Topics of Discussion:
Thomas: Hello and welcome to Opening Arguments. This is episode 470, I’m Thomas, that’s Andrew. How’re you doing, Andrew?
Andrew: I am fantastic, Thomas! Happy Donald Trump actual inauguration day to you.
Thomas: [Laughs] I don’t even know what this is about!
Thomas: Is this a thing?
Andrew: It’s a real thing. The idea is it is Q Anon mixed with sovereign citizens. No President since, I dunno, like 1875 has been legitimate.
Andrew: And they used to swear in presidents on March 4th back then.
Thomas: Oh my god.
Andrew: Because, you know, you had to take your donkey and ride it-
Andrew: [Laughing] -to Washington D.C. and uh … yeah. So, used to be there were a couple more months before you would swear in the President, and because Q Anon believers are idiots they think that that’s gonna be some time today.
Thomas: Boy, you aren’t joking. That really is Q Anon combined with the gold fringe on the flag.
Andrew: It really is. I’m not making it up.
Thomas: Speaking of, I was driving yesterday and I saw a dude with a truck and he had a big sticker that had a Q and a rabbit on it? I have to assume that that means Q Anon, like follow the rabbit, you know, down the thingy? Whatever?
Thomas: I was like “I’m not sure? But what the heck else is that?” Unless there’s, you know, unless there’s a college football team that starts with a Q-
Thomas: -the rabbit’s the mascot, which maybe there is.
Andrew: Oh gosh, that would be so good!
Thomas: The Quahog … Yeah.
Andrew: [Laughs] The Quahog Rabbits.
Andrew: There we go.
Thomas: Couple quick announcements?
Andrew: Next week we have a voting rights show.
Andrew: A lot of people asked about the Brnovich v. DNC oral arguments before the Supreme Court which I listened to so you don’t have to. That was the one in which Amy Coney Barrett asked the RNC lawyer “so what exactly – how do you have standing, what’s your interest here?” And he was like “Well, it’s a zero sum game, so anything that benefits Democrats is bad for us.”
Andrew: Literally was his answer.
Thomas: Yeah, I saw that quote.
Andrew: Yup. We’re gonna break down that case, we’re gonna break down H.R. 1 that passed, as we are speaking here, passed the House and heads to the Senate. We’re gonna do all that next week. We are gonna talk about Greg Abbott’s latest executive order, GA 34, lifting the mask requirements throughout Texas, it’s worse than you think. We’re gonna break that down on Tuesday’s show and talk about what you can do to fight back.
Thomas: Just a quick announcement here, February gets us every year, Andrew. It feels like there’s like 12 February’s a year?
Thomas: Because multiple times a year I’m like “oh my god there’s only however many days in the stupid month.”
Thomas: We’ve got to do our Patreon Q&A, that we never want to miss because it’s the best. [Laughs] I lover our patrons, and Teresa has to get in the first question, and we are late because February screwed us, so we’re doing it Saturday. That is maybe tomorrow, as you’re hearing this. Saturday the 6th at 8:00 Eastern, 5:00 Pacific. I know that’s a quick turnaround, but I’m not worried. Patrons always come up with too many questions anyway. [Laughs] Maybe this will make it look like we answered a higher percentage of them.
Thomas: Look for that, if you’re a patron look for that link, look for the place to post the questions, vote on each other’s questions, and we will see you on the YouTubes Saturday, 5:00 pm Pacific, 8:00 Eastern.
Andrew: Absolutely, can’t wait, love those!
Breakin’ Down the Law – Budget Reconciliation and Minimum Wage
[4:54.0] [Segment Intro]
Thomas: The question on everybody’s minds that I’ve heard this talking point repeated and repeated is that Kamala could just overrule the Parliamentarian and I guess case closed? I’m not sure what happens after that, I would assume it would be a vote anyway, but what do we make of that claim?
Andrew: Let’s unpack it because almost every aspect of that claim is wrong.
Andrew: And is multiply wrong, and wrong in ways even in terms of characterization. To understand exactly how we got here, we need to understand the Congressional Budget Act of 1974.
Thomas: Of course we do.
Andrew: Until 1974 you could filibuster the federal budget. As you might imagine, that created a situation that members of both parties quickly thought was potentially untenable, because back then we did not have – even the Republican party was not interested in shutting the government down. The parties had different priorities, but both had an interest in hey, when we have control of the government, that is we have the presidency and we have the legislature, we’d kind of like to be able to fund the government without you being able to filibuster the budget, so they passed the Congressional Budget Act of 1974, which said, rather like the Congressional Review Act later, which was based on this, which said we are going to limit debate to 20 hours on certain tax spending and federal debt limit legislation.
The way in which the Congressional Budget Act of 1974 works is you pass a budget resolution in both chambers of Congress, in the House and the Senate, and that will have what are called reconciliation instructions. Reconciliation instructions choose various committees in both the House and the Senate that will then have jurisdiction over putting this budget together. The instructions direct those committees to craft language that will go into the final bill that either increase or decrease federal revenues, spending levels, or the debt ceiling. The instructions generally give those committees some discretion, wide discretion, as to how they’re gonna reach that.
They will say you’ve got to reach a particular target, and how you figure that up is up to you, Congress. For example, in 2018 the Concurrent Budget Resolution instructed the House Ways and Means, and then the Senate Finance Committees, to submit changes that would increase the deficit by no more than $1.5 trillion dollars for the 10 years in the fiscal window, 2018 through 2027. $1.5 trillion over those 10 years combined, and then they get to kind of pick and figure out alright, how are we going to allocate over that 10 year period that $1.5 trillion dollars? That’s what the committees sit down and do, they prepare a budget that is consistent with those reconciliation instructions. Then if the House and the Senate do not pass equal, identical versions then there’s a joint committee and they work together and workshop the language.
