This week in Washington has featured no shortage of drama, with Senate Minority Leader Mitch McConnell saddling Democrats with the threat of both a government shutdown and default on the nation’s debts by withholding Republican votes for keeping the government funded or raising the debt ceiling. Meanwhile, despite months of forward momentum in Congress to craft sweeping “build back better” legislation encompassing much of President Biden’s American Jobs Plan and American Families Plan—austerity politics (or more precisely Sinemanchin intransigence—to borrow a timely term from The American Prospect’s David Dayen) has threatened to derail the president’s economic agenda.
Thankfully, late on Thursday night, House progressives came to the rescue, making good on their promise to withhold their votes for the first part of “build back better”—the bipartisan infrastructure package—until there’s a commitment from the Senate (well, really Senators Manchin and Sinema) on a clear path forward for the second part of the package, the so-called reconciliation bill. That reconciliation bill of course is the piece of legislation that includes the bulk of Democrats’ priorities, from paid family and medical leave to child care to home and community based services, climate, and much, much more. The theory of the case for House progressives? Hold the line to ensure the reconciliation package—the centerpiece of the president’s economic agenda—isn’t hung out to dry.
To pull back the curtain on what’s been going on in Washington this week, the politics driving the drama around build back better, government shutdown, potential default, and more—and a deep dive on why it’s so important that Congress pass both parts of the president’s economic agenda—Rebecca sat down with Lindsay Owens, executive director of the Groundwork Collaborative and a senior fellow at the Roosevelt Institute and Data for Progress.
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REBECCA VALLAS (HOST): Welcome to Off-Kilter, the show about poverty, inequality, and everything they intersect with, power by The Century Foundation. I’m Rebecca Vallas.
This week in Washington has featured no shortage of drama, with Senate Minority Leader Mitch McConnell saddling Democrats with the threat of both a government shutdown and default on the nation’s debts by withholding Republican votes for keeping the government funded or raising the debt ceiling. Meanwhile, despite months of forward momentum in Congress to craft sweeping “Build Back Better” legislation encompassing much of President Biden’s American Jobs Plan and American Families Plan, austerity politics—or more precisely, “Sinemanchin intransigence,” to borrow a timely term from The American Prospect’s David Dayen—has threatened to derail the president’s economic agenda.
Thankfully, late on Thursday night, house progressives came to the rescue, making good on their promise to withhold their votes on the first part of Build Back Better, the bipartisan infrastructure package, until there’s a commitment from the Senate on a clear path forward for the second part of the package: the so-called reconciliation bill. And by Senate, I really mean West Virginia Senator Joe Manchin and Arizona Senator Kyrsten Sinema, hence the Sinemanchin intransigence. That reconciliation bill, of course, is the piece of legislation that includes the bulk of Democrats’ priorities from paid family and medical leave to childcare to Home and Community-Based Services, climate and much, much more. The theory of the case for house progressives? Hold the line to ensure that the reconciliation package, and thus, the centerpiece of the president’s economic agenda, isn’t hung out to dry.
So, to pull back the curtain on what’s been going on in Washington this week, the politics driving the drama around Build Back Better, the threat of government shutdown, potential default, and more, and a deep dive on why it’s so important that Congress pass both parts of the president’s economic agenda, I sat down with Lindsay Owens, a good friend and executive director of the Groundwork Collaborative. She’s also a senior fellow at the Roosevelt Institute and Data for Progress. One quick note on the timing of this episode: After we recorded our conversation, congressional Democrats were able to pass a continuing resolution to keep the government funded and avert a government shutdown, and that legislation was signed into law by President Biden on Thursday evening.
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Lindsay, thank you so much for taking the time to come on the show, and I have to say it’s a delight to get to hear your voice.
LINDSAY OWENS: Yeah, you as well, Rebecca. Thanks so much for inviting me. It’s been too long.
VALLAS: It has been way too long. Before we get into what’s going on, on Capitol Hill right now—and I have to say I am enormously grateful to you for accepting the mission of explaining what is going on, on Capitol Hill right now, something I think folks are sorely in need of—before we get into all of what’s going on in D.C., I would love to actually give you the opportunity first to talk a little bit about what the Groundwork Collaborative is and what it is that you all do. It’s an organization that is very close to my heart for a long time, going back to when I was at the Center for American Progress. But it may not be an organization that everyone out there listening is familiar with. So, what is Groundwork? What is it that you guys do?
OWENS: Sure, Rebecca. The Groundwork Collaborative is about three years old, so we’re a relatively new organization. But we came onto the scene to solve a very specific problem. The problem that we set out to solve is that the conservative model of the economy was really dominant. It was dominant in Washington, it was dominant in academia, and it was dominant in Americans’ understandings of how the economy worked. And despite the fact that it was dominant, it was wrong. The old model is not empirically supported. It is not the case that when we give corporations tax breaks, the economy grows. It is not the case that regulation stifles job growth. And yet, it wasn’t enough to sort of shoot down the old model and keep saying over and over again that it was wrong. We really needed to develop an affirmative alternative. We needed a new model, a new vision, a new world view for the economy, a new narrative. And so, that’s why Groundwork was founded. We felt like you couldn’t beat something with nothing, and we are gonna put out that something.
And Groundwork developed a theory and a narrative of the economy that’s really straightforward and really simple. It has three parts. The first part is that we are the economy. The economy is not the stock market. It’s not corporations. It’s not fictional job creators. It’s us. It’s you and me. It’s what we create, what we produce, what we need, what we demand. And the economy does better when we all do better. When workers and families and communities have money to spend, they generate economic growth, they create demand for new jobs, they create and innovate, and are productive.
