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We’re hearing a lot about an inability to compromise in Augusta and Washington. At the moment, Republicans are complaining that they are being left out of dealmaking with Democrats, who control both Maine state government and the federal government. After the next election, we wouldn’t be surprised to see the situation reversed, with Democrats arguing that Republicans are failing to include them in negotiations.
Rather than just write off dysfunctional government as a symptom of our hyper-partisan political atmosphere, it would be helpful to first remember that compromise usually means both sides in a negotiation give up some things. That typically requires that there are reasonable positions on both ends of the bargaining table.
There were a lot of complaints over the weekend that Democrats rammed a stimulus bill through the U.S. Congress without working with Republicans. The stimulus bill will help struggling Americans pay their bills, feed their families and better afford child care. It will also help schools, rural health care providers and state, local and tribal governments that have seen revenues drop during the pandemic. It also carried a hefty price tag — $1.9 trillion, some of which will be added to the national debt.
“I actually believe that we make better legislation if we have two parties work together on something,” Sen. Mitt Romney, a Republican from Utah, said during debate on the bill. “In this case, we’ve crafted a piece of legislation that our party hasn’t had any involvement in whatsoever.”
Yes, Democrats used a budget maneuver called reconciliation to pass the legislation with a simple majority, rather than the 60 votes usually needed in the U.S. Senate. It was the same maneuver Republicans used to pass roughly $2 trillion in tax cuts in 2017 without any Democratic support.
Democratic leadership turned to reconciliation on the relief plan in the Senate after it became clear there wasn’t enough Republican support for anything close to the overall size of President Joe Biden’s $1.9 trillion proposal. Instead, a group of Republicans proposed a much smaller bill — about $600 billion — while many economists have been saying that bigger is better when it comes to offering relief to American workers, families and businesses that are still struggling during the COVID pandemic and to stimulate the economy.
The party caucuses were so far apart, this was a divide that was unlikely to have been bridged.
This does not mean that Republicans had no influence on the bill, but their influence would have been much greater if they’d offered an alternative that was closer — in cost and scope — to the Democratic plan. Some aspects of the bill, but not its overall scope, were pared back to address opposition from moderate Democrats and some Republicans.
Meanwhile in Augusta, legislative Republicans, along with many businesses, pushed Democrats to essentially accept their position on tax conformity. Earlier in the year, Gov. Janet Mills first proposed that the state not conform with a federal tax law change that made Paycheck Protection Program loans tax free, saying the state could not afford to mirror the federal tax break. The governor proposed to allow businesses to write off PPP-related expenses, which include payroll, rent, utilities and some other business costs, but to treat forgivable PPP loans as income subject to state income taxes.
After pushback from many businesses and Republicans, Mills later proposed not taxing the first $1 million in PPP loan funds, a plan she said would help 99 percent of all Maine businesses, especially the smallest ones.
Last week, the governor put forward — and the Appropriations Committee approved — a budget change that didn’t tax any PPP proceeds and allowed the write-offs for all Maine businesses that received forgivable PPP loans. It also included tax breaks for Mainers who received unemployment benefits during the pandemic. Typically, unemployment benefits are subject to state and federal income taxes.
Rather than call this a win, Republican leaders are pushing for additional tax conformity and have blamed Democratic leaders for not negotiating with them.
Negotiating is the art of give and take. When two parties are very far apart — for political, philosophical, financial or other reasons — it may be impossible to find middle ground and the party with the most power will push its position forward. This isn’t ideal, but it is too often how governing happens in America when there isn’t much effort to find consensus. On the other hand, when one party gets the other to essentially accept its position, that can be considered a successful negotiation for that party.