All of that is subject to, once the language has been hammered out, a 20 hour cap on total time for debate. That includes everything, including, you know, I know one of the Senators has said “well I’m gonna make ‘em read the whole 600 page bill.” That’s fine, that’s gonna take away from your 20 hours. Once that 20 hours is up it proceeds to a vote. In other words, you do not have to invoke cloture, cloture is what you do to cut off debate. When you specify a time for debate, you can’t filibuster.
The first important question to ask is well, why don’t we just do everything with this? [Laughs] Right?
Andrew: Budget reconciliation process. There are really three reasons for that in increasing order of importance. First, you can only invoke the Budget Reconciliation process three times a year.
Thomas: Oh, I thought it was once a year. Oh, okay.
Andrew: Nope, three times. Once to pass the main budget-
Andrew: -and then twice to fix stuff.
Thomas: There must be other rules about those fixes because I still hear a lot of people talking like we can only get one shot at this a year.
Andrew: I would have to look more deeply into that. First, you’re limited to three times a year. Second, you cannot have a bill come out of reconciliation under this act that increases the deficit in any way. In other words, your net bill must be either revenue neutral or revenue generating. The third is the Byrd rule. You may have heard this, as it came up during the debates over adding the $15 dollar an hour minimum wage.
The Byrd rule is now codified as of 1990 at 2 U.S.C. § 644. It was proposed by Democratic Senator and occasional racist Robert Byrd from West Virginia who was concerned that this Budget Act could be used to do exactly what Democrats now sort of want to do, which is not pass a budget, but instead just pass regular legislation. By a vote of 96 to zero the Senate said yeah, we’re going to approve – it was amended into law so it passed the House as well, but it passed the Senate.
Thomas: Oh it’s a law? It’s not just a Senate rule?
Andrew: It’s a law, correct.
Andrew: The first big thing to know is that the Byrd rule is a law. [Laughs]
Thomas: Wow! What about the bird law, is that a rule?
Andrew: [Laughs] Yeah, 2 U.S.C. § 644, you can look it up in the U.S. Code. It says “When the Senate is considering a reconciliation bill … any part of said … provision that contains material extraneous … as defined in subsection (b)” (below) “shall be deemed stricken from the bill and may not be offered as an amendment from the floor.” That’s pretty straightforward. You can’t put extraneous stuff in there. Then what is – how does it define-
Andrew: -extraneous stuff? Yup. This applies at each stage of the budget reconciliation process to the resolution, to the bills, and to the conference report. Anything that comes out of this process you have to strike the extraneous stuff, any Senator can make a motion to strike extraneous stuff and it must be considered and ruled on from the floor, and the Byrd rule defines the following six things as extraneous: A) if it does not produce a change in outlays or revenues, in spending or revenues coming in; B) if it does produce an increase in outlays or a decrease in revenues, but it does not follow the reconciliation instructions that are in the budget resolution; C) if it’s not in the jurisdiction of the committee that reported that particular provisions, which was also established by the budget resolution; D) if it produces changes in outlays or revenues that are merely incidental to the non-budgetary components of the provision. And I know what you’re thinking, they’ve just defined extraneous as incidental, I recognize that, there is no further definition of “incidental.” Put a pin in that.
Andrew: E) if it increases the deficit in any fiscal year after the period specified by the budget resolution, that is the budget window. For example, I told you the 2018 budget, the window was 2018 to 2027, those ten years. That is why all of the major huge tax cuts, the Bush tax cuts and the Trump tax cuts-
Andrew: -which we’re gonna talk about, sunset, because if they didn’t sunset then they would increase the deficit outside that ten year window. Or F) if they recommend any change to social security because social security is the one thing you can’t mess with. Let’s put all of that together. That means by law you cannot include extraneous material in the budget reconciliation process at any point in the process if it meets any of those criteria. Very clearly, let’s be 100% clear about this, in the second half of this I’m going to tell you why I favor a $15 dollar an hour minimum wage, okay? You favor a $15 dollar an hour minimum wage. We are pro increasing the minimum wage. It is obviously extraneous to a budget reconciliation around extending COVID relief. Could you make an argument that it’s a part of it? Yeah, they tried.
Thomas: Yeah, I would try to make that argument, but I’ll be honest I don’t totally understand the rules, here. It involves the budget, I think? Tax revenue, you know, what are the arguments that it could be part of this and why do you see those as not valid?
Andrew: The argument would be, and it would have to meet all of these, it would be increasing the minimum wage with produce a net decrease in expenditures, because fewer people will collect what is left of our tattered safety net.
Andrew: Temporary assistance to needy families and the like, should produce an increase in tax revenues, because people’s income will go up, so it will meet the criteria of section (a). It absolutely is not part of the budget reconciliation instructions that were sent to the particular committees.
Andrew: Clearly fails (b).
Andrew: You could just say-
Andrew: -well, they had wide discretion and that’s-
Thomas: But also the ten year thing, I didn’t really think about that.
Thomas: You would expect this would, since it’s permanent-
Andrew: That’s right.
Andrew: You could say, and the way in which Republicans do this with tax cuts is to say-
Thomas: Yeah, just make it ten years.
Andrew: It’ll sunset-
Andrew: -in 2029. I can’t imagine what the people who are angry about failing to use this policy method would have thought if the bill had said “we will increase the minimum wage only to 2029.” But who knows, maybe you could’ve tried that. You could’ve tried to get around the budget window by having it sunset.
Andrew: But at the end of the day you’re gonna be left with section 644(B)(1)(d), which is that the changes in outlays or revenues are incidental to the non budgetary components of the provision. That is the non budgetary components are this is a bill about COVID relief.
Andrew: And permanently or for 10 years increasing the minimum wage, I think any fair person would say that’s probably incidental to the idea of extending COVID relief. Could you argue that it’s not? You could, and they did, but ultimately the parliamentarian, in her considered judgment said “I’ve looked at the law, and seems to me that this is extraneous material,” then made that advice. Then Joe Biden said “I will abide by the decision of the parliamentarian and-
Thomas: Wait, why does Joe Biden have to say that?
