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We’re now about 80 days into President Biden’s administration, and so far the new government has already enacted a $1.9 trillion emergency funding package, the American Rescue Plan, designed to help the country recover from the yearlong COVID recession.
Now the administration is gearing up to push a major infrastructure bill through Congress. Coming on the heels of the Rescue Plan, the new “American Jobs Plan” accounts for $2.3 trillion in spending, one of the largest spending packages in recent years, if not in history.
The proposal contains a broad interpretation of what’s considered infrastructure. Some measures are a common-sense reflection of the reality that a modern technological nation’s infrastructure goes well beyond highways. Included in the package are plans to fund many things that have fallen short in the past year, such as clean drinking water, universal broadband, electrical infrastructure, affordable and sustainable housing, and public schools, early-learning centers, and community colleges.
Other elements of the jobs plan extend to research and development funding, workforce development, and support for manufacturing. And then there’s $400 billion for the “caretaking economy”: home and community-based care for elderly and disabled people. The economy of care is an oft-overlooked part of our economy, where much of the work is traditionally performed by women, especially women of color, and is often unpaid. Biden’s proposal isn’t comprehensive in covering that sector, but providing paid support services for senior and disabled people are obvious places where the U.S. economic system comes up short.
The American Jobs Plan overall is a marked departure from an economic policy that, for the past 40 years, has mostly concerned itself with manipulating the tax code, largely by cutting those taxes for the wealthy and corporations. This happened under both Republican and Democratic administrations, with the differences being mostly about where to draw the line between the haves and the have-nots.
In addition to reinvesting in large sectors of the economy, Biden’s jobs plan also calls for a corporate tax rate of 28% (up from 21% now, but not quite back up to the 35% level it was before Trump’s 2017 tax cut), a global minimum tax on U.S. multinationals of 21%, and the elimination of loopholes that allow companies to use foreign tax havens as their official residences.
This also dovetails with Biden’s distinctly more labor-friendly stance, where he’s introduced legislation to guarantee workers’ right to unionize, stated support for the unsuccessful effort to unionize an Amazon warehouse in Alabama, and is pushing in the latest jobs package to revitalize U.S. manufacturing, which has lost nearly 600,000 factory jobs since the COVID-19 pandemic began.
Naturally, Congressional Republicans have unified in opposition, settling on a definition of infrastructure that only involves pouring concrete. But Republicans also have made it clear they were going to oppose anything the Biden administration does—just as the former Senate Majority Leader Mitch McConnell once said his No. 1 agenda was to ensure Barack Obama would be a one-term president.
With a razor-thin Democratic majority in the Senate, Biden is working through the process of budget reconciliation to avoid the inevitable Republican filibuster. That means appeasing the moderate wing of the party, especially U.S. Senator Joe Manchin of West Virginia, who along with Arizona’s Kyrsten Sinema, got a national $15-an-hour minimum wage removed from the stimulus bill this year.
But setting that aside, what gives some commentators cover to compare Biden to Franklin D. Roosevelt is the redefinition of the role of government in the economy. Government is no longer, in the words of Ronald Reagan, the problem. Right now, it’s supplying solutions to problems the private market cannot fix on its own.
We haven’t had a more thorough repudiation of deregulatory economics since Reagan first waltzed onto the national scene more than 40 years ago. And while Biden hasn’t explicitly said he’s tossing out the anti-government gospel, that’s exactly what’s happening.
The timing couldn’t be more critical. Not only does the U.S. face the greatest economic challenge since the Great Depression, we’ve now had 40 years of evidence that cutting taxes on the wealthy does not, in fact, lead to increased wealth and well-being for everyone. That rising tide only lifted the boats of those who could afford one in the first place.
No wonder the Republicans are opposed to Biden’s plan: The 2016 presidential election marked the party’s final abandonment of its previous positions on deficits, national security, and creating a strong American economy, the last-standing pillar of their political foundation is now crumbling to dust. All that’s left is a fetid stew of White grievance, corruption, and cultlike devotion to Donald Trump. The GOP didn’t even bother with a party platform in the 2020 election.
That’s not a recipe for future electoral success (which also explains the rash of state laws intended to suppress the votes of likely Democratic voters). And the nation is very much in support of this new government spending plans. One recent poll from Data For Progress and Invest in America showed 73% of Americans supported the jobs plan, including 57% of self-identified Republicans. Another poll, from Reuters/Ipsos, found broad support for individual elements of the plan, but more partisan separation on the combined package as presented by President Biden.
None of this is unprecedented. Biden isn’t quite Roosevelt. Despite the Trump administration’s reluctance to be seen intervening in the economy, Trump did invoke the Defense Production Act—to get General Motors to manufacture ventilators and 3M to make more N95 respirator masks. He also used the act to require meat processing plants remain open, despite a lack of protective measures against the coronavirus in the early days of the pandemic, when at least 20 plants closed because of outbreaks among the workforce.
But the DPA gets invoked more often than most of us realize: It gets used regularly by the U.S. Department of Defense to ensure its contracts with private businesses take priority over other contracts. The law was used in this way approximately 300,000 times a year during the Trump administration. It’s been reauthorized 53 times since 1950, when President Harry Truman first signed it into law. FEMA also uses the law to respond to emergencies, to ensure bottled water and food can be delivered to disaster zones.
All this shows that, despite the free-market purists’ naysaying, government intervention in the economy is commonplace, and often accounts for a lot of results we take for granted. Conservatives love to name-check Solyndra, the solar company that in 2009 received a $535 million federal loan guarantee (which the U.S. Department of Energy later said was issued based on possibly false and misleading information provided by the company in its application) before filing for bankruptcy two years later.
But for every Solyndra, there’s a Tesla Motors, which also received a $465 million federal loan in early 2010, under the same program that awarded the Solyndra loan. In 2013, Tesla paid back the entire loan, three years earlier than required to do so.
The American Jobs Plan is just one more in a long line of government programs designed to steer the U.S. economic engine in its most beneficial direction. The government has always “picked winners and losers,” as critics have often charged. The difference now is that Biden is deciding that it’s not just the rich who should be winners.
Chris Winters is a senior editor at YES!, where he specializes in covering democracy and the economy. Chris has been a journalist for more than 20 years, writing for newspapers and magazines in the Seattle area. He’s covered everything from city council meetings to natural disasters, local to national news, and won numerous awards for his work. He is based in Seattle, and speaks English and Hungarian.