(Bloomberg Opinion) -- Despite intermittent negotiations for three months, Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi have made remarkably little progress on a coronavirus relief plan that both Republicans and Democrats can accept. Wall Street is beginning to lose hope, and Main Street will soon run out of financial support.
It’s time to call in Joe Biden.
“I am the Democratic Party right now,” Biden said during Tuesday’s debate, firmly rejecting President Donald Trump’s claims that he would be beholden to the demands of left-wing congressional Democrats. Biden’s assertion might have seemed like hyperbole, but there is precedent for a party’s presidential nominee playing a role in negotiations between the White House and Congress.
In late September 2008, President George W. Bush and the leaders of each party from both the House and Senate met to discuss the government’s response to the financial crisis. Also attending were senators Barack Obama and John McCain, the Democratic and Republican nominees for president.
McCain actually called the meeting, but as Politico reporter Tim Alberta chronicles, he played little role in the deliberations. Meanwhile, Pelosi and Senate Majority Leader Harry Reid ceded their negotiating authority to Obama, who proceeded to lay out a plan for getting Bush’s bank bailout bill through Congress. In the end, Democrats provided the majority of the votes in both chambers of Congress, even though the bill had essentially been designed by Treasury Secretary Hank Paulson.
Biden could play a similar role today. Moreover, while Obama was often frustrated and notoriously impatient in negotiations with Republicans, Biden has repeatedly declared that he is willing, even eager, to engage. There is reason to believe he might encounter fewer problems than Obama did.
Two examples: During the 2011 negations over the federal debt ceiling, it was Biden who convinced Republican leaders to give up their demands for a short-term extension — which would have raised the possibility of another crisis — and agree to a deal that lasted through the 2012 election. Even more dramatically, Biden stepped in when, hours before New Year’s Eve in 2012, Reid broke off budget negotiations. Biden brokered a deal to prevent a tax increase from taking effect the next day.
The GOP now finds itself in a similar position. Pelosi deemed the compromise bill offered by Mnuchin a non-starter, walked away from negotiations and then House Democrats passed their own $2.2 trillion bill. The bill is considered dead in the Senate.
The first thing to note is that there is actually a fair amount of agreement between Republicans and Democrats. The outlines of a deal that is unsatisfying but potentially acceptable to both sides were put forth last month by a bipartisan group of House moderates.
The harder question is the politics. There are plenty of Senate Republicans who want to pass another relief bill, particularly with expanded unemployment benefits set to run out just weeks before the election. But there are also plenty of conservative Republican senators who remain skeptical. They might have gone along with a package negotiated by the White House and endorsed by Trump. But they are not going to pass the House bill without amendment. What they need is for Biden to pull off the same magic that he did 2012.
What about House Democrats? Many are frustrated with Pelosi’s tactics. Some are deeply concerned about what the failure to pass another relief package, even an imperfect one, would mean for the economy. Others are in purple districts and were swept into Congress in the 2018 wave. With the polls looking good for Democrats, Pelosi might be willing to play hardball and risk some of those seats — but for the actual members, the calculus is quite different.
Neither of these groups, however, has the clout to challenge the speaker. Only someone of Biden’s stature can lay out an alternative path that the House leadership cannot simply dismiss.
Biden, with a clear lead in the polls, might be reluctant to tip the apple cart. Yet among undecided voters there is a concern — one Biden was clearly sensitive to in the debate — that if he wins, the left wing of the party will be setting the agenda.
Brokering a deal now gives Biden a chance to put those doubts to rest. It will also serve as proof of Biden’s thesis that his long tenure in the Senate makes him uniquely able to diffuse the type of obstructionism that bogged down Obama. That’s proof he’ll need if he wants to quell calls from the left and center-left to ditch the filibuster, pack the courts or stack the Senate in a scorched-earth campaign against Republicans.
The U.S. once again finds itself in the midst of a crisis, with partisans on both sides seemingly willing to risk economic ruin rather than compromise. Neutralizing this type of apocalyptic confrontation is Biden’s specialty — and he needs to show America that he’s still got it.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Karl W. Smith is a Bloomberg Opinion columnist. He was formerly vice president for federal policy at the Tax Foundation and assistant professor of economics at the University of North Carolina. He is also co-founder of the economics blog Modeled Behavior.
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