Andrew: Well, it-
Thomas: Just party leadership?
Andrew: Taking the lead, right. That’s a party leadership thing.
Thomas: Okay, it’s not like he had the next step or anything.
Andrew: No, no. But Biden publicly came out-
Thomas: Just making sure.
Andrew: No no no, that’s a great question. Biden came out and said we will abide by the decision of the parliamentarian.
Thomas: Yeah. The dude abides.
Andrew: That’s when a [Laughs] a certain segment of left-leaning social media lost their collective minds and they said “how dare quisling Joe just cave into some unelected parliamentarian, you know Republicans would absolutely just override the parliamentarian” and there were basically two sub-arguments that were made for this. The first was that, because Kamala Harris is technically the presiding officer of the Senate during the reconciliation process, that she could overrule the Senate parliamentarian. I’m gonna ask you a loaded question, how many times since 1974 do you think that the Vice President has overruled the Senate parliamentarian in the budget reconciliation process?
Thomas: You know, man, I have no idea, but you’re probably looking for zero?
Andrew: I’m looking for zero. In fact, the idea that the Vice President gets to overrule the parliamentar- because nothing in the bill that I just read to you says the Vice President gets to overrule any determination-
Thomas: Yeah, I would think that just the fact – I had no idea that the bird law was a rule or the Byrd rule is a law, whichever, the Byrd rule is a law, just that alone I think already changes my mind. If it was a Senate rule I’d be like, yeah, okay, whatever. It’s not a Senate rule, it’s a law, right?
Thomas: How could she just overturn a law single handedly?
Andrew: There are two answers. The answer is she can’t.
Andrew: And the only person who has ever made an argument that is analogous, that says Kamala Harris has the power to overrule the parliamentarian is good friend of the show Ted Cruz.
Thomas: Well I trust him implicitly.
Andrew: [Laughs] Yeah, you trust Ted Cruz’s view of the law? So here’s what happened. I dunno if you briefly remember Donald Trump’s effort to do things, but in 2017 he proposed the American Healthcare Act of 2017, which was briefly called Trump Care. That bill would have repealed the individual mandate and the employer mandate, gutted all of Obamacare, cut Medicaid spending, eliminated tax credits for healthcare costs, abolished certain taxes and altered the rules on pre-existing conditions.
Thomas: This is the one McCain killed, right?
Andrew: Not quite, not quite.
Thomas: Not quite, okay.
Andrew: This was – initially there was some stuff in there, and there was some stuff by like buying drugs from Canada.
Thomas: I was gonna say, because so far your Trump Care plan is just get rid of healthcare.
Thomas: Just no healthcare. [Laughs]
Andrew: That’s right. That’s essentially what it was plus some tax stuff.
Thomas: Very fitting, yeah.
Andrew: Plus some preferential buying from Canada, and Donald Trump in 2017 tried to get Trump Care, American Healthcare Act of 2017, through the reconciliation process, and guess who said no? The exact same Senate parliamentarian that those on the left are excoriating today. They said no, no, no, there’s too much stuff in here, you cannot use the Budget Reconciliation Process to do all of these different things.
Thomas: How do you get this parliamentarian job? I feel like this … you could be a good parliamentarian.
Andrew: Yeah, I would be a great parliamentarian. She was appointed in 2012. Parliamentarian said no, and then on March 23rd of 2017 Sean Spicer was asked about – [Laughing] Do you remember Sean Spicer?
Thomas: Oh god.
Andrew: You know, hiding in the bushes and swallowing 100 pieces of gum a day? He was asked about overruling the parliamentarian and, look, his answer is classic Sean Spicer nonsense because he’s an idiot, but it is essentially no, we’re not gonna overrule the parliamentarian.
Andrew: Question: “When you were talking about the Byrd rule, can we read from your answer that Vice President Pence does not at any point intend to overrule the Senate parliamentarian?” Spicer: “It’s not a question of overrule, you don’t overrule. The Senate parliamentarian makes interpretations, it’s up to the presiding officer.” Question: “Right?” [Laughs]
Andrew: This is seriously the transcript! Spicer: “I do, but I also understand how the Senate works and the presiding officer determines the Senate parliamentarian has asked for guidance.” Question: “Sure, and if the guidance from the Senate parliamentarian is something that would violate the Byrd rule, would Vice President Pence” and then he cuts it off and Spicer says “I’m not gonna answer hypotheticals about what he might do.
Thomas: Ah, the good ol’ can’t do hypotheticals excuse.
Andrew: [Laughs] Right. I will include the article from The Hill in the show notes from that day in which the only person making the argument was Ted Clownhorning Cruz, who says (quote) “Under the Budget Act of 1974, which is what governs reconciliation, it is the presiding officer, the vice president of the United States, who rules on what’s permissible on reconciliation and what is not. That’s a conversation I’ve been having with a number of my colleagues.” Cruz told reporters on Thursday. His colleagues told him to go clownhorn himself.
Andrew: That’s how we wound up with-
Thomas: In fairness they probably didn’t even know what the issue was?
Andrew: [Laughs] Right!
Thomas: It was just “Ted Cruz, go clownhorn yourself.” No wait it’s about the- “I don’t care.” [Laughs]
Andrew: [Laughs] Yeah!
Thomas: If your objection, Jacobin Magazine or whatever the heck-
Thomas: -is that Republicans would’ve just done this if they were in power. No, actually.
Andrew: Indeed they did not. They repackaged the bill.
Thomas: Not even Republicans.
Andrew: And we got the skinny repeal that John McCain voted against at the last minute-
Andrew: -to save Obamacare, 51/49. That’s how we wound up there, because of Republicans respecting the rule of the Senate parliamentarian. Again, I do not want to be spending this time on this show complimenting Sentate Republicans, okay? That’s not my job.
Thomas: No but it’s a good barometer of where the rubber meets the road. If Mitch McConnell – if it would be in Mitch McConnell’s interest to do a thing and he doesn’t do it, that tells you that you can’t do it, you know? Seriously.