The second piece of our theory is that concentrated private power stunts economic growth and concentrates wealth in the hands of a mostly white elite. And the third and final piece is that when we build public power, when we come together in unions and accountable governments, political parties, tenants’ unions, mutual aid associations, neighborhood associations, we can both take on concentrated private power and also ensure that each of us, those of us who power the economy, can really prosper and can grow the economy. So, it’s a relatively simple alternative theory of the economy, but it’s one that really does turn the old conservative models on its head.
VALLAS: And hearing you say, “we are the economy,” I mean, that might not sound revolutionary to folks. It actually is when you start to think about that conservative economic case that has been so pervasive for so long. I often have Michael Linden—who preceded you in your current role at Groundwork—in my head, saying, “The stock market really doesn’t tell us anything about the health of the economy.” He often would say, “The stock market is a mood ring for rich people.”
VALLAS: And I feel like that sums it up really well. But also, it’s so core. It’s so baked into so much of the economic conversation that we have nationally right now, right? “How is the stock market doing? What does gross domestic product look like?” But so rarely is the question asked, “How are American families doing,” as the metric for what is the current state of the economy. And that’s really a perfect segue into the next question I wanted to get into with you today.
And that is, what is the current state of the economy? Help us cut through some of that noise. If we’re measuring the health of our economy by how our families are doing, how our communities are doing economically, what do we know about how families are faring right now, about a year and a half into this pandemic? A big part of the story, as we heard last week on Off-Kilter, is millions of workers who are still unemployed and struggling despite what may not sound like a too terrible national unemployment rate.
OWENS: Yeah, the current state of the economy is incredibly complex. There are some real bright spots. And there is some room for optimism, and there’s a lot of room for concern and caution. The continued high rates of unemployment are incredibly concerning, and the fact that millions of Americans are still out of the labor force is concerning as well. Of course, we always have to remember that those headline unemployment rates really do mask some pretty substantial demographic differences. The Black unemployment rate is nearly twice that of the average unemployment rate, about 9.1 percent right now. It’s pretty incredible to think that almost 10 percent of Black workers are out of a job right now.
We’ve also got the Delta virus, which is the really big driver of our current sort of pandemic economy. And caseloads are still high. Deaths from COVID are still high. Obviously, the vaccine is helping a tremendous amount, but we’re really not out of the woods yet. And I think we saw in last month’s jobs numbers, we had three consecutive months of jobs growth where we were looking at three quarters of a million jobs per month. And that really slowed substantially last month, and we were closer to about a quarter of a million. Obviously, we’re about a week out from the next jobs report, but I don’t think it’s expected to be back at that three quarter of a million level. And that’s really because of the Delta virus.
That being said, there are some interesting things in the economy that are notable, including what happened with poverty during this recession and how the poverty levels compare to what happened with the last recession. And that really is a bright spot. It’s a story of expanding the social safety net, and it really working to lift families out of poverty and to keep families afloat during this really treacherous period.
VALLAS: And we’re gonna have a lot more on that, actually, in next week’s Off-Kilter, as well as why a lot of what we get from the Census poverty data is really important, tells us a lot, but is really imperfect. So, lots more coming on next week’s Off-Kilter on that front.
One of the things that we’ve been hearing a ton of handwringing about, particularly from folks on the conservative side of the aisle, Lindsay, is inflation. And this is not a new element in this conversation. The handwringing dates back to far earlier this year. In fact, I had an entire episode on that topic back in the spring with economist Claudia Sahm breaking down some of the overblown concerns about the economy quote-unquote “overheating” because of federal stimulus and spending on economic recovery. What do we need to know about what’s going on with inflation, particularly for folks who may have seen some of the headlines, wondering how concerned do we need to be?
OWENS: Yeah, inflation is the conversation in Washington, and it’s a conversation that many families are having across the country. They are seeing some price increases at the checkout line. They’re maybe seeing some rent increases this year as well. The truth is that inflation is not a monolith. It’s really an average of a series of different price increases, and different product markets have prices that behave a little differently. So, some of what we saw earlier in the summer is really about pandemic supply chains. You know, we shut down our economy during the pandemic, and it takes a little while to rev that back up. And so, there are some places where we saw some lags. Lumber prices were high for a while. We’re still dealing with a semiconductor shortage that’s affecting the price of new cars and affecting wait times for new cars. We saw some changes in prices around airfares and travel and tourism as folks really were ready to get out of the house in May and June and July and finally take a vacation and get on a flight after a year or so of being cooped up in the same house in the same place. So, there’s really a lot of different factors at play here.
One of the biggest drivers of the overall index of inflation is the cost of shelter. That’s not really a pandemic story. That’s a story that predates the pandemic. That’s a story of really a lack of housing. And that’s not an accident. Land use regulations across this country have artificially curtailed the supply of affordable housing for folks and enabled prices to really increase year after year after year for decades now in the housing space.
