Why did Biden start a historic spending glory with barely a whisper of bipartisan support?
Well, the Democrats have persuaded themselves over the past few years that there is basically not too much money.
There is consensus within the party that Barack Obama has become “too small” and that an economic stimulus package under $ 1 trillion will not be enough to close the post-financial crisis demand gap.
Plus, Biden can actually spend – he can pass his stimulus and facilitation laws under what is known as the Senate’s reconciliation rules, and only needs 50 votes instead of the 60 votes it takes to break a filibuster.
After all, every Democratic president is drawn to the heroic appeal of the FDR and wants to measure himself against the New Deal.
Biden recently had a meeting with historians at the White House where there was a lot of discussion about the FDR. One of the participants, historian Michael Beschloss, told Axios that FDR or LBJ might be the most appropriate analogue of how Biden “changes the country in important ways in a short period of time.”
There is no doubt that any Democratic president would envy the sheer amount of dollars that Biden is shoveling out the door.
In fiscal 2019, the federal government, which didn’t tighten its belt exactly, spent $ 4.4 trillion.
Biden is well on the way to aligning this with his first two major legislative initiatives – the $ 1.9 trillion Covid Relief Bill he signed a few weeks ago and – provided he receives it without rolling it back – its newly approved $ 2.3 trillion infrastructure bill.
Another package is reportedly on the way, more focused on health and education, with perhaps another $ 2 trillion.
The Biden team almost feels like they’re working backwards – from a big, eye-catching price tag to the initiatives that can be taken to reach that top-line headline-grabbing number.
Schools have tens of millions of dollars not spent on previous auxiliary bills, and here comes another $ 100 billion to upgrade school buildings on infrastructure bills.
The states were wasted with $ 350 billion in the Covid relief bill, though many of them did not lose any revenue during the pandemic. Why can’t these dollars be spent on infrastructure?
The Covid Aid Bill ultimately didn’t focus primarily on the Covid Aid, and the Infrastructure Bill also goes in all directions.
It’s about infrastructure, drinking water, broadband, home retrofitting, manufacturing, long-term care, electric car, union law – and a few other things.
If being incredibly diffuse is ambitious, this bill is undeniably qualified. The question, however, is, if all of the money is spent, will anyone point out a transformative change in the country due to the legislation. Or whether, like the Obama incentive, it will be utterly unforgettable to scatter money across the landscape without leaving a trace.
The need for infrastructure expenditure that goes beyond the expenditure already spent by the federal, state and local governments is certainly oversold.
Infrastructure is obviously important, and depending on the details, building or repairing it can be a good investment. But huge infrastructure bills in Washington are not well suited to sophisticated, unpolitical investment decisions, and the endlessly repeated stereotype about our “crumbling” infrastructure doesn’t hold up.
A paper recently published for the National Bureau of Economic Research states: “Over the past generation, the state of the motorway network has steadily improved, its extent has increased slightly, and traffic has roughly doubled. Over the same period of time, the condition of the bridges remained roughly the same, the number of bridges slowly increased and bridge traffic increased slightly. The population of public buses is younger than a generation ago and around 30% larger, although the number of drivers has remained constant. “
Shooting money out of a bazooka is not what the infrastructure of the American state demands for granted. But when the only tool you have is huge reconciliation spending bills, it all looks like a crisis desperate for more waste.
The bills are also a substitute for the passing of significant non-issuing policy changes that appear to be beyond Biden’s power. In contrast to the FDR, Biden has narrow and weak congressional majorities. He gets no HR1, no gun controls, no higher minimum wage or no immigration reform, and maybe he couldn’t if the Senate Democrats eliminated the filibuster.
What he can do, what FDR and LBJ never could, is to reach for the word “trillion” as much as possible.