Andrew: And that is – and here’s why. Because Mitch McConnell – is there any question that if there was some-
Thomas: Just out of kindness of his heart.
Andrew: No. Yeah, right.
Thomas: He just cares about the system, Andrew!
Andrew: No. I think Mitch McConnell knew, ultimately, what would happen if they went down that road. That is – there’s a couple of things. The first is it’s possible that there would have been a procedural impasse, because the Vice President does preside over reconciliation, but before you get – you don’t get to reconciliation when there’s an adverse determination by the parliamentarian, that is subject to the decision of the chair. That is very, very clear. Again, 2 U.S.C. § 641. Ultimately what you would have is you would have is, you would have an appeal to the decision of the chair, to the presiding officer. Sean Spicer, god help us all, was correct.
How do you appeal the decision of the presiding officer? Well that’s Senate Rule 20, and if Senate Rule 20 sounds familiar, and we love you Opening Arguments listeners-
Thomas: It doesn’t. [Laughs]
Andrew: -that it sounds familiar, that’s the rule that enables you to clarify any rule that is the so-called nuclear option that Democrats and Republicans have used selectively to blow up parts of the filibuster. In other words, the procedure here is equivalent to voting to end the filibuster. We know, you can talk about like could Joe Biden have twisted Kyrsten Sinema and Joe Manchin to support $15 an hour minimum wage? I think maybe he can, and I hope he tries.
Thomas: I don’t think he can.
Andrew: Well, let’s leave that out there. But, again, we want to make the best possible case. There is zero chance that the Democrats had the votes of Sinema and Manchin to essentially do the equivalent of blowing up the filibuster with respect to this bill. That’s what it would have been.
Thomas: Which, by the way, is an outrage.
Andrew: The nuclear option. Yup.
Thomas: [Sighs] The whole budget reconciliation thing being the one time a year that you can pass stuff as long as you can kind of loosely make it related to the budget is not how our government should work. It’s stupid, it’s the dumbest thing in the world, we absolutely need to get rid of the filibuster.
Thomas: And I don’t understand what Manchin- Manchin’s one thing, I don’t understand what Sinema is doing thinking there’s some big constituency for the filibuster or something.
Thomas: Mind blowing.
Andrew: I’m with you, I’m with you, I’m with you, and we’re gonna get to that. But first I want to consider this scenario and entertain Jacobin Mag. Suppose Joe Biden has kompromat on both Sinema and Manchin and he’s like “alright, I’ve got a card that says I get to force you to vote one way once,” and suppose they do all of this anyway, they say okay, we’re going to appeal the decision to the chair, we’re gonna overturn, we’re gonna fire the parliamentarian, and then we’re gonna pass this bill 51/50-
Thomas: Whoa, do you really have to fire the parliamentarian?
Andrew: Who knows? I’m throwing everything in here.
Thomas: Oh. I thought you could just overrule them.
Andrew: You know.
Thomas: Strikes me as a little hostile, I’m just saying. Okay. Some old timey Senate rule that’s like you have to run them out on a rail, it’s required if you’re gonna overrule them.
Andrew: Suppose you did all that, then what would happen? The answer is, as you ascertained from the moment you asked the question, wait wait, the Byrd rule is a law, is that this resulting law, the entirety of the law would be ultra-virus, would be beyond the power of the Congress to pass because it was not passed in accordance with existing laws. Now, could Congress amend and overturn the Budget Act of 1974? Absolutely, but they haven’t, and so long as they haven’t they have to follow the laws that they themselves have put into place. That’s a pretty straightforward principle. Even Congress has to obey the law. The second that this bill passed it would be trivially easy for Ted Cruz to go into court and get an injunction stopping the whole bill from going into effect.
Andrew: Why? Because, a couple of things. Number one, he would clearly have standing.
Andrew: When you look at cases in which courts have declined to rule on internal votes cases, frequently it is because they’ve held that the individual plaintiffs have lacked standing. Think about when a minority of the Senate in the Blumenthal case on emoluments filed in 2017 and the Supreme Court was like “Right, but we don’t know that you guys would’ve had a vote anyway, so you haven’t shown a particularized injury because Mitch McConnell could’ve just never brought this up for a vote, so it would all be speculative.” Here, the injury is concrete. The bill passed, and Ted Cruz is saying I was deprived of my opportunity to either engage in endless debate on the subject.
Andrew: Or, to have extraneous matters struck from the bill. Those are two concrete and particularized injuries that I would have to agree, if I were a sitting judge, yeah, Senator Cruz, you were deprived of those two rights. Then the parliamentarian’s position is purely advisory. There’s a case directly on point, D.C. Circuit, 2014, called Common Cause v. Biden, but the courts have a very, very long history of deferring to interpretations made by parliamentarians as to what the law means. Cruz’s argument is the Byrd rule prevents you from including extraneous stuff in a bill that’s passed by reconciliation. That’s 100% clear, yes it does.
The Byrd rule is meant to be exhaustively protective. Over and over again it says any one Senator can object at any point in time to extraneous material. That’s also super, duper clear. And an objective third party determined that this was extraneous, then the Democrats just went ahead and did it anyway. Courts, you should rule that this is extraneous. That would not be a political question, it would be an interpretation of the law. That is a core – that’s what courts do. I think when you look at the two major questions on issuing injunctive relief, would there be irreparable harm? You betcha. And do they have a substantial likelihood of prevailing on the merits? I think they would.
Yeah, now you go to the District Court in the Northern District of Texas, you cherry pick and find your favorite judge, it’s a slam dunk. It would have stopped not only the $15 an hour minimum wage and held it up in indefinite litigation, but it also would have stopped all the other provisions in the bill. The $1.9 trillion dollars in COVID relief. The $1400 dollar checks. It all would be stuck in limbo and we would be left dancing to Ted Cruz’s tune as to well, okay, oh, are we going to get in the Senate and vote to repeal this now? Who the hell knows? It would have been a disaster.
