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**JANUARY 23, 2023**

Kuttner on TAP

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**** Is Kevin McCarthy's Secret Weapon Joe Biden?

Biden has a history of needlessly capitulating to Republicans in budget
negotiations. His new chief of staff, Jeff Zients, is even worse.

In the infamous fiscal cliff deal
<[link removed]>
of 2012 that led to a permanent extension of most of the Bush tax cuts
and an automatic formula of more than a trillion dollars in spending
cuts over a decade, Senate Democratic leader Harry Reid was hanging
tough. Democrats held the stronger hand because the Bush tax cuts of
2001 and 2003 were expiring. Not reaching a deal would have resulted in
massive tax increases for the wealthy. And Reid wanted to go over the
cliff and then negotiate a new tax plan.

But Barack Obama sent his vice president, Joe Biden, to negotiate a deal
with his old colleague Mitch McConnell behind Reid's back. Biden and
the Democrats got rolled
<[link removed]>.
Reid was so mad that he threw the White House's proposed list of
concessions into his office fireplace
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In 2013, at the insistence of an outraged Reid, Obama barred Biden
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from that year's budget negotiations, which led to a government
shutdown, but ultimately a deal with no giveaways to Republicans.

Now, we are on the brink of even more momentous budget negotiations.
House Republicans, who are far more extreme and less crafty than
McConnell, have threatened to allow the U.S. to default on the public
debt, unless Democrats agree to crippling cuts, including in Social
Security and Medicare. Once again Democrats have the better hand, if
they will only play it well.

The strategy of the Democratic congressional leadership is simple.
Don't give an inch. Let Republicans take the government into
default-and take the heat for the massive public backlash when Social
Security checks don't go out. Even if McCarthy and the crazies revel
in the wreckage, enough Republicans will soon vote with Democrats to
increase the debt limit.

This time, Biden is president and can't be sidelined. So far, he has
talked a good game, saying that he won't negotiate. That remains to be
seen.

Sources in the congressional Democratic leadership tell me that when the
FY 2023 omnibus spending bill was being negotiated in the lame duck
session, they constantly had to fight the White House tendency to make
concessions before the negotiations even began. That bill had impressive
spending increases, including full funding of all the industrial policy
and climate initiatives and more money for the NLRB.

All this is to the credit of the congressional leadership, not the White
House. According to my sources, the current White House chief of staff,
Ron Klain, was far too eager to make concessions in order to get a deal,
despite the fact that Democrats in Congress had the discipline and the
votes. And his successor, Jeff Zients
<[link removed]>,
is likely to be worse.

For starters, Zients is from the plutocratic wing of the Democratic
Party, having become very rich from taking two David Bradley ventures
public, the Advisory Board Company and the Corporate Executive Board.
When he was 35,

**Fortune** estimated his net worth at $149 million.

He them became head of the Cranemere Group, a holding company with many
ventures in the health care field. The

**Prospect** has documented
<[link removed]> a series
of Cranemere actions that show contempt for the public interest,
including tens of millions in payments to settle allegations of Medicaid
and Medicare fraud, before Zients took a leave from Cranemere to become
Biden's COVID-19 vaccine czar, a job that he abruptly left. He also had
no problem joining the board of Facebook in the wake of the Cambridge
Analytica scandal.

In the Obama administration, Zients did two stints as acting OMB chief,
where he was allied with other fiscal hawks such as Bruce Reed, now
another Biden senior staffer. Zients then became head of Obama's
National Economic Council. After Biden was sidelined as White House
negotiator following the disastrous fiscal cliff deal, it was Zients who
took over.
<[link removed]>

He reveled in the age of austerity. In an April 2013 press conference,
Zients went on and on
<[link removed]>
about how many cuts the White House was imposing on the American people.
"Democrats and Republicans have worked together to cut the deficit by
more than $2.5 trillion," Zients said. This was a time of slow economic
and job growth, and austerity made it worse.

Zients is likely to reinforce Biden's own propensity to make a bad
deal. This is not because Zients is a lousy negotiator, but because he
is a committed budgetary conservative.

So on the Democratic side, there are now two opposite scripts. One calls
for advance negotiations on budget cuts, in a futile effort to appease
McCarthy and company. This is either a fool's game-or a more cynical
fiscal conservative's game.

Joe Manchin and Kyrsten Sinema
<[link removed]>
have already met with Republican counterparts to discuss cuts. And on
the House side, corporate Democrat Josh Gottheimer
<[link removed]>
of New Jersey has been conferring with Republicans from the "Problem
Solvers Caucus" to pursue the same kind of deal. In the wings, McConnell
is waiting to play the role of closer, working with his old chums Biden
and Zients.

The other script calls for letting Republicans bear the onus of denying
people their Social Security checks and other valued services. Is this
even a close question? If strategic sense prevails, it will only be
because the Democratic congressional leadership save Biden and Zients
from themselves.

~ ROBERT KUTTNER

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Wall Street's Big Bet on Rewiring America
<[link removed]>
Ithaca has put its Green New Deal in the hands of a green private equity
fund, a private foundation, and a Goldman Sachs-backed software
company. BY LEE HARRIS

Senate Democrats Finally Control Committee Majorities. What Now?
<[link removed]>
Here are nine practical and urgent suggestions. BY HENRY BURKE

The Smart Bipartisan Plan to Shore Up Social Security
<[link removed]>
Bill Cassidy and Angus King propose an American social wealth fund. BY
RYAN COOPER

 

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