There’s also, I think, a couple of other stories that are worth thinking about when we talk about inflation. And again, I really think it’s worth breaking down this conversation into specific product markets and looking at the drivers of specific price increases. One is that some of the supply chain vulnerabilities we’re seeing right now are the result of chronic disinvestment and under-investment in our productive capacity in the United States. Whether it’s because we’ve outsourced some of that productive capacity, because of globalization, or whether it’s because financialization and the financialization of the U.S. economy has really moved folks away from investing in long-term capital structures in the United States and instead towards quick ways to turn a profit, that chronic disinvestment has really limited and undermined our productive capacity, and that’s part of why we’re dealing with the supply shortages we’re seeing today. The pandemic may have exposed some of these supply chain vulnerabilities, but the pandemic didn’t cause them. These weak systems sort of long predate our current system.
And the other final piece that I think is important to talk about as we’re talking about inflation is corporate power [chuckles]: monopolies, pandemic profiteering, price gouging, plain old greed. A lot of this corporate power is really at the root, concentrated corporate power, underlying some of the supply shortages we’re seeing and some of the price hikes we’re seeing.
VALLAS: It’s such an incredibly important point, and it’s also very much part of the story when it comes to why we’re seeing this kind of debate around Build Back Better, that, despite unified Democratic control, is not without its complexity. There are huge, huge corporate influences pushing back against the package. We’ll get into that in just a little bit. So, really, really important point.
So, let’s get into what’s going on in Washington right now. Of course, the mantra of the day has been for some time, “Build Back Better.” President Biden has been continuing to work with Democrats in Congress to advance his economic recovery agenda, which listeners will be very familiar with. It includes an infrastructure package, as well as what some have been calling a human infrastructure package, the latter part, of course, including an array of historic policy proposals from paid family and medical leave to childcare to pre-K to closing the Medicaid gap in the states and lots, lots, lots more.
A big part of why I wanted to have you on this week, Lindsay, to break everything down is because so much is going on right now, much of it intertwined, and so much of it is going on behind closed doors. In full disclosure, you and I are talking late on Wednesday, so there’s still a lot of this week to play out. But I’d love to start with where things stand with Build Back Better. Democrats have been back and forthing within the party about a lot of things, including the overall size of the package and whether to move forward with both the infrastructure package and the reconciliation package that’s been getting talked about for the past few months. Help us cut through some of the din and understand what’s going on and what’s at stake for families here. There are other elements of what’s going on this week that we’ll get into, like the debt limit and more, but let’s start with Build Back Better.
OWENS: Sure. So, it’s a big, big week for Biden’s economic agenda and for Biden’s policy agenda, period. He obviously removed the American Rescue Plan back in February and then pretty quickly turned to this long-term agenda to build an economy that works for all of us. The proposal was out early in the new year, and Congress has been working towards passing that for the past few months. Because there are slim margins in the House and the Senate, it’s being done through a process called budget reconciliation. It’s a process that is relatively convoluted. There are a number of procedural hurdles to passing certain policies, concerns around doing things with immigration reform and others. But in general, it is, short of abolishing the filibuster, it’s the best option that Democrats have, given slim majorities in the House and even slimmer in the Senate for passing this agenda.
And so, over the weekend, the House marked up the Build Back Better budget reconciliation agenda that was the culmination of weeks of individual markups in the committees where we got the revenue pieces together, the tax pieces in the Ways and Means Committee, the revenue pieces in the various other committees. And now it’s time [laughs] to get this bill to the floor and to pass it. And I think the process of democracy is messy, and Biden is facing some real headwinds. And the biggest headwinds are coming from the Senate side. Kyrsten Sinema and Joe Manchin have really put a number of wrinkles in the plan. They have said they won’t support the full agenda, but they haven’t been clear about what they would cut, which makes it very difficult to figure out how to build consensus and negotiate and sort of get a deal together that lands the plane and gets this over the finish line.
So, the complications are considerable, but that’s where we are today. There are a couple of other moving pieces. There’s a two-track strategy that we can talk a little bit about, but that’s the state of play right now. We’re really trying to get this piece of legislation over the finish line and try to get some consensus with some difficult players over in the Senate.
VALLAS: Well, and let’s break down that two-track piece here, because that’s a big part of what’s been getting talked about for the past week or maybe 10 days. And as sort of a lead-in to teeing up to break that down just a little bit further, I’m gonna ask you to review for us some of the key elements of that so-called reconciliation package—the infrastructure pieces, sort of roads and bridges—and it’s kind of its own kettle of fish. But that reconciliation package, the one that Democrats know they don’t have any Republican votes for and therefore are using that budget reconciliation package, as you mentioned, has a whole laundry list of longtime progressive priorities in it. It feels worth mentioning some of those as the subtext for why Democrats are pushing so hard to get not just the infrastructure package, but this broader human infrastructure package, over the finish line as well.
OWENS: Yeah, that’s exactly right. The bipartisan infrastructure framework really is some of the quote-unquote “hard infrastructure,” roads and bridges, a relatively narrow scope and a relatively small piece of legislation. The Build Back Better agenda is really in this reconciliation bill. That is the policies that Biden ran on, the policies in his Build Back Better campaign agenda, the policies in the DNC platform, the policies that progressives have been demanding for, in many cases, decades. So, it includes things like the potential for universal childcare and pre-kindergarten, tuition-free community college, big investments in increasing the supply of affordable housing and in greening housing, making housing more energy efficient. It includes things like money to take on climate change and tax credits for different forms of energy investments. So, it really is a pretty wide-ranging piece of legislation. There are healthcare components, a proposal to lower drug prices for seniors by allowing the government and Medicare to negotiate with pharmaceutical companies, the potential to expand Medicare, including by adding dental and vision. So, quite a wide-ranging set of policies, important policies, policies that most other wealthy developed countries have, like childcare, like affordable healthcare, but policies that, in the United States, we’ve been really slow to adopt.