Thomas: Well that sounds like a nightmare.
Andrew: That’s why Mitch McConnell – Mitch McConnell did not adjust the Trump tax cut bill out of the goodness of his heart. [Laughs] Right? Mitch McConnell adjusted the Trump tax cut bill because he did not want to be in this position vis-a-vis the Democrats. He did not want the Democrats to be able to go to court and challenge it and say “oh, we’re gonna get the entire tax cut bill enjoined.” That’s why they went along with the parliamentarian back in 2017, and that’s not just a hypothetical. I’m gonna include a law review article that looked at the comprehensive – it’s called The Tax Legislative Process, that looked at the, what was called the Tax and Jobs Act of 2017.
Andrew: It said (quote), “The Byrd rule is also the reason that key elements of the 2017 TCJA Act, including the reduction in individual income tax rates, the expansion of the child tax credit, the increase in the standard deduction, the new deduction for passthrough income, and the increase in the estate and gift tax exemption are set to expire at the end of 2025 and the Byrd rule is the reason why a number of provisions that appeared n earlier versions of the bill, including a measure that would have allowed 501(c)(3) organizations to participate in political campaigns,” that is repealing the Johnson Amendment, we talked about that on the show, “several significant changes to the low income housing tax credit, and the repeal of the tax exempt status of professional sports leagues,” [Laughs] I’d forgotten about that one, “were all eliminated from the final legislation.
Andrew: To recap, 7 points I want to make for you. Number one, the idea that Vice President Harris could overrule the parliamentarian is a Ted Cruz one weird trick, it’s never been tried. Number two, the internal procedure to try it would basically devolve to the exact same procedure as blowing up the filibuster, for which we definitely do not have the votes, that’s Rule 20 of the Senate.
Thomas: Well, and even if we did-
Thomas: -just pass this bill and blow up the filibuster, there’s no reason to jeopardize it by putting it in something it’s not allowed to be in. Okay.
Thomas: I’ll – continue your points.
Andrew: That was point three.
Andrew: The result would violate the law and not just internal Senate procedures. I think that is the key thing that most people don’t realize.
Thomas: Yeah, I didn’t know that.
Andrew: Yeah. Number four, the injury would be the passage of the bill, which would absolutely give any Republican member of the Senate standing. Number five, courts have a long history of deferring to interpretations made by parliamentarians. Number six, you could then go and get the entire bill enjoined. Then number seven, that would have been awful, would increase – look, I get hardball.
But here’s what I want you to take away from this. If a month ago Joe Biden had said “I’m gonna use budget reconciliation to get COVID relief out to everybody because we’ve got to, people are hurting, then after that passes I’m gonna go to the House and I’m going to demand that they introduce comprehensive legislation increasing the minimum wage to $15 dollars an hour.” If Joe Biden had said that we would have all said – we would have all clapped, we would’ve been “yup, great, good work.” Nobody thought you could sneak getting the $15 dollars an hour minimum wage into the COVID bill until Biden said “I’m gonna try it!”
Andrew: Biden was the one that played constitutional hardball!
Thomas: Yeah, yeah.
Andrew: To turn around and say “oh, he’s weak, he’s a quisling, Kamala Harris could have blah blah blah.”
Thomas: It’s the worst.
Andrew: Part of playing hardball is you press your advantage when you have the advantage. I firmly believe on the basis of everything I laid out here they knew they did not have the advantage once the parliamentarian ruled the other way. Now, were they hoping the parliamentarian – sure! Of course they were! And if they had, that would’ve been great and we would be cheering and high-fiving and everybody would be there.
Thomas: Well, I don’t know that Manchin would have voted for it, so I’m not sure it would matter anyway, but yeah..
Andrew: [Laughs] Maybe that’s a transition? I’ll do it super short, but maybe that’s a good transition to the second half of this.
Thomas: I just wanna say, this is why I struggle with the Jacobin left even thought I want actually a $20 minimum wage.
Thomas: I’m more in favor, I want it even higher. What often happens with this segment of our left wing that really, really gets on my nerves and is destructive, I think, is they translate this from, as you’ve laid out, this would be an extreme hardball that not even Mitch McConnell did, and it wouldn’t work. So not only do they say “oh no, they could’ve done this, they’re not doing it,” they say “that means that Kamala and Biden and all these people don’t even actually want a $15 minimum wage.” It’s this attack on their integrity that adds up over time and it becomes so that this Jacobin left has the worst possible opinions of the intentions of every Democrat at all times, and it drives me nuts. Because obviously there are times when the Democrats fall short or don’t do what we wanted to do, but there’s a segment of the left that makes things like this into Kamala doesn’t really want a $15 minimum wage and then that goes in their minds forever as that, and there’s ten thousand things that they’ve already done that for, so they end up Glen Greenwalding over to Fox News.
Thomas: That far extreme Democrat hate, and it’s really harmful. Can you, can you – Look.
Thomas: It would be one thing if you’re out there and you’re like “well I think we should do this anyway, we should absolutely blow it up, blah blah blah,” even though it’s not going to work as Andrew outlined. If you still hold that opinion, fine. Can you recognize that the reason that Kamala or anybody else isn’t doing it is not because they don’t want a $15 dollar minimum wage, but because they actually disagree with you over whether it would work. Can you at least grant that? That’s the disagreement. Don’t turn it into “no it’s actually ‘cuz they hate the poor.” No. They disagree with you about whether or not this would actually work.
Andrew: I think that’s incredibly well said. Let me say this: my proposal that I am formally encouraging Joe Biden to adopt right here is way way way more progressive, way way way more socialist, than just a $15 an hour minimum wage. It is, and I’m gonna provide a link in the show notes, that they should propose the Public Service Employment Model developed by the Levy Economics Institute of Bard College. That is a number of prominent economists, L. Randall Wray, Pavlina Tcherneva, and others, who came together and here’s how they define – so PSE – here’s how they define the program.
