Letters from an American - December 21, 2024

Episode Date: December 22, 2024

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December 21, 2024. Shortly after midnight last night, the Senate passed the continuing resolution to fund the government through March 14, 2025. The previous continuing resolution ran out at midnight, but as Bloomberg's Congressional Budget Reporter Stephen Dennis explained, midnight is not a hard deadline for a government shutdown. A shutdown occurs only when the Office of Management and Budget issues a shutdown order, which they traditionally will not issue if a bill is moving toward completion. President Joe Biden signed the bill this morning, praising the agreement for keeping the government open, providing urgently needed disaster relief,

and providing the money to rebuild the Francis Scott Key Bridge in Baltimore after a container ship hit it in March 2024, causing it to collapse. This agreement represents a compromise, which means neither side got everything it wanted. But it rejects the accelerated pathway to a tax cut for billionaires that Republicans sought, and it ensures the

government can continue to operate at full capacity, Biden said in a statement. That's good news for the American people, especially as families gather to celebrate this holiday season. Passing continuing resolutions to fund the government is usually unremarkable, but this fight showed some lines that will stretch into the future.

First of all, it showed the unprecedented influence of billionaire private individual Elon Musk over the Republicans who in 2025 will control the United States government. Musk has a strong financial interest in the outcome of discussions, but House Speaker Mike Johnson, a Republican of Louisiana,

said he had included Musk, as well as President-elect Trump, in the negotiation of the original bipartisan funding bill. Then Musk blew up the agreement by issuing what was an apparent threat to fund primary challengers to any Republican who voted for it. He apparently scuttled the measure on his own hook since Trump took about 13 hours to respond to his

torpedoing it. Musk expressed willingness to leave the government unfunded for a month, apparently unconcerned that a shutdown would send hundreds of thousands of government workers deemed non-essential into temporary leave without pay. This would include about 800,000 civilian employees of the Pentagon, about 17,000 people from the National Aeronautics and Space Administration or NASA, and those who staff the nation's national parks, national monuments, and other federal sites. Federal workers considered essential would have to continue to work without pay.

These essential workers include air traffic controllers and federal law enforcement officers. Military personnel would also have to continue to work without pay. Taking away paychecks is always wrenching, but to do it right before the winter holidays would devastate families. It would hurt the economy too since for many retailers the holiday season is when their sales are highest. Musk, who doesn't answer to any constituents, seemed untroubled at the idea of hurting

ordinary Americans. Shutting down the government, which doesn't actually shut down critical functions by the way, is infinitely better than passing a horrible bill," he tweeted. In the end, Congress passed a bill much like the one Musk scuttled, but one of the provisions that Congress stripped out of the old bill was extraordinarily important to Musk. As David Dayen explained in the prospect, the original agreement had an outbound investment provision that restricted the ability of Americans to invest in technology factories in China.

Senators John Cornyn, a Republican of Texas, and Bob Casey, a Democrat of Pennsylvania, had collaborated on the measure, hoping to keep cutting edge technologies, including artificial intelligence and quantum computing, as well as the jobs they would create in America, rather than let companies move them to China. As representative Jim McGovern,

a Democrat of Massachusetts, explained, Musk is building big factories in China and wants to build an AI data center there, even though it could endanger US security. McGovern charged that Musk's complaints about the spending in the bill were cover for his determination to tank the provision that would limit his ability to move technology

and business to China. And, he noted, it worked. The outbound investment provision was stripped out of the bill before it passed. In the prospect, Robert Kuttner explained this huge win for Musk, as well as other provisions that were stripped from the bill before it passed. After years of fighting, Tammy Luby of CNN explained, Congress agreed to reform the system in which pharmacy benefit managers act as middlemen between pharmaceutical companies and insurers, employers, and

government officials. The original bill increased transparency and provided that pharmacy benefit managers would be compensated with flat fees rather than compensation tied to the price of drugs. The measures related to pharmacy benefit managers were stripped out of the measure that passed. That lost reform shows another line that will stretch into the future. Trump's team is working for big business. As Kutner puts it, Trump, who is allegedly a populist leader, tanked a bipartisan spending bill in order to shield the Chinese investments of the richest man in the world and to protect the profits of second largest

pharmacy benefit manager United Health Group, the corporation for which murdered executive Brian Thompson worked. Other measures stripped from the original bill were five different bills to combat childhood cancer. The idea that sick children were among the first victims of the funding showdowns sparked widespread outrage. While the Senate did not return the entire 190 million million worth of funding to the continuing resolution, Senator Tim Kaine, a Democrat of Virginia, pushed the chamber to pass the Gabriella Miller Kids First Research Act 2.0, devoting $63 million to extend the original measure that was passed in 2014 in honor of a Virginia girl who advocated for cancer funding until her death in 2013 at the age of 10. Representative Jennifer

Wexton, a Democrat of Virginia, had shepherded the measure through the House in November when it received only four no votes, all from Republicans. The Senate also passed a measure repealing two laws that have curtailed Social Security benefits for teachers, firefighters, local police officers, and other public sector workers. The Social Security Fairness Act repeals the 1983 Windfall Elimination Provision, which cuts Social Security benefits for workers who receive government pensions and the 1977 government pension offset which reduces Social Security benefits for spouses and survivors of people who themselves receive a government pension.

The House passed the Social Security Fairness Act in November by a vote of 327 to 75 with 72 Republicans and three Democrats voting no. In the Senate the vote was 76 to 20 with 27 Republicans voting yes and 20 voting no. Senator Rand Paul, a Republican of Kentucky, proposed offsetting the cost of the measure by raising the age of eligibility for social security to 70 over 12 years. That proposal got just three votes. Even those Republicans who would like to cut social security told Bloomberg's Stephen Dennis that such cuts would have to be bipartisan because the programs are too popular for Republicans to cut on their own.

the programs are too popular for Republicans to cut on their own. Both the Gabriella Miller kids first research act 2.0 and the Social Security Fairness Act had strong bipartisan support. Senator Susan Collins, a Republican of Maine, first introduced a measure in 2005 to address the horrendous inequity in Social Security benefits under the previous system. Senator Sherrod Brown, a Democrat of Ohio, famous as a champion of workers, pointed out that the new law will benefit bus drivers and cafeteria workers in the public schools as well as the teachers. And that bipartisanship on issues about which lawmakers feel strong public pressure is another line that could stretch into the future. Finally, the struggle over the continuing resolution shows, once again, that Trump is weaker than his team claims.

While Musk got the Chinese investment restrictions stripped out of the final bill, Congress passed the measure without Trump's demand for freedom from the debt ceiling in it. This failure comes after Senate Republicans rejected Trump's choice for Senate Majority Leader and after his first nominee for Attorney General, former Representative Matt Gaetz, a Republican of Florida, had so little support he was forced to withdraw from consideration. Trump has been angling to get Florida Governor Ron DeSantis to name his daughter-in-law, Lara Trump, to the Florida Senatorship that

will be vacated if Senator Marco Rubio becomes Secretary of State despite her lack of any previous experience in elected office. But that plan, too, seems to have gone awry. Today, Lara Trump announced, After an incredible amount of thought, contemplation, and encouragement from so many, I have decided to remove my name from consideration for the United States Senate. Thank you.