VALLAS: So, Lindsay, staying with some of those key elements of what Democrats are fighting for, so many of those long-fought policy priorities, right, many of which are actually decades in the making. Every time I read another article about where the Build Back Better debate stands, even though a lot of the column inches are getting spent on, “Oh, look at all of this infighting in Washington,” or “oh, let’s try and talk about the drama of will this thing happen,” the thing I’m struck by again and again and again reading these stories about what’s in this package is just how absurdly stinking popular each one of them is, and not just with Democrats, but with independents and with Republicans across the U.S. And tracking public opinion research is a big part of what you all do at Groundwork. So, of course, with the side note that we’ve inserted here that there may not be a single Republican in Congress who wants to vote for these longtime, important progressive policies that are in this reconciliation bill, what is it that we know about what American voters want when it comes to this economic recovery conversation, including not just Democrats, but Republicans?
OWENS: Yeah. So, the real key takeaway here is that the Build Back Better agenda is really, really popular, gangbusters popular. Among likely voters, this is at net plus 40 support, right? Support versus oppose. Among Democrats, that’s like 70 percent. Independents, it’s about 40 points above water. And even with Republicans, it’s sort of just right above water, a couple points, five points, depending on the poll that you look at. So, overwhelmingly, the Build Back Better agenda is incredibly popular as a whole, in sum total.
The interesting thing is that each individual policy is more popular than the next, right? These healthcare pieces around reducing prescription drug costs are really popular, affordable childcare is popular, investing in roads and bridges is popular, or taking on the climate crisis is popular. And one of my favorite pieces of this in terms of thinking through the polling is that one of the most popular parts of the whole package is actually the pieces of the package that are designed to pay for some of these investments. So, the increases, the tax increases on the wealthy, on billionaires, on large corporations are really, really popular as well. So, these are not just sort of things that are stuck in, tough medicine to cover the cost of the bill. These are policies that Americans are really clamoring for. They’re sick of a tax code that rewards wealth and not work. And they want a fair shot, and they think the tax code is an important piece of that. So, I think thinking about the popularity of this bill, the tax pieces really, really boost the popularity.
VALLAS: Well, and let’s talk a little bit about that because the part of the equation that gets way more attention is, of course, the so-called spending side of the ledger. What are the other priorities like paid leave, like the Child Tax Credit expansion, like Home and Community-Based Services for folks with disabilities and older adults to ensure they can live in their homes instead of in institutions? The spending side definitely gets a lot more attention than the so-called revenue side. But the revenue side of the package is inextricably linked to the overall size of the package, and therefore, how much of these longtime progressive priorities and how many of them we can get done and with what level of funding. Talk a little bit about that revenue side of the equation, which, as you just noted, includes a whole bunch of quote-unquote “revenue raisers” that are really popular with American voters.
OWENS: Yeah, I think one of the real sort of— You know, it’s way too early [laughs] to declare mission accomplished, and I can assure you now that Groundwork will not be declaring mission accomplished on a just economy, even if we pass the full Build Back Better agenda. We are decades away from where we need to be right now, and one piece of legislation is not gonna change that overnight. However, there are some real bright spots here. And one of them, I do think, is the way in which the Democratic Party and the American people view the tax system now. And that’s what you’re seeing in the polling.
The Ways and Means Committee was able to come up with $2 trillion in revenue that was supported by Richie Neal, a very, very conservative member of the caucus, a pro-business member of the caucus. And the revenue is composed of things like an increase in the corporate tax rate, raising income taxes on those making more than $400,000 a year, increases in capital gains taxes on the wealthy, some taxes on wealthy business owners, and increases for IRS funding so that the IRS can make sure that the wealthy aren’t avoiding paying the taxes that they owe, so that we’re getting the taxes that folks are already supposed to pay, not just the new taxes that would be put forward in the Build Back Better agenda.
VALLAS: Do you feel like we’re seeing a shift in the conversation around taxes and revenue in this moment? There’s been a lot of attention, I think, paid to the potential for a paradigm shift in how we think about, for example, our social safety net spurred by the pandemic and increased awareness that we’re kind of all in this together, right? But there, to my knowledge, hasn’t been quite as much conversation about whether we’re also seeing shifts in the tax conversation. Increasing taxes even on the wealthy has not necessarily been a uniformly supported idea among the Democratic caucus. It’s been something that progressives in the caucus have been much more comfortable talking about out loud than moderates, as you point out of which our Chairman of the Ways and Means Committee, Richie Neal, is one. Do you think that we’re starting to see a shift, and is that $2 trillion agreed upon set of revenue raisers evidence, potentially, of a shift?
OWENS: Yeah, I do really think there has been a shift here, a really seismic one. I think there are a number of reasons for it. I’ll offer a couple, of course, not giving a shoutout to everybody who’s worked on this issue for so long. But I think the campaign that was run by Tax March and others around the Trump Tax Cuts and Jobs Act, despite the fact that obviously, the Trump tax bill got over the finish line, the campaign was incredibly successful in really highlighting that that was a giveaway for the rich. And as a result, despite the fact that they squeaked it over the finish line, it was incredibly unpopular. And what you saw for really the first time in my lifetime is you saw Democrats, after that bill passed, running on taxing the rich, right? Because folks were really fired up about the giveaways in the Tax Cuts and Jobs Act or the Trump Tax Scam, as folks in the movement called it. So, I think that’s a big piece of it.