This would be a job guarantee program that provides employment to all who need work by drawing from the pool of otherwise unemployed during recessions and shrinking as private sector employment recovers. It would be federally funded, it would pay $15 dollars an hour for both full and part time work, and offer benefits that include health insurance and childcare. Sounds pretty progressive, right? You don’t even have to pass a $15 an hour national minimum wage, because if the Federal Jobs Guarantee is $15 an hour-
Thomas: Oh, yeah!
Andrew: -people get that choice!
Thomas: Good point.
Andrew: They can say-
Thomas: They can be like “why would I work for your stupid job for $9 an hour?”
Andrew: Why would I work for you for $8, yeah, if I can make $15? That would also keep – this would preempt the Barrack Obama – the attack on Obamacare of “well what if people love their healthcare insurance?”
Andrew: You’re like yeah, somebody loves and $8 an hour minimum wage? Great. Okay. They can stay at their $8 an hour job.
Thomas: That’s a great idea.
Andrew: The reason I dug into this proposal is twofold. Number one, it’s way better than just increasing the minimum wage. Number two, the primary argument being deployed against the minimum wage is it’s inflationary. You’ve seen that from the dumb right, from people who have said “why don’t we just print more money blah blah blah,” which is an argument about inflation, to somebody who posted an argument, unfortunately, in the Opening Arguments Facebook community where their childcare provider sent back a little letter that said “you know, if this passes and it greatly increases our labor costs then your childcare costs will probably double.”
Thomas: Oh my god. There is nobody who deserves more money more than childcare.
Thomas: I feel bad about it. We pay a lot for childcare, but I don’t think the teachers, as my kids call them, that are watching my kids, I don’t think they’re making $15 an hour, and it sucks! I really want them to be making more money.
Andrew: I agree 100%
Thomas: They’re taking care of my kids! Come on!
Andrew: But let’s figure out – and this is what Wray and Tcherneva and the group decided to do. They used the standard, the textbook gold standard model for macroeconomic modelling produced by a guy named Ray C. Fair, and I know, L. Randall Wray, W-R-A-Y, and Ray, but there’s no connection between them. This is the standard model that is used in textbooks everywhere for how to model inflationary effects. Then they plugged in a bunch of different scenarios as to how to model the program, and they picked the worst outcomes. Okay? The most expensive, most costly. Here’s what they did:
“The model we use is the widely adopted Fair model, which has proven to provide a robust fit to real-world data over a long period of time. For the purposes of the simulation, we assume that the program pays $15 an hour … $31,200 annually for full-time work. We assume that the average work week is 32 hours, which includes a mix of full-time and part-time workers. The … nonwage benefit costs” (because remember, this includes health insurance and childcare) was “set to 20 percent and we assume that the program’s materials and other costs are set to 25 percent of wage costs.” In other words, we’re not just paying $31,000 a year, we’re also paying 25% of that in program administration costs and 20% in benefits. Those are worst case numbers, very few employers pay 20% of your salary in benefits. But, you know.
Then they took a look at four different scenarios, higher and lower questions about who would sign up. Then the question about whether the federal reserve would lower interest rates in order to stave off inflation, which is a pretty common assumption. As inflation is spiraling out of control, the fed lowers rates, that tamps down on inflation. That is leaning against the wind. They got the worst numbers with no federal reserve response, as you might imagine, so they erred on the said – and here, again, I’m quoting directly, “of the assumptions that were least favorable, most costly, most inflationary.”
Here’s what they found would be the effect of a nationwide federal jobs guarantee, $15 an hour with good benefits and complete security. (Quote) “We find that … 15.4 million new jobs would be created. 5 to 6 million participants would come from among the unemployed, 3 to 6 million would leave involuntary part time work” that is crappy jobs people have to take right now because they have no better alternatives, and about “5 million would reenter the labor force to obtain paid employment.” Remember, our unemployment numbers artificially exclude people who have just given up, they’ve stopped looking. That would boost real GDP by half a trillion dollars per year.
Andrew: And even with the boost to employment, that is over 19 million more new workers with more than 15 million in the program and 4 million new jobs created as a spillover effect to the private sector. (Quote) “the impact on inflation would be macroeconomically insignificant.”
Andrew: “The increase peaks at 0.74 percentage points in 2020” which this was a 2018 paper, so two years into the program. By the end of 2027, or nine years into the program, “the inflationary impact falls to 0.09 percent.” That is with no reaction by the Federal Reserve, by the way, or (quote) “essentially to white noise.” In terms of the impact on the budget, the most expensive the program would be, factoring everything out, is $415 billion dollars a year.
Thomas: Oh, so nothing?
Andrew: Averages falling between 1 and 2 percent of GDP, the highest average number being-
Andrew: 1.53 percent of the Gross Domestic Product, and that counts no benefits.
Andrew: So what are benefits?
Thomas: Yeah, this is like the most dismal picture and it’s still fine.
Andrew: Yeah, the most dismal picture is $415 billion dollars. That is one fifth of the bill we just passed.
Andrew: We passed a $1.9 trillion – and we should have – but 1/5 of that cost you could have a federal jobs guarantee program at $15 dollars an hour.
Andrew: And that does not count savings from diminishing costs of administering existing safety net programs, the $104 billion dollars-
Andrew: -spent on food and nutrition services, $74 billion for SNAP, $21 billion for child nutrition. It is just staggering how much good it would do, and that is if we assume that the jobs are not – and again, remember, 25% of the salary is set aside for program costs, which is reasonable with other job training programs. This assumes that the jobs are 100% make work. Person A digs a hole and person B fills it in.
Andrew: No, seriously.
Andrew: That’s how they model it. Now take what you said on our Q&A last night-
Andrew: Our infrastructure is a mess!
Thomas: Yeah, just clean everything!
