Peter Orszag wrote this before Tuesday’s elections. It was published at Bloomberg View before voting even started. He doesn’t enjoy being this sort of savant – but, I don’t think he’s wrong?
The question of the day is, What difference will it make if Republicans take the Senate?
The backdrop is a highly polarized political environment. Regardless of whether it’s preferable for Congress to enact bipartisan laws, the moderates who produce them are so rare that only partisan legislation is likely to be considered. Getting such laws passed, though, requires that one party control not just the House and the Senate but also the White House. In a world where you need all three, having two as opposed to one doesn’t matter much.
The need for greater control is especially the case in the Senate, where at least 60 votes are generally required to get anything done. The Republicans, to be sure, could use a process called reconciliation to pass budget-related bills with just 51 votes, but even then the legislation is subject to a presidential veto, which takes 67 votes to overturn. And while it’s true that a noticeable number of Senate Democrats are moderates (and their ranks may swell a bit after today), their votes will not be so easy for Republicans to obtain and are probably not sufficient to assemble a veto-proof majority.
So anyone who expects a Senate shift to produce broad tax reform or immigration reform over the next two years is likely to be disappointed. Tax reform is easy to say and hard to do; immigration reform is slightly more plausible but still very unlikely in the polarized environment. So what might happen?
One bad scenario is another outbreak of fiscal drama. The U.S. economy seems to be recovering, despite headwinds from abroad, in part because, for the past year, lawmakers in Washington have not created needless uncertainty. Next spring, however, the debt limit, the doc fix and other fiscal cliffs will rear their ugly heads…
What about health care? Votes to repeal Obamacare may be inevitable, but they will not have sufficient support to override the inevitable presidential veto. Republicans may do better with targeted legislation aimed at provisions that are unpopular with a number of Democrats. On that list are the medical device tax and the Independent Payment Advisory Board. I am a supporter of both, and believe the Independent Payment Advisory Board in particular has been widely misunderstood, but they are politically vulnerable. The White House would be wise to start defending them now — or at least limit the damage any changes might impose…
Mostly, though, we should expect continuation of not very much from Washington. Inaction, to be sure, is better than drama…
Orszag is more optimistic than I am. And he thinks the Trans-Pacific Partnership is the sort of free trade deal that will benefit the United States. I sincerely doubt it will benefit anyone in my neighborhood; but, then, ain’t any homes expensive enough to satisfy Mr. Orszag or his new/old buddies now that he’s back on Wall Street after leaving the Obama Administration.
He ain’t moving in.