I think another big piece of it is the really incredible conversations that happened during the Democratic presidential primary around the wealth tax. And I credit my former boss, Senator Warren, with really bringing that conversation front and center throughout the primary. And obviously, Bernie Sanders ran on that in the primary as well and others. But I think we’re really starting to see the popularity of this, and folks are really understanding that economics, too. Folks understand that their lives didn’t get better after the Trump tax cuts. That money did not trickle down, handing that money up to corporations. We did not see it on the flip side. On the contrary, things like the Child Tax Credit that we see now are what drives economic growth. People are spending that money in their communities, creating additional demand, growing the economy. Retail sales growth is up. Jobs are being created because of that CTC money. That’s the way that we build prosperity for all, not tax cuts for the rich. And I think the gig is up on that old model. And I think that’s what we’re seeing today.
The last thing I’ll say is that these tax increases that are proposed in the Build Back Better agenda are really popular even in moderate and swing districts. In fact, in many cases, the tax components of this bill are more popular than the moderates are in their own districts, right? So, this is something you really wanna be leaning into, not shying away from, and I think the political wisdom of that is starting to be readily apparent. And I think that’s why the support for this is considerable.
VALLAS: I’m speaking with Lindsay Owens. She’s the executive director of the Groundwork Collaborative.
And Lindsay, staying with you on the Child Tax Credit, which you just brought up from sort of the macroeconomic perspective about how the increased Child Tax Credit, the expanded Child Tax Credit, which many of us are calling a U.S. child allowance, is translating into economic growth because we’re talking about families, many of whom are paycheck to paycheck or worse, and turning around and putting that money right back into their local economies when it comes in.
But we’re also seeing real-time research underscoring what a huge difference the Child Tax Credit expansion is making for families in very real, very kitchen table terms. The Census Bureau puts out something on an ongoing basis known as the Household Pulse Survey, which sounds very wonky, but it’s sort of a quick check in between annual reports on how families are doing, how households are doing in the U.S., and found dramatic decreases in hunger and food insecurity. Very literally, do families have enough money to be able to put food on the table as a result of the Child Tax Credit expansion? Now we also have some research coming from the quote-unquote “Academy,” the National Bureau of Economic Research, also further telling us that the Child Tax Credit expansion is dramatically reducing food insecurity. Talk a little bit about the Child Tax Credit as one of obviously the most well-known elements of the reconciliation bill that’s currently being debated right now.
OWENS: Yeah, absolutely. First, I wanna give a sort of concrete example of that macroeconomic point I made earlier and try to ground it a little bit in something less technocratic and a bit more understandable. I was talking to someone covering this issue in Georgia who mentioned that there was a local pizza parlor that was only open five days a week right now because people weren’t buying a lot of pizzas. And the Child Tax Credit hits three months ago, and people are buying pizzas again because they’ve got money to feed their kids, right? And as a result, he’s open seven days a week now. And when he’s open seven days a week and not five days a week, he needs another employee, right?
So, this stuff seems abstract at a high level, but I think it’s pretty important to think about how this is playing out on Main Street and small businesses in our communities. And it’s really feeding our communities, feeding our kids. And it’s a significant, significant achievement for the president and one that I think is, you know, assuming the Build Back Better agenda continues and we’re able to extend this policy for three, five, how many ever years the final bill, god willing it gets over the finish line, entails, I think is really gonna be a pretty big change for the United States, which has been a wealthy but very high-poverty country, an unacceptably high-poverty country. And the consequences of that for kids and for families and for our economy in the long term are really considerable, and I think we really have a chance to turn a corner here. So, that’s pretty exciting.
VALLAS: And of course, the Child Tax Credit expansion that we’re talking about right now, that’s about three months in, but already having those incredible impacts when it comes to family and child hunger and poverty, was only authorized for one year by the American Rescue Plan Act, which Biden, President Biden signed into law in March of this year. So, we’ve got one year already underway, and that, of course, push, as you said, Lindsay being, let’s expand. Let’s extend this policy so that it doesn’t expire overnight and push a whole bunch of families off of a cliff, seeing that incredibly important income support go away.
One of the other debates that is wrapped up in this ongoing Build Back Better debate is around the Child Tax Credit specifically, with Senator Manchin from West Virginia, who you mentioned before, pushing to add so-called work requirements to the policy rather than extending it in its current form. Meanwhile, we’re seeing champions for the Child Tax Credit pushing very, very hard to extend it as it is in current law and to keep it, most notably, fully available to the lowest-income families who need it most. What is the latest there? Senator Sherrod Brown from Ohio had one of the best responses I’ve seen to the idea. He, of course, is a huge longtime champion of the Child Tax Credit expansion and one of the authors of the bill that the Build Back Better, or excuse me, that the American Rescue Plan Act policy was based on. He said, to Senator Manchin’s proposal of adding work requirements to the policy, he said, “Hey, raising children is work.” What are you hearing there, Lindsay?
OWENS: Yeah, it is. It absolutely is. Raising children is work and working costs money. You cannot work if you don’t have gas in the car and if you don’t have a little bit of money to cover childcare if you have a child. You can’t take your kids to work in most cases. So, the Child Tax Credit is sort of fundamentally work promoting, and the debate around this I don’t actually think is about work. The debate around this is really about deservingness. It’s about this idea that there is a population of people who are exploiting government benefits, who don’t deserve these government benefits. It goes back beyond, you know, further than even just the sort of Reagan welfare queen. And it’s a dog whistle, right? Ultimately, this deservingness conversation is about anti-Blackness, and it’s rooted in who deserves government assistance. So, I think the messaging around this and that conversation is really, in some ways, a sideshow, but the policy is clearly wrongheaded.
