is significant, it is a win, it's something that the Trump administration and many administrations were unable to do. And Lord knows the Americans need to invest in infrastructure. They even got a fair number of Republicans to support the bill, showing you that even in this level of partisanship, obviously, good ideas reflect common sense and can pick up support. But beyond that, there's not much you can focus on from a legislative perspective that they're going to be able to get done, that they have been able to get done. And that's going to lead to very low approval ratings together with the fact that you didn't get vaccines and boosters rolled out, boosters particularly, rolled out across the population as quickly as you might have. The US still is really nowhere on testing. And you've seen all those lines in the tri-state area and you'll see them in other places as well.
So, I mean, Biden, on the merits, has been okay in responding to COVID. But of course the buck stops with the president and whatever the performance is, that's the way you're going to look at his success. And right now, almost a year in, with Americans facing an enormous wave from omicron, people not going to be very happy with him for that. On the foreign policy side, I would argue that there've been significant successes, and there's also been quite a few failures. Some of those failures are self-imposed. Some of those failures are constraints of massive division inside the United States. On successes, the transatlantic relationship, even with France, but across the board, is considerably stronger and more functional than it was under the Trump administration. There've been some wins, for example, on trade with the removal of the steel and aluminum tariffs, the Section 232, with the end of the fights between Boeing and Airbus facilitated by the administration, with the alternative minimum tax that was started with the US and the EU, but now is agreed upon by all of the OECD. That is, those are all significant. They're not massive, monumental, but they're significant economic wins that help to build trust in the transatlantic relationship.
United States Senator Joe Manchin III (Democrat of West Virginia), Chairman, US Senate Committee on Energy and Natural Resources, listens to the panel during a Senate Committee on Energy and Natural Resources hearing on domestic and international energy price trends, in the Dirksen Senate Office Building in Washington, DC, Tuesday, November 16, 2021.
What We're Watching: Joe Manchin tanks Biden's agenda
Joe sinks Joe. It looks like US President Joe Biden has come to the end of the road with his $1.75 trillion Build Back Better Plan, now that Sen. Joe Manchin (D-WV) has announced flatly he’ll vote “no.” With the Senate split 50-50, Biden needs every Democrat vote in the chamber. The White House haggled with Manchin for months — “dancin’ for Manchin”, you might say. Biden even cut the proposed spending in half. But the moderate Manchin said he still “couldn’t get there” because of concerns about the deficit, and further stoking already high inflation. Republicans, of course, are ecstatic, because passing BBB is Biden's key pitch for Americans to vote for Democrats in next year's midterms and re-elect him (or another Democrat in his place) in 2024. It's not too late to reach a fresh compromise on the bill, but the longer the Dems keep squabbling, the longer their odds of retaining control of Congress next November.
Chile's President-elect Gabriel Boric celebrates with supporters after winning the presidential election in Santiago, Chile, December 19, 2021.
What We’re Watching: Chile’s new prez, Manchin sinks Biden’s agenda, Russian NATO wishlist, Australia vs China, Afghan trust fund
Boric wins in Chile. In the end, it wasn’t even close. Faced with two diametrically opposed choices for president in Sunday’s presidential runoff, more than 55 percent of Chilean voters went with leftwinger Gabriel Boric instead of his far-right opponent José Antonio Kast. The ten-point gap was so wide that Kast conceded before the count was even done. Boric, 35, now becomes the youngest president of any major nation in the world. Elected just two years after mass protests over inequality shook what was one of Latin America’s most reliably boring and prosperous countries, Boric has promised to raise taxes in order to boost social spending, nationalize the pension system, and expand the rights of indigenous Chileans. But with the country’s legislature evenly split between parties of the left and the center-right, the new president will likely have to compromise on his sweeping pledge to make Chile the land where neoliberalism “goes to its grave.”
Joe sinks Joe. It looks like US President Joe Biden has come to the end of the road with his $1.75 trillion Build Back Better Plan, now that Sen. Joe Manchin (D-WV) has announced flatly he’ll vote “no.” With the Senate split 50-50, Biden needs every Democrat vote in the chamber. The White House haggled with Manchin for months — “dancin’ for Manchin”, you might say. Biden even cut the proposed spending in half. But the moderate Manchin said he still “couldn’t get there” because of concerns about the deficit, and further stoking already high inflation. Republicans, of course, are ecstatic, because passing BBB is Biden's key pitch for Americans to vote for Democrats in next year's midterms and re-elect him (or another Democrat in his place) in 2024. It's not too late to reach a fresh compromise on the bill, but the longer the Dems keep squabbling, the longer their odds of retaining control of Congress next November.