Thomas: [Laughing] There’s so many jobs that would be awesome. Our country would look amazing if it was just like “yeah, you wanna work? Cool. I dunno, pick up trash on the sideway, who knows? Anything. There’s plenty of good things.”
Andrew: And we have a historical model for that.
Andrew: The Works Progress Administration. The Works Progress Administration employed eight and a half million workers over a 10 year time frame – over a 9 year time frame – 1935 to 1943. They built 650,000 miles of roads, 124,000 bridges.
Andrew: 40,000 schools, 85,000 public buildings, 4,000 utility plants.
Andrew: 16,000 miles of waterlines, 950 airports or airfields. The cost savings on infrastructure is estimated – and this is Mark Paul, I’ll also include the link in the show notes. If the infrastructure gap, our crumbling roads, bridges, highways, is not closed (quote) “it could cost the U.S. economy $3.9 trillion dollars in lost GDP.”
Andrew: “$7 trillion dollars in lost business sales, and 2.5 million jobs.” Averaged out to each taxpayer that is a $3400 dollar hit in your disposable income per year for each and every person in America. There’s my counterproposal for Joe Biden.
Thomas: Just a minor corrections so we don’t get emails, you flipped the inflation relationship. It’s been a while since macroecon so I had to double check, you lower the interest rates and that increases inflation, you raise ‘em to decrease inflation.
Andrew: Oh, okay, yeah.
Thomas: Other than that-
Andrew: You are correct, I alighted because we were running low on time, I want to read directly from the model so that it’s [Laughs] clear the error lies with me. This is Wray and Tcherneva. (Quote) “With the Fed’s reaction function ‘turned off,’ we assume that the Fed does not raise interest rates in response to faster economic growth as the program increases employment and GDP growth; with it turned on, the Fed is presumed to raise rates to (quote) ‘lean against the wind.’”
Thomas: Right, yup.
Andrew: I had said lean against the wind, I alighted over that-
Thomas: Yeah, I think you just flipped the word.
Andrew: Yeah. But I want to know that the – I don’t want anybody to think that my-
Thomas: Right right right.
Andrew: Malapropism there indicts these authors. These are unimpeachably brilliant economists who have modeled in a neutral way, in a highly conservative way, all of the implications of this program.
Thomas: Well you convinced me.
Thomas: Why don’t we just do this? Gosh.
Andrew: We should absolutely do it. That is – and that kind of gets to where I am. Am I frustrated at Sinema and Manchin have been saying? You better believe it. But the way in which you build support is not by coming out of the gate five weeks into the Biden presidency and doing a Ted Cruz thing.
Andrew: The way in which you build support is you go to the public, you say – and we’re gonna talk about this next week – we’ve passed in the House and we have 50+ votes in the Senate for voting rights, for a $15 an hour minimum wage, and that’s being lost due to procedures. If you think we should be given a chance to govern, write your representatives. That’s what you do, you build public capital, and then you go to Manchin and you go “look, if we can’t pass legislation you’re going to get voted out in favor of a Republican who can.”
Thomas: Yeah, yeah. [Sighs]
Thomas: If he’s not gonna blow it up to pass a voting rights act I don’t understand what he’s doing. I just want to clarify, the reason I’m more mad at Sinema is she’s not in a Trump State.
Thomas: He’s in a 68/32 Trump State, it’s a miracle that we even have Manchin. You know, I still want to pressure him, as I’ve said, as much as we can.
Thomas: But Sinema is just doing it out of this, like, I guess she thinks it’s good politics later on? I don’t get it, I genuinely don’t get why she’s doing-
Andrew: It’s worked so well for President Susan Collins.
Thomas: Yeah, what are you doing?
Thomas: Anyway, I just want to say on a personal note, you know, because I used to be conservative and I remember freshman year of college when I took econ, I took microecon and I had a brilliant professor and he was explaining the job market and how minimum wage actually creates unemployment, and I was like “well, I’m a conservative, say no more! That’s my number one argument, minimum wage? That’ll create unemployment blah blah blah blah blah.” I just want to note, for me I really came around over time to where I look at it kind of the other way, where it’s like what is the amount that someone should have if they are working full time? I genuinely believe you put your morals first. When we eliminated slavery, that eliminated jobs. That doesn’t matter. That created unemployment in that moment, but we don’t care because morally it’s the right thing to do, and I think that wage slavery is a similar moral issue.
If we think we need certain people to be working full time but be in complete, essentially, just a state of desperation all the time because we want a hamburger to be a little cheaper or a vegetable to be a little cheaper, I just think morally that’s inexcusable is the point I’m trying to make and probably not making it that well. That’s how I approach it now as I’ve changed my mind, so if anybody is like me where you were kind of worried or obsessing over the microecon aspects of it, wow, this’ll drive pressures to blah blah blah blah blah. I start from, especially in California, $30,000 dollars a year? In California?
Thomas: That doesn’t even pay rent. This is – I approach it that way. Morally speaking if someone is working full time, at all, they deserve to be making enough to pay rent, to buy food, to have a life. I don’t understand morally how you could say any other thing. If you want to talk high schoolers, blah blah blah, okay, well, they work part time so that’s a different story.
Andrew: I’m really glad you gave voice to that. Because, again, I approach this like the lawyer, which was I wanted to take what I think is the best, and certainly the most intuitive common sense argument for the other side where I have seen people make it in good faith. Look, yeah, I’m not talking about arguing with Uncle Frank who thinks that “oh you think burger flippers should make?” [Laughs]
Thomas: Yes. I do think burger flippers should make-
Andrew: What was the meme that was like “do you just have a list of people you hate?”
Thomas: [Laughs] I know! God.
Andrew: I approach this from that perspective, which is okay, let’s take the best argument the other side has and let’s see if that argument is, in fact, correct. But I certainly agree with you. If you’re persuaded by the moral argument, that is even if it is inflationary, but I want to tell you, the best evidence seems to suggest that it would be a blip and would then fade to (quote) “white noise.”