We have got to cover the poorest children, and that is, in many cases, kids who are in families where parents are unable to work for some reason, can’t find a job, are in between jobs, are maybe ill, or being raised by elderly grandparents or somebody with a disability that takes them out of the workforce. I think it’s really important to think about what we’re talking about here. My hope is that we don’t end up in a place where work requirements become the way to shave a few dollars off the total cost of the Child Tax Credit. I don’t think it will save any money in the long run, but what it will do is create substantial administrative burdens and hurdles and make it much, much more difficult for folks to get this credit. So, I think it’s a real lose/lose. It’s a lose for the poorest families. It’s a lose for the efficiency of the program. It’s a lose on the economics. And it’s ultimately rooted in racism, and I really hope that this isn’t the hill that Joe Manchin chooses to die on.
VALLAS: Well, and I have to say, as we’ve been having this conversation, new polling was literally just released, a new survey of West Virginia parents, which asked West Virginia parents what they think about the Child Tax Credit monthly payments that’ve been going out these past few months. And so, in case anyone’s out there listening and wondering, hmm, I wonder what West Virginia families think about their senator, Joe Manchin’s, idea here? The answer is they aren’t huge fans. Eighty-five percent of respondents said that it was extremely important for their families, for child checks, for these Child Tax Credit checks to continue past this year. Eighty-six percent reported that the monthly payments have made a huge difference for their families. Eighty-eight percent said they made them less anxious about their finances. Seventy-five percent of West Virginia families disagree with Senator Manchin’s proposed so-called work requirements, and in fact, say they will be more likely to vote for him if he supports Child Tax Credit expansion without those work requirements. And just 4 percent of West Virginia families said the payments have not made much of a difference to them.
This polling comes from Parents Together Action, which is a family advocacy organization that represents parents across the U.S. And we’ll include a link to that very helpful and timely polling in our show notes. But of course, I had to share that ‘cause that literally was coming through as we’ve been having this conversation.
Lindsay, also mixed into the something of a dumpster fire that many people feel is Capitol Hill right now, with so much going on, and we would be remiss if we didn’t talk a little bit about this as well in the pulling back of the curtain of what’s going on, much of it behind closed doors in D.C. right now, is the need to raise the debt limit so that the U.S. avoids default. And simultaneously, but on a separate track, the need to keep the government funded so we avoid a government shutdown. Before we wrap, I wanna ask you to help us understand what is at stake on these two fronts? How do these pieces fit in with the larger conversation of what Democrats are trying to do on the Hill right now when it comes to Build Back Better? And how did we get here, to where we’re on the brink of shutdown and default with everything else going on, including a pandemic?
OWENS: Yes! This is just an infuriating conversation to keep having over and over and over again. The debt ceiling is something that just needs to be abolished. There is no reason for Congress to be in this position over and over and over again, and it is a sort of dangerous and embarrassing and sort of childish game of chicken and of political brinksmanship that is incredibly infuriating. And it’s one where Mitch McConnell just enjoys wreaking chaos and putting the full faith and credit of the United States Treasury, as well as millions and millions, tens of millions of Americans’ lives and livelihoods at risk. The politics of this is infuriating, and obviously, we have lifted, suspended the debt ceiling, raised the debt ceiling numerous, numerous times on a bipartisan basis. And McConnell is playing games here.
But it’s worth thinking about the real-world impacts of this and not just the political pieces. If the government can’t pay its obligations, there are a number of things that happen. The first is 65 million Social Security beneficiaries—seniors, individuals with disabilities—will see their benefits delayed. Social Security obviously has its own trust fund, but the Treasury’s inability to prioritize payments can prevent those benefits from being paid on time. And as you well know, Rebecca, not getting a Social Security check is life or death for a number of seniors. It means you can’t afford lifesaving medications, you can’t afford food, you can’t afford a roof over your head. I mean, really playing with fire here. It’s not just seniors; it’s millions of veterans receiving compensation and pensions, low-income households who receive food assistance, military service members who will not get paid, right, who will see their day-to-day pay be delayed, funding for Medicaid in jeopardy, Head Start, federal contractors. People who are out there working on our roads, helping with our highway system won’t have money to buy construction materials, which means they won’t have money to pay their workers, won’t have money to complete projects.
I mean, this really puts every category of business, from small businesses to federal contractors to the banks on Wall Street and all kinds of Americans, from low-income Americans to seniors to service members and everyone in between at real risk. And we have to make a change here. And the best way forward is just to take this chip, bargaining chip, off the table and abolish the debt ceiling. I don’t think that’s gonna get done any time soon, but it is at least worth mentioning that we don’t have to do this, and we really shouldn’t.
VALLAS: And with that as some of the backdrop of what’s going on with this debt ceiling, a big part of it is also political brinksmanship and political gamesmanship when it comes to the Republican Party. Am I wrong to bring that element of the current backdrop up as well?