Russia makes its demands. With 100,000 Russian troops at the Ukrainian border, Moscow released a bombshell list of demands for the “West” on Friday. Among other things, NATO must relinquish any right ever to expand further eastward, and must stop sending its troops or ships anywhere that could conceivably threaten Russia. What’s more, the Russians are impatient: they want the US to discuss these proposals right now. The US is happy to talk, but won’t give the Kremlin a veto over the choices that sovereign nations want to make about their own security alliances. The Ukrainians, naturally, agree, and on Monday President Volodymyr Zelenskiy will meet with his counterparts from Poland and Lithuania to emphasize the point. We’re watching to see what the US comes back with — one version of a maximalist response would look like this — and what, precisely, Russia is prepared to do if it doesn't like what it sees.
For Beijing, there is thunder Down Under. Tensions between Australia and China just keep rising. After China responded to Aussie requests for a COVID investigation by imposing devastating tariffs and unofficial bans on Australian exports in 2020, Oz is pushing back hard now. Canberra on Friday accused China of “economic coercion,” while cybersecurity officials publicly confirmed malicious attacks against Australia by Chinese spy services working with Chinese telecom giant Huawei. The Aussies also say Chinese intelligence vessels are snooping around in Australia’s Exclusive Economic Zone. These accompany several clearly pro-American moves this year: the Aussies have signed on to AUKUS, an exclusive military club with Washington and London that gives them access to unprecedented weapons tech, are allowing the buildup of US military infrastructure (read, bases) on its soil, and joined America in a diplomatic boycott of the 2022 Beijing Winter Olympics. But the Australians are taking the tensions directly to China’s neighborhood, too. Canberra just signed a $770 million weapons deal with South Korea, including tech to build Howitzers — really, really big artillery guns. And even though the spat between the two continues, there is evidence that Australia, while heavily dependent on trade with China, is successfully pushing for diversity in trade partnerships.
An Islamic trust fund for Afghanistan. They didn’t officially recognize the Taliban government. They didn’t even allow the Taliban’s foreign minister to appear in the official group photograph. But foreign ministers from the 57-member Organization of Islamic Cooperation, the second-largest intergovernmental organization after the UN, met in Islamabad on Sunday and pledged to set up a trust fund to address the worsening humanitarian crisis in Afghanistan. Neither the exact amount of the fund nor the contributions by member countries was released, but may not match the $4.5 billion that the UN has appealed for aid to Afghanistan amid warnings that the Afghan economy is in a free-fall, with 23 million facing starvation. The lead organization of the fund will be the Islamic Development Bank, the OIC’s in-house global lender.
Who's the real President Joe?
Joe Biden can't seem to do anything these days without the approval of one very specific person.
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Democrats scramble for ideas to finance $2T spending bill
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:
How are Democrats going to finance their $2 trillion spending bill?
Well, I don't know. And the Democrats don't know either. The original idea was to undo a lot of the Trump tax cuts from 2017. This is a very unpopular tax bill that every Democrat voted against, but moderate Senator Kyrsten Sinema told the White House earlier this month that she's against any and all tax rate increases. This takes the top individual income tax rate going up off the table. And it takes the top corporate rate going up off the table. And it probably takes capital gains rates going up off the table. So, now the Democrats are scrambling to backfill that revenue that they can no longer raise through rate increases with other ideas. One of those ideas is a tax on the unrealized gains of billionaires.
This would be a radical departure from how the US taxes income. Typically, it taxes capital gains income when those gains are realized. And the proposal from the Senate Finance Committee would be to tax them on an annual basis based on the appreciation. So, in some cases, you could be taxing somebody on gains they haven't realized and forcing them to pay with money they don't have, forcing them to sell off assets. Unfortunately for Sinema, and Ron Wyden, and other Democrats who support this, moderate Senator Joe Manchin from West Virginia said he's against it. So, they've got to go to other ideas, such as a corporate alternative minimum tax. The US used to have such a tax in place before the Trump tax cuts, but it was repealed because it didn't raise that much revenue, and it was a little confusing and had high compliance burdens.
Now, the Democrats want to bring that back. It would involve taking away some of the deductions and credits that companies use to minimize their tax liability, and would apply to a very narrow group of companies, about 200. If you look at the corporate minimum tax, if you look at the billionaires tax, which would affect about 700 people in this country, you're looking at raising an awful lot of revenue from not a large number of people. And this is a really big problem because you're not going to be able to get all the way to $2 trillion in spending with these somewhat narrow tax increases. This party's a long way from ending though. They probably have weeks, or potentially months of negotiations ahead of them. They'd like to get an announcement this week before the President leaves for his trip to the G20, and the Glasgow Climate Summit. They may get something announced, but the details of that are going to be worked out over a long period of time.
Will the US debt ceiling debate cause a government shutdown?
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:
Is a US government shutdown coming?
Hard to say. Republicans and Democrats generally are in agreement about the need to fund the government. And they generally agree at what level the government should be funded. And they generally agree about the need for supplemental money for Afghanistan and some natural disasters, coming out of hurricanes this season and wildfires. What they're not in agreement about is the federal debt limit, which is the cap on US borrowing that the US hit in early August and needs to be extended by some time in October. Otherwise, the US will have a first-ever default. This would be a very bad outcome with cataclysmic results for the entire world economy.
