Political Dysfunction Confronts Inflation and Debt

Special Guests: Paul Hodes, Matt Robinson

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This week on Facing the Future, we looked at congressional dysfunction; whether it has grown in recent years and why it matters. Our guests were former Congressman Paul Hodes, Democrat of New Hampshire, and political analyst Matt Robison, who served as Hodes’ congressional chief of staff. Concord Coalition Policy Director Tori Gorman, also a Capitol Hill veteran, joined the conversation.

Later in the show, Concord’s Chief Economist Steve Robsinson joined Tori and me for a roundup of recent developments in Washington regarding the Build Back Better Act, the debt limit, and inflation.

In our opening segment this week, we considered whether Congress has become dysfunctional. There seems to be evidence on both sides. Every year we’re threatened with a government shutdown before the annual appropriation bills are passed; we have repeated threats of default over the debt limit, and it seems impossible to reach consensus on a range of issues. On the other hand, Congress did move swiftly and aggressively last year on COVID relief, and earlier this year it passed a major infrastructure bill with bipartisan support.

We asked Hodes and Robison if the apparent congressional dysfunction is just a matter of the usual ugly sausage-making, or whether there are deeper forces at work.

“Yes and no,” said Hodes. “It’s certainly uglier than it was when I served in Congress” (2007-2011). He noted that some things have gotten done, but noted that on a recent visit to Washington he encountered “doom, gloom and despair on the Democratic side of the aisle about the way it feels; about their ability to communicate with the other party on anything. And looking forward, there is not a lot of sunny optimism.”

The effect of social media over the past decade has been “insidious,” Hodes said. “While it has democratized the debate, it has amplified extreme voices in our political system that otherwise never had the means to be out there in the public square. That has led folks in both parties to cater to the extremes of their constituencies and I don’t think it has helped our political system.

Robison agreed that there has been a change. With partisan divisions so deep, he suggested that the best way to get something done at the staff level is “don’t get noticed because as soon as you’re on the partisan warfare radar you’re sunk.”

Gorman added that the most surprising change for her is the extent to which bipartisanship has been punished. Bipartisan bills used to be thought of as exemplary, (“quick, quick, let’s go to the floor!”). “But now,” Gorman said, “just look at what happened with the bipartisan infrastructure bill. Several Republicans voted for that piece of legislation and now there are members of the House who are saying that those who did so should be penalized. That has been shocking to me.”

In our Washington update segment, Steve Robinson took note of the fact that the Federal Reserve Board has stopped using “transitory” to describe higher inflation. “It appears to be somewhat baked in the cake,” he said. “How big the cake becomes and how many layers it has remains to be seen.”

Robinson downplayed the possible impact of the Build Back Better Act on inflation. “In the grand scheme of this, Build Back Better is not really big enough to stoke inflation or cure inflation. There are numerous provisions that cut both ways. Some of them make the problem worse, some of them make the problem better. What the net effect is going to be is too early to tell, but I think it’s unlikely the effect will be very large,” he said.

Gorman then explained how “good policy and good politics” came together to pass a $2.5 trillion increase in the statutory debt limit – to about $31 trillion – that is expected to give the federal government enough borrowing authority to last beyond the 2022 elections. The key was a one-time exemption from the Senate filibuster that allowed the debt limit increase to pass with no Republican votes. The good policy was that a potentially devastating default was avoided and the increase was enough that Congress won’t have to deal with the issue again until after the next election (hopefully). The good politics were that Republicans didn’t have to lend their votes to the increase and Democrats didn’t have to enact large spending cuts in exchange for Republican votes.

Gorman and I also discussed the ramifications of a new CBO report showing that the cost of extending several provisions of the House-passed Build Back Better Act beyond their scheduled expiration dates, assuming no additional offsets, would increase deficits to a total of $3 trillion over 10 years. You can read The Concord Coalition’s statement on that CBO report here.

Hear more on Facing the Future. I host the program each week on WKXL, NHTalkRadio.com (N.H.), and it is also available via podcast. Join me and my guests as we discuss issues relating to national fiscal policy with budget experts, industry leaders, and elected officials. Past broadcasts are available here. You can subscribe to the podcast on SpotifyPandoraiTunesGoogle PodcastsStitcher or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.

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