OWENS: No, absolutely. I mean, Mitch McConnell is very happy to break the government, very happy to push us into a shutdown, a government shutdown, very happy to bring us to the brink of default on our debt. That is, you know, [chuckles] if there’s anything we’ve learned about Mitch McConnell right now it’s that he will actually, he will absolutely burn down the house. He has no sort of, you know, he likes to position himself as someone who has a lot of esteem for the Senate, and we shouldn’t get rid of the filibuster because of its sort of storied tradition. But the truth is he’s not a traditionalist. He’s not a sort of centrist. He is actually an arsonist! And what we’re seeing here is the Republican Party yet again jeopardizing the lives of millions of Americans for political gain or perceived political gain.
VALLAS: So, Lindsay, staying with that element of what’s making things very complicated and multidimensional for Democrats in Congress right now, despite being in power in both chambers of Congress, even by very narrow margins, and the White House, another challenge that Democrats are up against right now, particularly when it comes to the Build Back Better conversation we were just having moments ago, and which is also very relevant in fueling some of the intraparty complexity, particularly, you know, cough, cough, Joe Manchin and Kyrsten Sinema, but which also hasn’t gotten nearly as much attention as who’s fighting for the policies in the bill and who wants the policies in the bill that you were walking through before, from paid family and medical leave to Home and Community-Based Services to Medicaid and more, is who’s fighting behind the scenes against the policies that are so incredibly popular, that American voters so thoroughly want across party lines?
I’m gonna quote Senate Budget Chair Bernie Sanders here. He summed this up pretty well earlier this week. He said, “You’ve got the pharmaceutical industry spending a fortune to make sure we don’t have lower prescription drug prices. You’ve got the fossil fuel industry spending a fortune making sure we don’t tap into their profits as they destroy the planet.” He said lawmakers needed to, “stand up to the powerful special interests that now dominate Congress,” and called this, “the challenge we face right now.” Talk a little bit about some of who’s fighting against this package and how that circles right back to where this conversation started around what it looks like to build an economy that works for all of us instead of just the wealthy, and in many cases, corporate few.
OWENS: Yeah, concentrated corporate power is not just bad for our economy, it’s really fundamentally detrimental to our democracy. Having extreme wealth in the hands of a few wealthy individuals and wealthy corporations really tilts democracy, tilts the scales in favor of the wealthy and of the elite. And they’ve written the rules in their favor in many cases, and Biden’s Build Back Better agenda would undo some of those rules. And not surprisingly, they are running a full court press to maintain the status quo.
My old boss, Senator Warren, used to talk a lot about how money slithers through our political system like a snake. And that is absolutely true. But right now, when we have a major piece of legislation, it’s a little less like a snake and more like a 500-pound gorilla. I mean, lobbyists and lawyers and trade associations, which is basically a conglomeration of corporations who hide behind the sort of innocuous sounding name like the Association for Medical Professionals or Pharma or things like that, they are all over the Hill. They’re peppering the inboxes of congressmen and women, and Chiefs of Staff, of staff. They’re blitzing the airwaves in Washington and in key districts. They’re filling the campaign coffers and running fundraisers that are effectively kind of quid pro quo, wink, wink fundraisers, right? Like, “Oh! We’d love to come in and help you make sure you get reelected. Oh, by the way, it’d be really great if you didn’t vote for that bill that helps Medicare negotiate to bring down pharmaceutical prices, because that’s gonna hurt Pfizer’s bottom line” or pick your drug company’s bottom line, right? So, it’s an all-out assault right now. I mean, I saw this every day as a staffer, but it gets really bad during moments like this. And I’m sure it’s really reached a fever pitch.
But a big reason why we need to pass that Build Back Better agenda is because of those tax proposals in the package, which really will start to level the playing field and take away some of that extreme concentration of wealth that we see at the top. Of course, there are a whole host of other democracy reforms I’d like to see, but taking on money matters, too. And this is a problem for our economy. It stunts our growth when we have wealth concentrated in the hands of a few. But it’s also a real, real perversion of our democracy.
VALLAS: Well, and one of the other topics that I think folks would probably benefit from a little bit of a refresher on as we come to a close— And this hour talking to you has actually flown by. It’s kind of amazing that we have already been talking for almost an hour because there’s so much more that I would love to get into with you. But one of the things should we be in a position (and I knock on wood as I say this) to see the Build Back Better to continue and that reconciliation package continue to come together on the Hill, one of the other complexities that makes this an even more convoluted, to use your word, process for Democrats to follow is the rules of the reconciliation process, the budget reconciliation process, as it’s known in the Senate.
And, of course, the elephant in the room there is something called the Byrd Rule, which has to do with which types of policymaking can be done in reconciliation. All of that is up to someone called the Senate Parliamentarian. Talk a little bit about what the Byrd Rule is and some of how it sets up the table for what we’re able to put in a package like this, but also why we’re not seeing certain things like the democracy reforms that you just described jammed into this package as well.
OWENS: Yeah. The first thing we should say about the Byrd Rule is that we wouldn’t be in a world in which we needed to talk about the Byrd Rule if we were in a world where we could abolish the filibuster. The reason we’re having a conversation about a convoluted rule about what can and cannot be included in a budget reconciliation package is because we have to pass this piece of legislation through budget reconciliation because we can’t pass it outright without 60 votes. Votes we don’t have because of obstruction by the Republican Party of the Build Back Better agenda, despite its widespread popularity in the states and districts that these Republicans represent. So, always important to say that it’s annoying to have to talk about the Byrd Rule because there’s an easy way to fix this: Abolish the filibuster.