But Republicans are saying, "Hey, you guys want to spend a bunch of money on $3.5 trillion. We are not going to help you. So you need to find the votes for this on your own." And the Democrats are saying, "This debt belongs to all of us and therefore we all need to vote to increase the debt ceiling." The government shutdown and the debt limits so far are linked. And as long as they remain linked, there will be a government shutdown. The issue has to be resolved by the end of the month. Otherwise, government functions shut down until they get a resolution.
Why is President Biden's economic plan hanging in the balance?
Well, the plan is hanging in the balance because the Democratic Party itself is divided over how much money should be spent by the federal government over the next 10 years. The progressives support spending up to $6 trillion. The conservative members of the party are being a little bit cagier about what they'd be for. Basically, the party's in agreement that they should do some form of expanded social spending, direct subsidies for childcare, for education, for healthcare, and a whole bunch of new physical infrastructure spending. But how much and how to pay for it are really dividing the party. And there's no clear solution right now. Probably they get there by the end of the year. Biden himself has not been super effective in mitigating the differences between the two wings of the party. And you've got a small number of moderate members, including most prominently Kyrsten Sinema from Arizona, and Joe Manchin from West Virginia, who are holding out on the spending parts of the agenda. But there's also a bunch of members in the House who are for tax increases. So this will take some time to work out. Ultimately, they probably rally around $2 or $2.5 trillion in spending, but maybe not until Thanksgiving or Christmas.
US President Biden holds infrastructure event at Carpenters Pittsburgh Training Center in Pittsburgh, Pennsylvania.
Joe Biden’s plan to remake America
Well, after years of endless "infrastructure weeks" to nowhere, Joe Biden is now aiming for the moon.
On Wednesday, the US president unveiled a $2 trillion dollar plan that would rebuild tens of thousands of miles of dilapidated roads and rails, modernize ports and airports, boost employment and housing, expand broadband access, and accelerate the transition to a more climate-friendly economy. By the time it's all over, the total spending could rise to $4 trillion over a decade.
This is the most ambitious US infrastructure agenda in many decades. It vastly exceeds anything that Biden's two predecessors attempted. In fact, nothing of this scale has been tried at least since the construction of the interstate highway system in the 1950s. In some ways it invites comparison with the public works programs of FDR's New Deal or with the social aims of Lyndon B. Johnson's Great Society programs.
That's because Biden's proposal is about more than just building rails, bridges, electric cars, and the like. It's a bold attempt to revive a once-powerful idea in America: that the government can and should act expansively to reshape and improve society at large. Critics of that idea either object on philosophical grounds (arguing that more government means less liberty) or financial ones (running up the national debt is bad.)
Getting Biden's plan through Congress would upend a nearly 40-year trend of governments under both parties largely rolling back the federal government's presence in American life. Barack Obama's expansion of healthcare was the only major exception to that and it was, as a result, hugely contentious.
In principle, Biden's plan is a political winner. Three-quarters of Americans support a makeover for the country's crumbling infrastructure. Despite being the world's wealthiest country, the US ranks just 13th in overall infrastructure quality.
But as always, there are stark partisan differences here too. A majority of Democrats and independents support hiking taxes on the wealthy to pay for infrastructure, while a majority of Republicans either oppose new infrastructure spending altogether or think it should be paid for without tax increases. For the record, Biden's plan at the moment claims it would pay for itself over the course of 15 years via tax hikes on the wealthy and corporations.
In Congress, Republican leaders won't get on board with a plan of this size, not least because it envisions a sizable increase in the corporate tax rate, and because it contains more green initiatives than the current GOP is comfortable with.
But Democrats are at least as much of an obstacle here as the GOP. There's already a battle brewing within the Democratic caucus about the spending plans. Progressives, led informally by New York Representative Alexandria Ocasio-Cortez, are already up in arms because they think the proposal is too small. Rather than spending $2 trillion over a decade, they want to spend five times as much over the same period. But moderate Dems — including the crucial Democratic swing voters of the Senate, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona — are already balking at the cost and potential tax hikes.
And whereas the urgency of averting mass death smoothed party divisions when it came to the $1.9 trillion COVID stimulus bill, this one will spark a much fiercer battle for the soul of the Democratic party.
So, how are they going to pass this thing? There's virtually no chance of getting 10 Republican votes, which means that either Dems have to take the plunge and scrap the filibuster (which in effect forces lawmakers to get 60 Senate votes to pass most major pieces of legislation), or try to pass the measure through a simple-majority process called "budget reconciliation", which applies for bills that affect taxation and spending. Another question is whether the Biden administration decides to break up elements of the plan into smaller bills, or go for one massive history-making shot on goal.
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