Pelosi Powerbroker Mystique Hits Progressive Brick Wall

Dysfunction in Washington finally caught up to previously bulletproof US equities this week.

Markets felt a bit tense to kick off the fourth quarter after Nancy Pelosi was forced to abandon a late Thursday vote on a bipartisan infrastructure bill amid opposition from Progressives who held out for promises on Joe Biden’s broader fiscal agenda, which includes massive spending on social programs.

Pelosi was adamant that the vote would go forward Thursday, but news of Joe Manchin’s red line on spending hardened Progressive opposition. They’ll keep trying.

As hopes of a Thursday night deal faded, moderate Democrat Josh Gottheimer contended lawmakers were just “grabbing some Gatorade and Red Bull.” Just hours previous, he claimed to be “1,000% sure” of a Thursday vote. Ilhan Omar lampooned Gottheimer. “In Congress, we don’t make predictions like this until we know we have the votes,” she said. “Some of us get this, others bluff and fall on their face.” (Ouch.)

Whatever happens Friday (and beyond), this week made it clear that Pelosi, for all her pretensions to being a powerbroker among powerbrokers, has met a Waterloo of sorts in Progressives. It’s not just capable leadership from Pramila Jayapal who, frankly, just sounds better on television than Pelosi. And it’s not just the star power wielded by Omar and Ocasio-Cortez. Rather, Progressives believe reality shifted in their favor in 2020, an epoch-making year during which the overlapping nature of myriad societal inequities was laid bare. The “radical liberal” label increasingly comes across as strained and desperate — gratuitous libel from lawmakers who’ve run out of ways to justify a system rife with injustices.

You could argue that the absence of Donald Trump from the scene (even if “the scene” just means social media) is making things harder on Pelosi. Trump didn’t so much “resort to libel” as he did employ it as a matter of course — he’s an inherently libelous individual. He’ll also sue you for libel. He knows libel backwards and forwards. There was nothing “desperate” about it when Trump castigated Progressives as “radicals.” It was just the standard demagoguery. Par for Bedminster. And it resonated. Or at least among some voters it did. Sure, it produced despairing eye rolls from more than half the country, but they weren’t the same kind of eye rolls elicited by a floundering Joe Manchin who, during ad hoc comments to reporters on Thursday, said “I’m not a liberal in any way, shape or form.”

One problem for markets in all of this is that it isn’t clear who’s in charge or who supports what. Pelosi claims to be the champion of Biden’s agenda, but rushing a vote on the infrastructure deal without assurances (any kind of assurances, really) from Manchin is consistent with her remarks from last week, when she told ABC that the top line social spending number would “self-evidently” be lower than $3.5 trillion. And notwithstanding his own aspirations to securing Progressive bonafides, Biden himself is probably amenable to compromise on the top line spending figure.

Progressives, by contrast, are sticking with the number. Sure, they may be forced to retreat as early as Friday, but the standoff calls into question Pelosi’s capacity to bring Progressives to heel. I’ve long contended that Democrats should stop sidelining their stars on the assumption that Americans will continually be duped by the “radical liberal” canard. Americans see the same old faces when they turn on the news each evening. And they see the same old ineptitude and gridlock.

The country overwhelmingly distrusts Congress. In Gallup’s polling, public approval of US lawmakers hit a 12-year high in March — “all the way up” at 36%. It hasn’t been above 50% in nearly two decades. In the entire history of Gallup’s polling, the only time it’s been above 75% was in the immediate aftermath of 9/11 (figure below).

It’s been as low as 9 — that’s nine.

So, as far as public opinion goes, the situation simply can’t get much worse. Note that as laughably bad as 36% (the 12-year high hit in March) was, it coincided with the leftward shift that manifested in more fiscal stimulus.

Just before midnight, around a half hour after Pelosi abandoned a Thursday vote on the infrastructure deal, Omar said she was “especially proud” to lead the Progressive whip team. She called Jayapal “fearless” and said Progressives will “deliver President Biden’s agenda for the people.”

Even if Biden and Pelosi can’t.