Even in an election year, nothing succeeds in Congress like failure
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Version 0 of 1. The story of Congress over the past two years has been the story of failed legislation. In the months leading up to November’s midterm elections, Congress introduced, debated and voted down several pieces of legislation that were designed to address financial issues facing ordinary Americans: student loans, minimum wage, labor issues. The fallout from the egregious inaction? Just a little scolding, but no real political consequences so far. “Do you stand with the billionaires?” Elizabeth Warren asked MSNBC’s Chris Hayes after a crucial bill she introduced got voted down by Republicans. “Or do you stand with the students?” In an election in which the Republicans have trained their guns at Obama’s performance, Democrats are instead focusing on issues core to their policies supporting liberal economic issues with their “Fair shot for all” campaign, steering clear of the president’s declining popularity. “It’s very difficult for Democrats to avoid the fact that voters will be thinking about the president”, says Dr Robert Erikson, a Columbia University professor and expert on American political behaviour. A strange dynamic of the midterms is that voters move to the opposite direction as soon as one party controls the White House. As a result, a liberal White House generally suffers as voters move to a conservative position to correct for policies that may be too left of center, Erikson says. Even as they risk losing the Senate, Democrats are using legislative failures as ammunition in a stab to retain control this November. Here’s a walk through the withered garden of financial legislation. Student loans and barking up the wrong tree “Our children shouln’t be burdened by debt. They should be chasing their dreams” declares Jeanne Shaheen (D-NH) in a TV ad for her re-election. Student loan debt is a talking point in several campaigns in the upcoming elections, taking off from the 2012 election year when the conversation on student debt exploded. Elizabeth Warren’s (D-MA) bill to refinance student loans from before 2010 and those from private lenders to current interest rates did not pass the vote to end debate. The Bank on Student Loans Emergency refinancing act, if enacted as law, would help 25 million people refinance their debt from before 2010 to 3.86%. Republicans wary of raising taxes blocked the bill in the Senate. The politics of the bill weighed it down. Democrats consider student debt a “kitchen table” economic issue while Republicans treat it as a matter of government overreach, explains Mark Huelsman, a senior policy analyst at Demos, a public policy think tank. “Senate Democrats’ [student loan refinancing] bill isn’t really about students at all. It’s really all about Senate Democrats,” minority leader Mitch McConnell (R-Ky) said. When the existing interest rate of 3.4% on Stafford loans was due to expire on 1 July in 2013, there were at least three bills that failed cloture in the Senate, leading to a dramatic cliffhanger solution. Congress found a solution with only two days to spare and extended the 3.4% rate for an additional year, passing it as a provision in a Moving Ahead for Progress in the 21st Century Act, a wider bill focused on surface transport. In August, Congress finally passed a House bill titled the Bipartisan Student Loan Certainty Act of 2013 that changed how the interest rate for Stafford loans are set. Even if Warren’s recent attempt to pass a refinancing bill failed, her positioning as the leading voice on student debt policy issues can only strengthen her political status, says Huelsman. The Massachusetts senator’s popularity is on the rise amidst murmurs of her running for the highest office or more realistically as a potential running mate to Hillary Clinton in 2016. Nevertheless, President Obama stepped in to sign an executive order to include 5 million additional borrowers in a program that caps student loan interest rates at 10%. There is little chance the conversation around student debt will change track after the elections. “Unfortunately, Congress has normalised student loans,” Huelsman says, referring to how politicians have so far focused only on interest rates, without taking a preventive approach towards student debt. On Labor issues: Dems Propose, the GOP disposes. The Minimum Wage Fairness Act proposed gradually raising the federal minimum wage to $10.10 over a thirty month period. It followed President Obama’s executive order to raise the minimum wage for federal contractors to $10.10 an hour in February. Republicans predictably blocked the bill countering minimum wage raises with the issue of possible job losses. In a news conference following the vote, bill sponsor Tom Harkin (D-IA) told journalists that the Republicans who opposed the minimum wage hike would find election retribution: “The American people will hold them accountable this November,” he said, betraying the Democrats’ hope of painting the Republicans as blanket opposers of legislation pushing for economic equality. Democrats had introduced the Paycheck Fairness Act legislation in the Senate only a week before, targeting employers and barring punitive measures against workers who share wage information. Sponsor Barbara Mikulski’s (D-MD) proposed legislation put the onus on employers to justify the wages paid for similar work, allowing employees to sue their employers for wage discrimination. “I do get emotional. I get angry, I get outraged, I get volcanic,” said Mikulski on the issue of the gender wage gap. The bill failed cloture after Republicans argued that the law would not directly help women. The bill was part of a larger Democratic effort to raise economic issues that heavily impacted women – the very demographic that influenced their win in 2012. The bill came months after another failed attempt to extend unemployment benefits introduced shortly after the 2008 recession for a period of three months until 31 March 2008. Republicans objected to this legislation because it did not explain spending cuts for the $6.14bn bill this would rake up. The sponsor, Jack Reed (D-RI) is up for re-election this November riding on his popularity as a leading supporter of liberal economic policies. Earlier in the year, House Democrats shot down the Federal Employee Tax Accountability Act of 2013, which mandated the federal government from terminating tax-delinquent employees while still voting to keep out federal contractors who were behind on taxes. Freddie Mac and Fannie Mae: The end is near, ETA unknown In May this year, the Senate Banking committee approved a bill to wind down Freddie Mac and Fannie Mae. The mortgage giants who needed a combined $187.5bn in bailouts after the economic crisis of 2008 are now profitable and have repaid to the treasury nearly $25bn more than the amount received from the federal government. The legislation, backed by the White House, will phase the firms out over five years, replacing them with a federally supported private insurance system called the Federal Mortgage Insurance Corporation (FMIC). The FMIC has been described as a “mortgage insurance fund for the system to protect taxpayers against future bailouts”. The bill hangs in the balance as the bipartisan initiative finds opposition which too is bipartisan. Democrats Charles Schumer (NY), Elizabeth Warren (Mass.), Sherrod Brown (Ohio), Jack Reed (RI), Robert Menendez (NJ), and Jeff Merkley (Ore.) have expressed opposition to the bill, stating that it does not do enough towards achieving Freddie Mac and Fannie Mae’s original goal of providing affordable housing. With both sides of the aisle unhappy with the bill, Congress has decided to cool its heels until after the elections. Perhaps because this legislation is meant to go beyond election soundbites. |