Andrew: Man, if we’re not willing to do that to let people have a living wage in employment, I don’t know where we are. Look, we should add, minimum wage won’t solve everything.
Andrew: It won’t solve the gig economy, it won’t solve part time workers who are being treated as contractors. There’s all sorts of additional stuff that it won’t solve, but let’s not let the perfect be the enemy of the good, let’s get out there and pass these bills.
Thomas: Boy, but I sure do think that your plan that’s [Laughs] you didn’t come up with it, but the plan you’re advocating, I mean that would solve a lot of those problems. If someone’s like “well I could do this horrible gig economy job, or go work for the public works for $15 dollars.”
Thomas: Anyway, alright that was a deepest of deep dives, but well worth it. Again, the takeaways are no, Kamala can’t just do this, that’s absurd. Republicans didn’t in fact do this when they could have for their similar Republican-y things, and that should tell you something. If not even Mitch McConnell would do this, that should tell you something, so utilize that when you encounter this bad faith argument.
[58:50.3] [Patron Shout Outs]
[1:01:05.6] [Segment Intro]
Thomas: Now it’s time for T3BE impossible quiz porkage! Here we go!
Andrew: Alright Thomas. A man has four German shepherd dogs that he has trained for guard duty-
Andrew: -and that he holds for breeding purposes. The man has “Beware of Dogs” signs clearly posted around a fenced-in yard where he keeps the dogs. The man’s next-door neighbor frequently walks past the man’s house and knows about the dogs’ ferocity.
Andrew: One summer day, the neighbor entered the man’s fenced-in yard to retrieve a snow shovel that the man had borrowed during the past winter. The neighbor was attacked by one of the dogs and was severely injured.
Thomas: Oh jeez.
Andrew: In a suit against the man, is the neighbor likely to prevail? A) No, because the neighbor knew that the man had dangerous dogs in the area – in the yard. B) No, because the neighbor was trespassing when he entered the man’s property.
Andrew: C) Yes, because the neighbor was an invitee for purposes of retrieving the shovel.
Andrew: Or D) Yes, because the man was engaged in an abnormally dangerous activity.
Thomas: God, this sucks, because this is one I should get but I probably will mess up. Well, I have to remember Eli’s Lava Emporium. Is having dangerous dogs something that’s like – is it something that’s one of those things? We’ve covered this. It doesn’t matter if you have post signs or whatever. If something’s dangerous enough you’re still liable no matter what, so there’s that kind of thing? I dunno if just having dogs – well, they’ve trained them for guard duty. Hmm. This is a very tricky one. I feel like I should know this because we’ve had enough stuff related to this, but I feel like there are many options I could get wrong here.
A, no because the neighbor knew that the man had dangerous dogs in the yard. I mean, that feels pretty good, especially because you don’t need to get your shovel, it’s not like a super critical thing. Logically speaking that sounds like the right answer, but it’s tough because B is no because the neighbor was trespassing when he entered the man’s property. Actually choosing between those is kind of difficult, I’m not sure which one takes precedence legal speaking.
C, yes because the neighbor was an invitee for the purposes of retrieving the shovel is probably my favorite answer we’ve ever had, I love that.
Thomas: Oh wait, because the man had borrowed it. Oh, okay, that makes it a little less ridiculous, but still, still ridiculous. I didn’t realize the man had borrowed the shovel, yeah, okay. Then D, yes because the man was engaged in an abnormally dangerous activity. So, D is the one that I think is actually maybe it, because I think there’s things you do that if it’s dangerous enough you’re just liable no matter what? It still feels weird, and this is why I’m gonna get it wrong, because that still feels wrong. It feels like okay, just if anyone, no matter how well you restrict your place or how many precautions you take, if some idiot climbs into your dog pit then you’re at fault. I wonder if – so this is what I’m remembering. If you have a toxic – just a lava pit, rather, just a pit of lava, there are just some things that you’ve covered that are so dangerous, no matter what you’re liable because it’s an abnormally dangerous activity.
Is having dogs that you’ve trained for dog duty an abnormally dangerous activity? You know, I think I’m gonna say yes. Here’s what I’m gonna do, I can’t wait to get this wrong. I don’t really – and this is almost a test taking strategy – I don’t know that I’ll be able to divine the correct A/B answer anyway, because I can’t remember which would matter first, the fact that he knew the man had dangerous dogs, or the fact that he was trespassing. I don’t trust myself to identify the correct one there, and so it’s almost worth it to pick D because I actually think D might be right? I’m leaning toward D anyway, the fact that that’s a different answer that allows me to sidestep the A/B issue, I think I’m gonna go with D. I think having killer dogs is an abnormally dangerous activity and it doesn’t matter how many signs you post about it, it’s abnormally dangerous, that’s the answer I’m going with.
In order to not be a coward I’ll try to pick the best A/B answer for Thomas’ 2nd Chance. I think it would be A. The fact that he knew … [Sighs] ugh, that’s tough. The fact that he knew would maybe come before the trespassing, but I don’t think it matters. I think the answer’s D. I’m between D and A, we’ll say, just for fun, and I’m choosing D, final answer.
Andrew: Alright, and a little bit of a games theory there from Thomas. If you wanna play along with Thomas, you know how to do that. Just share out this episode on social media, include the hashtag #T3BE; include your guess, your reasons therefore. We will pick a winner and shower that winner with never ending fame and fortune! Fame and fortune not guaranteed.
Thomas: Alright, that’s our show! Reminder, join us on Stereo every Wednesday, 5 pm Pacific, 8 pm Eastern time. Wednesday on that Stereo app, come follow @SeriousPod, @Torrez. It was a lot of fun, really good stuff last time, and you don’t want to miss it next time. Every Wednesday. And also, our patron Q&A on YouTube, Saturday, that’s this Saturday the 6th at 5 pm Pacific, 8 pm Eastern. Thanks Andrew for the deep dive, and thanks everybody for listening.
Andrew: Awesome, see you next week!