Game of votes — why budget reconciliation isn’t the answer Democrats need
Democracy took a big hit last week when Senators Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) both reinforced their previous statements against filibuster reform. Such reform is essential for our nation’s ability to govern representatively. Game theory can explain how Senate Democrats ended up here and why recent legislative wins may actually cause larger-scale losses.
The U.S. has a long history of voter suppression and gerrymandering. However, better technology allows politicians to bypass voters more precisely than ever before. After the 2012 redistricting, House Republicans won 54 percent of the seats while receiving only 45 percent of the popular votes. The problem can be even worse in some states. For example, in 2018, Democratic State Assembly candidates in Wisconsin received 53 percent of the votes but won only 36 percent of the seats. This year’s Congressional redistricting may look more like Wisconsin’s imbalance as gerrymandering becomes ever more precise.
This weakening of democracy has not gone unnoticed. In early March, the House passed the For the People Act, which limits gerrymandering. However, the Senate version, S1, will not pass as long as the filibuster, requiring 60 votes to pass a bill, remains in place. Without S1, Republicans can use extreme gerrymandering to take control of the House even if only a small minority of voters support them. Democrats cannot respond in-kind because many Democratic states already have nonpartisan redistricting commissions.
President Biden and Senator Charles Schumer, (D-N.Y.) have most recently focused on passing popular economic legislation such as the American Rescue Plan (COVID checks) and the American Jobs Plan (infrastructure). To ensure that these and other bills pass, Schumer and the Senate Parliamentarian recently found a way to bypass Republican opposition: invoking budget reconciliation. Budget reconciliation enables budget-related bills to pass with a simple majority vote, instead of a 60-vote threshold. Before this ruling, it seemed that reconciliation could only be used once per fiscal year, limiting the Democrats to one more bill in this legislative session because they already utilized reconciliation to pass the American Rescue Package. Now, Democrats can use reconciliation to pass Biden’s infrastructure plan and other budget-related legislation.
This is where game theory comes in. Given the 73 percent support for the infrastructure plan, voters may consider this new ruling a good thing. However, game theory teaches us that more flexibility is often bad. The textbook case considers an army that has been cornered by an enemy, where their only potential escape is through a wooden bridge across a ravine behind them. Counterintuitively, a shrewd general may choose to burn that bridge before their army crosses it. Without the bridge, his soldiers will fight to the death since there is no way out. That, in turn, can prevent the opposing army from attacking in the first place, since they know the battle will be costly. In business contexts, we similarly see that companies might be better off not having the ability to precisely target customers with discounts, since if everyone can give price-sensitive customers discounts, all of the firms may end up competing their profits away.
Now imagine a world in which the Senate Democrats could not use budget reconciliation for the infrastructure plan. This plan will boost the economy and wages in states like West Virginia and Arizona. If the bill were blocked through a filibuster, Manchin and Sinema would have to answer for their opposition to filibuster reform to their voters. Having the option to pass these items by budget reconciliation takes the pressure off of these senators. It is no coincidence that both Manchin and Sinema renewed their opposition to filibuster reform right after the expansion of budget reconciliation was announced.
Ironically, Manchin and Sinema’s opposition to filibuster reform prevents what they say they want most: the parties working together. We have lost bipartisanship because most representatives are in highly partisan districts, so attracting moderate voters is less important than staving off a primary challenge. If S1 were passed, legislators would be in more representative districts and they would have an incentive to work across the aisle in order to gain support from moderates in their districts. The Senate might still be evenly divided, but with bipartisan bills coming from the House, pressure to pass them would increase.
S1 is the best hope for strengthening our struggling U.S. democracy and minimizing the hyper-partisanship in Washington. Unfortunately, using the budget reconciliation process for the infrastructure plan — which may look like a win in the short-term — will actually weaken our chances to elect representative governments and keep our politicians accountable.
Raphael Thomadsen is a professor of Marketing at the Olin Business School, Washington University in St. Louis, where much of his research focuses on applying game theory to business. Jillian Thomadsen has an MBA with a concentration in Finance and is an author.
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