Preview

As expected, over the weekend Donald Trump selected Amy Coney Barrett to fill the open seat on the Supreme Court. The plan is apparently for confirmation hearings within two weeks and a vote on the Senate floor within four. Democrats are finally talking about using procedural tools to slow down the Senate, although they haven’t brought out all of the big guns yet.

Nancy Pelosi could have the House passed privileged resolutions that would have to take priority over the Court vote—War Powers Act resolutions, Congressional Review Act, even impeachment—but there aren’t any plans in that direction yet. It’s in the interest of the Democrats to do so, because Republicans have far more sitting Senators who need to be outside of Washington to campaign. That’s how this vote could be pushed into the lame duck session.
But whether Barrett is confirmed before or after the election, and one of those seems likely given the determination of Senate Republicans, what Democrats can control is their approach to the nomination. There are a number of potential points to make: abuse of norms, the unusually rapid process, the threat to abortion, or even the reinforcing of the worst tendencies of the Roberts Court, given Barrett’s rulings on corporate power. But this is Unsanitized, and the reason I’m talking about this battle here is that Democrats have decided to go all in on the Barrett nomination’s impact on healthcare.

There just happens to be this big healthcare case getting heard the week after the election that would in underpants gnome fashion leaps from the individual mandate being zeroed out to eliminating the entire Affordable Care Act. The fact that we’re in the middle of a pandemic as this is being considered almost doesn’t need to be said. At a time when the only recourse for tens of millions who have lost their jobs and their healthcare is to use the tools of the ACA to get covered, throwing that system into upheaval would be a significant hardship. And of course, healthcare and the Republican drive against it was a winning message in the 2018 midterms.

The healthcare argument is also a process argument. Because of the Court schedule, you can credibly make the case that the “real reason” for a rush to install Barrett is to get her on the bench in time to hear the case to throw out the ACA. John Roberts may align with the liberals on that case, but Barrett’s presence could flip the verdict from a 4-4 deadlock to a 5-4 victory to toss the law. (It’s entirely possible that this is such a ridiculous case that even conservative jurists will vote it down, and Democrats could pass a one-line amendment to defuse the threat. But the threat is absolutely there.)

So you’re seeing unusual message discipline from the Democrats, who aren’t lunging for the process or norm argument. “We must focus like a laser on health care because Judge Barrett’s record is so clear on this issue,” Senate Minority Leader Chuck Schumer (D-NY) wrote in a Dear Colleague letter. My inbox is a testament to his suggestion being heard.

“In the midst of an unprecedented public health crisis, they are willing to ram through a Supreme Court nominee—within days—who will vote to destroy the Affordable Care Act,” wrote Sen. Bernie Sanders (I-VT). “This nomination threatens the destruction of life-saving protections for 135 million Americans with pre-existing conditions together with every other benefit and protection of the Affordable Care Act,” wrote Speaker Pelosi. You don’t see Sanders and Pelosi linked on messaging so often. Most other Democratic politicians referenced healthcare in their reactions to the Barrett nomination. You can expect the confirmation hearings to follow this trend.

This litany baited Trump into tweeting that the Supreme Court terminating the ACA would be “a big WIN for the USA!” Schumer immediately seized on this. And of course, the healthcare frame matched Joe Biden’s talking points as well; he deflected every question in his weekend press conference back to this.

This has almost no chance of preventing Republicans from moving forward on the nomination, but it’s solid politics. As Stan Greenberg explained in our last issue, focus groups show deep concern with healthcare and don’t want it undermined any further. There are several races where marginal voters could swing away from Republicans who show a desire to return the healthcare system to Bush-era chaos—Iowa, North Carolina, Georgia, Montana, South Carolina, even Kansas and Texas at the margins.

The pandemic could also play a role in the “instead of” debate. As in, “instead of working to get help to millions of unemployed Americans, they are dropping everything to confirm an extremist justice.” That was approximately the approach of Rep. Tim Ryan (D-OH), and it’s a decent side topic. But the primary one will be healthcare, with the backdrop of people continuing to get sick and die from COVID-19. It works politically and with a few procedural breaks could work to at least slow the nomination, too.

I have been saying for a while that the greatest near-term financial risk is to commercial real estate, the value of which has cratered in the pandemic. Now we have some dollar figures to look at. A review of appraisal data at the Financial Times finds commercial properties at a 27 percent loss on average since earlier this year. Several hotels in the sample had not paid loans since March or April.

This data comes out of loans that had been securitized into commercial mortgage backed securities (CMBS), the mall-and-hotel version of the residential MBS from the financial crisis. As Bill McBride notes, the CMBS market is smaller than residential MBS was at the time. That doesn’t mean there won’t be a lot of pain from across-the-board drops in valuation of 25-30 percent. What it likely portends is consolidation, with a couple lenders handling all the malls in the United States, a direction we’re already headed toward. If malls just collapse as even lenders decide they don’t want them, the impact on property taxes for dozens of communities will be even more stark. Keep watching this space.

The experts are warning of a fall surge in coronavirus cases. We’re already seeing it in several red states, as well as Wisconsin. (CNN; Huffpost; The Atlantic)
A sampling of dialysis patients reveals only 10 percent of the country has antibodies, meaning there’s a lot of room left to run for the virus. (The Lancet)
With the pandemic comes consolidation, as smaller companies get sucked up. (Los Angeles Times)
Globally, we’re seeing an increase in child labor as families grow desperate. (New York Times)
Pelosi planning a new “proffer” to the White House on coronavirus relief, but I wouldn’t expect much out of it. (Bloomberg)
Half of Americans who lost their job in the economic collapse still don’t have one. (Vox)
The pandemic pet boom. (CNBC)
A little town in Vermont has been overrun by pandemic escapees from the bigger cities. (New York Times)