It’s a big day for the MLF strategy. The Fed relief programs are at the center of a fiscal shit storm. It’s nerve-wracking.
Infection rates are sky high. The economy is shutting down again. The country’s been waiting for some kind of tax relief from the federal government. People need money.
Meanwhile the government faces a shutdown if there’s no spending bill and legislators are tying the relief to that funding bill.
Facing lame duck strife in their party, Republicans are desperately trying to hang on to a Senate majority in runoff elections in Georgia. A loss there could mean a big shift in the balance of power. (McConnell actually agreed to personal relief checks for this reason.)
And what’s the final sticking point for Republicans in the negotiations around fiscal relief? The Fed programs, like the MLF. Of course, Pat Toomey of Pennsylvania—who is in a long lame duck position, having announced he won’t run again—is leading the charge. I hope the Democrats don’t give in.
It doesn’t look like they are: Maxine Waters and Jim Clyburn asked the Congressional Research Service to investigate the legality of keeping the programs open. The CRS gave the thumbs up. I don’t think such heavy hitters would be involved if they meant to back down.
These Fed programs are a clear threat to the ruling class. They’re basically a public bank for loan financing. This jeopardizes the hegemony of credit markets. If small businesses and local governments can go to the Fed for loans rather than billionaire bondholders underwritten by private banks, then people can’t get their fixed income. The grift would have to stop.
It’s dizzying to see the policy I’ve been looking at take center stage like this. If Democrats give in and let the programs die, then the Biden administration loses a key support in preventing economic crisis. The left loses a once-in-a-lifetime chance to provision the working class in a structurally novel way.
Republicans have much less to lose. The programs are not as high profile as personal checks so cancelling them doesn’t affect their chances in Georgia. People like Toomey who aren’t running for re-election win points with their cronies in the credit markets, securing a more comfortable return to the private sector, and others who keep their seats will get more donor backing.
Meanwhile, teachers and students and parents are suffering from all manner of material loss: loss of healthcare with increased exposure to the virus, rent and utilities payments in the cold of winter, lost income from furlough or getting laid off. They face a logjammed congress with neoliberal leadership, and little hope for big fiscal programs.
Keep the programs open!