That being said, the Byrd Rule is basically a rule that governs what can go into a reconciliation bill, and it is an attempt to prevent non-budgetary provisions from moving through reconciliation. So, the Byrd Rule would prohibit things that don’t produce changes in outlays or revenues, so things that don’t have what we call a score in budgetary parlance, things that cost money effectively. It prohibits things that increase the deficit beyond the budget window and also prohibits a couple of other things like making changes to Social Security.
And so, what you’ve seen take place with the American Rescue Plan with regards to the minimum wage proposal and then now, with the Build Back Better agenda with regards to immigration reform, and obviously, as you mentioned, democracy reform as well, is folks making the case that these policies do have budgetary windows or budgetary impacts, right? That minimum wage increases result in a host of revenue and budgetary impacts, and therefore should not be prohibited under the Byrd Rule. The same case being made by experts on the immigration front, arguing that immigration actually has really big benefits for the economy that show up in outlays and revenues.
So, unfortunately, the Senate Parliamentarian, an unelected appointed official who singlehandedly presides over this process, determined in the case of the American Rescue Plan that minimum wage wouldn’t go through and now has sort of waylaid immigration pieces, although there are a number of other processes in place right now with folks in the immigration advocacy community to take another bite at the apple. But that’s what’s going on with the Byrd Rule, and that’s why we’re in this pickle on some of these critical policies that are also very popular with the American public and overdue, like immigration reform.
VALLAS: So, lots more we’re likely to hear on the Byrd front, including wonderful Washingtonian phrases like “the Byrd bath” in the coming weeks as we see this package, hopefully, knock wood again, move forward and go through those types of hoops and possibly see some changes, including maybe even some things coming out as the Parliamentarian makes those rulings.
Lindsay, in the last few minutes that I have with you, you guys have a pretty big conference coming up next week, something that is lovingly known in the economic justice world as EconCon, not to get too meta here. But talk a little bit about what’s coming up and some of the themes that you’re expecting to hear at that conference?
OWENS: Yeah, absolutely. Thanks for giving me a chance to chat about this. So, EconCon 2021 is our must-attend event for folks in the progressive movement, in the economic policy space, grassroots advocates, folks across the country, and we have a lot of folks who come to EconCon from states like Colorado and Texas and Nevada and Georgia. But it is our must-attend conference taking place virtually, of course, with concerns around gathering in person with the Delta virus, next week, October 6th and 7th, that’s Wednesday and Thursday. And if you’re interested in learning more, you can register for the conference at EconCon.com to hear more about the conference.
But we have an incredible lineup. We’re gonna have a panel on so many of the topics we’ve covered in today’s podcast, kicking off the day on Wednesday with a panel on tax justice that will feature Anand Giridharadas from The New York Times and MSNBC; Dorothy Brown, who’s written an incredible book on the sort of racist underpinnings of our unequal tax code; and Jesse Eisenberg from ProPublica, who really unearthed a lot of the latest blockbuster investigative reporting on how little some of the wealthiest Americans are paying in taxes. So, that will kick off the day.
We’ve got a panel with Jamelle Bouie and Ariel Ron talking about the racist underpinnings of austerity going back to Calhoun. [chuckles] So, not just 10 years or 20 years, you know, over a century here. We’ve got an incredible panel with Mariana Mazzucato, who’s written an incredible book on why we really need serious government investments to do big things like historically, the space race, but today, to take on things like ending a pandemic or defeating climate change.
We’ve got a panel on centering Black women in the economy that will feature the incredible Anna Gifty of the Sadie Collective, as well as a couple of our partner, executive directors from some of our great partner organizations, including Rebecca Dixon from NELP, Taifa Butler from Dēmos, and Michelle Holder from the Washington Center on Growth. That’s just a little bit of what we have online. I know I’m forgetting some highlights, but it’s a really jam-packed lineup. It’s gonna be an incredible conversation, and it’s gonna be so timely next week as we take on issues like the pandemic economy, the opportunity to “build back better,” what’s at stake on these tax pieces as well.
VALLAS: So, EconCon.com, which is almost laughable to say out loud, but which we will have in show notes just to make it a little bit easier. There is still time to register, is what I’m hearing you say, and I believe it’s cost free to attend virtually. Is that right?
OWENS: Absolutely. Free to attend, and we’ll absolutely take registrations through the conference.
VALLAS: Pretty amazing lineup of speakers, some of whom we’ve had on this show. Rebecca Dixon, in fact, from last week talking a lot about unemployment insurance and the current state of affairs there.
Lindsay Owens is the executive director of the Groundwork Collaborative, which you’ve been hearing a lot about in this episode, and which I am just a huge fan of because of the incredible importance of shaping and really advancing a coherent economic narrative and vision that can do battle with the neoliberal narrative that has been at the heart of so much of the conservative side of the field that we’ve all been fighting on, even if we don’t quite see which part of the field we’re fighting on, at least from the standpoint of narrative. Lindsay, thank you so much for taking the time, for everything that you all are doing, and for breaking down so much of what’s going on in Washington this week.
OWENS: Thanks for having me.
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VALLAS: And that does it for this week’s show. Off-Kilter is powered by The Century Foundation and produced by We Act Radio, with a special shoutout to executive producer Troy Miller and his merry band of farm animals, and the indefatigable Abby Grimshaw. Transcripts, which help us make the show accessible, are courtesy of Cheryl Green and her fabulous feline coworker. Find us every week on Apple podcasts or wherever you get your pods. And for the superfans, you can find a full archive of all past episodes and show transcripts over at TCF.org/Off-Kilter.
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