Our guest columnist this week is CNBC Economics Producer and politics guru, Jackson Burke.
All eyes may be on Joe Biden today, but Bernie Sanders could be the key man to watch in the weeks ahead.
The Democrats' pair of buzzer-beater wins in Georgia has effectively given them control of the Senate now, which comes with perks like chairing the various Senate committees and determining which legislation will make it to the floor. That likely means Chairs like Sherrod Brown on the Senate Banking Committee, and Ron Wyden heading Finance.
However, there is another seat of power to keep an eye on: Bernie Sanders is the ranking member on the Senate Budget Committee, and will be a near-lock to take over as Chair. Budget isn't typically the stuff about which political thrillers are written, but the Biden administration has big, multi-trillion dollar plans, and the Committee has a key role to play if any of those plans hope to see a Presidential signature.
Why? If President Biden is going to get a massive bill over the finish line in his first year, he's almost certainly going to have to do it through reconciliation, the process that allows the Senate majority to bypass the filibuster and pass bills with a simple majority – the same method the Republicans used to get the Tax Cuts and Jobs Act done in 2017.
But the very first step toward reconciliation requires the House and Senate Budget Committees to pass identical budget resolutions, containing specific instructions for what a bill passed via reconciliation would do. So any big spending bill that, for example, raises corporate or capital gains tax rates, or puts tons of money toward infrastructure or green energy, will have to originate in a Committee chaired by the progressive Sanders.
Sounds like a big win for the progressive agenda. But here's the twist: in a 50-50 Senate, the committees themselves may end up gridlocked.
That's what happened in 2001, the last time the Senate was split 50/50. Then-Majority Leader Trent Lott and Minority Leader Tom Daschle worked out a compromise where each committee would have an equal number of Republicans and Democrats. In the case of a tied committee vote, bills would receive a vote from the full Senate on whether or not to discharge, with a time limit of four hours for debate. Lott and Daschle recently joined forces again to write a must-read op-ed in The Washington Post, laying out the difficulties of operating a split-down-the-middle Senate--and that was in a far less polarized time.
So even a Budget Committee chaired by Sanders could end up deadlocked on everything, forcing each bill to the floor for debate and slowing the business of the Senate--and President Biden's agenda--to a crawl. That is something investors, especially those banking on big-ticket Covid relief and infrastructure bills, may not have realized yet.
Now, Schumer and McConnell could cut a deal to deny Bernie Sanders the Chair position, but that seems unlikely. The 2022 midterms will be a jump ball for control of Congress, and Schumer probably won't want to give his party's motivated progressive wing a reason to stay home in protest.
While the Georgia wins may have delivered Democrats a "light-blue wave" outcome, the end result out of Congress could still be a bright shade of gridlock purple.
Thank you, Jackson! -Kelly