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Part 2 – Sarah Binder Weighs In: Institutional Hardball – in Congress and the White House – and the legislative road ahead

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This is part two of  a guest post by Janna Deitz, Kluge Center Program Specialist in Outreach and Partnerships. Find the first post here.

Sarah Binder is the most recent Kluge Chair in American Law and Governance, Professor of Political Science at George Washington University, and senior fellow in Governance Studies at the Brookings Institution. An expert in Congress and legislative politics, her current research explores the historical and contemporary relationship between Congress and the Federal Reserve. Her co-authored book, “The Myth of Independence: How Congress Governs the Federal Reserve” was published by Princeton University Press in 2017. She is associate editor of The Washington Post’s Monkey Cage blog and is a member of the American Academy of Arts and Sciences.


Janna Deitz: Are any institutions in Washington immune from institutional hardball? You’ve also studied the Federal Reserve. Have politicians also targeted the Fed with rounds of institutional hardball? And with what consequence?   

Sarah Binder: The Fed has not escaped aggressive hardball tactics in Washington. True, the Fed is more insulated from normal politics than most independent agencies: Its budget does not depend on appropriations from Congress; members of the Board of Governors serve 14-year terms (far longer than most Senate-confirmed appointees, save federal judges); and the president cannot remove Board members just because he disagrees with their policy decisions. But as Mark Spindel and I argue in The Myth of Independence, the Fed is a product of and operates within the political system. And that means the Fed’s capacity and power to take unpopular (but necessary) policy steps is contingent on maintaining broad political and public support – lest lawmakers punish the Fed by clipping its authority or giving it additional responsibilities.

Over the past decade, central bankers have repeatedly found themselves in political cross-hairs. Polarized parties, populist pressures, financial and pandemic crises, and subpar productivity – these forces have made the Fed and monetary policy especially salient to lawmakers and the president. The most obvious example of norm bending in this domain was former President Trump’s vocal campaign attacking Fed chair Jay Powell for the Fed’s stance on interest rates. Even when the Fed lowered already-low interest rates, Trump continued the attack, pushing the Fed to lower rates below zero. Trump also threatened to fire Powell, questioning whether Powell or Chinese President Xi Jinping was the bigger “enemy of the people.”

True, presidents have often pressured the Federal Reserve to keep interest rates low to juice the economy. But Trump is the first since President Lyndon B. Johnson in the mid-1960s to run an aggressive, year-long campaign to demonize his hand-selected central banker. Past presidents have pushed their Fed chairs when the economy was in the dumps, facing high inflation, unemployment or both. But Trump attacked the Fed when unemployment was near an all-time low and inflation below the Fed’s 2 percent target.

Trump’s actions broke a “hands off the Fed” norm that presidents have observed for the past quarter-century. The Fed seemed to weather Trump’s attacks in part because Republicans on Capitol Hill generally refrained from amplifying the president’s tweets. With the economy in relatively good shape (before the pandemic), lawmakers saw little electoral payoff to jumping on Trump’s anti-Fed bandwagon.

Still, Trump’s attacks raised questions about the Fed’s ability to withstand political pressure in making monetary policy – especially after the Fed stopped raising rates early in 2019 at the height of the president’s tweet attacks. Indeed, some thought the Fed continued to raise rates late in 2018 just to demonstrate that they wouldn’t be cowed by Trump’s criticisms. Regardless of whether the Fed’s hawkishness was a reaction to Trump’s pressures, the president’s norm breaking put the Fed’s monetary policy credibility at risk. Markets, businesses, and the public count on the Fed doing what it says it is going to do: Incessant political attacks raise the possibility that the Fed could waffle on its commitments.


JD: Why does it seem that norm bending is on the rise – both within Congress and the White House?

SB: Remarkable changes in our two major parties over the past several decades have led us to this moment of repeated rounds of hardball. These changes have increased the payoffs for securing short-term policy or political gains at the cost of long-term institutional stability. Securing such gains seems to require partisans to be willing “to play for keeps in a special kind of way.”

Several changes are paramount. Most importantly, over the past several decades the parties have sorted ideologically. Liberals have largely migrated into the Democratic party, conservatives to the Republican party. That polarization of ideologues into competing partisan camps limits the emergence of cross-party coalitions, and increases the likelihood of legislative stalemate. Our electoral system has also become far more competitive. Unified party control happens infrequently and tends not to last very long. At the same time, many argue that the Republican party has evolved from its conservative roots into an “insurgent outlier,” less interested in governing than it once was. Add in shrinking congressional majorities, declining presidential margins, and recent presidents who lost the popular vote: Pressure on these slim, tenuous, and highly partisan majorities to secure their top goals is far greater under this new party system than it was in the recent past. And those pressures encourage parties to play increasingly aggressive rounds of institutional hardball to get their way, even as such moves erode support for the rules of the game.

To be sure, these are not monolithic parties: Both Democrats and Republicans endure significant internal cleavages, particularly so within the GOP. But on those aspects of the agenda on which partisans agree, the pressure to bend rules and break norms is intense. We see that most clearly in the rounds of hardball that take aim at empowering simple majorities to select judges and justices for lifetime appointments on the federal bench. Think about the spate of relevant changes secured by norm and rule bending: A ban on nomination filibusters (2013), refusal to consider a Supreme Court nomination (2016), a ban on Supreme Court nomination filibusters (2017), weakening of the blue slip (2017), curtailing of “post-cloture” nomination debate (2019), and confirmation of a SCOTUS nominee days before a contested presidential election (2020). This march towards majority rule in the Senate is remarkable. Both parties have been willing to play for keeps in the short-term, even knowing that the other party will benefit when they return to power. The makeup of the federal courts is now a unifying force within both parties. No wonder the parties are willing to pay longer term costs for the immediate gains accrued through hardball.

Will the march to majority rule in the Senate similarly kill the legislative filibuster? Certainly the pressure is mounting on Senate Democrats to require only a simple (rather than super) majority to cut off debate on measures and motions before the Senate. That pressure is especially acute because the Democrats’ slimmest of majorities in the House and Senate– coupled with President Biden’s robust agenda– leave them vulnerable to obstruction by a GOP minority eager to regain control. Not all Democrats are yet on board with bending the rules to abolish the legislative filibuster. But the pressure to play hardball will only climb if and when Republicans act in concert to frustrate Democrats’ policy and political designs.

For more from Sarah Binder, watch the Kluge Center’s recent event with her and other experts on the role of banks and the Federal Reserve in restarting the economy after the pandemic.

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