Biden's $1.9tn Covid relief bill marks an end to four decades of Reaganism | Analysis
Joe Biden reflected recently on the last time a Democratic administration had to rescue an economy left in tatters by a Republican president.“The economists told us we literally saved America from a depression,” Biden told the House Democratic Caucus last week. “But we didn’t adequately explain what we had done. Barack was so modest; he didn’t want to take, as he said, a ‘victory lap’. I kept saying, ‘Tell people what we did.’ He said, ‘We don’t have time. I’m not going to take a victory lap.’ And we paid a price for it, ironically, for that humility.”The 46th US president is often lauded for his humility but don’t expect him to repeat Obama’s mistake. Once his $1.9tn coronavirus relief bill is signed, he is set to take an extended victory lap by travelling the country to promote it.Biden will have short and long sales pitches. First, that help is on the way after the hellish year of a pandemic that has killed more than 528,000 people in the US and put many millions out of work.The stimulus, among the biggest in history, includes $400bn to fund $1,400 direct payments to most Americans (unlike Donald Trump, Biden’s signature will not appear on the cheques), $350bn in aid to state and local governments and increased funding for vaccine distribution.Politically, it is an open goal. The risks of inaction were immense; the risks of action are modest. Opinion polls show that three in four Americans support the stimulus, making congressional Republicans’ implacable opposition all the more jarring. But given that voters tend to have short memories – academic research and midterm election results suggest that Obama got little credit for the 2009 rescue – Biden is wise to press home his advantage.Second, he will also be on a mission to restore faith in government. Confidence in it “has been plummeting since the late 60s to what it is now”, Biden noted in his remarks last week. His legislation, called the American Rescue Plan, can correct that with the biggest expansion of the welfare state in decades.Advocates say it will cut the number of Americans living in poverty by a third and reduce child poverty by nearly half. It contains, at $31bn, the biggest federal investment in Native American programmes in history. It also delivers the most important legislation for Black farmers in half a century, allocating $5bn through debt relief, grants, education and training.Jim McGovern, the Democratic congressman who chairs the House rules committee, has said: “This bill attacks inequality and poverty in ways we haven’t seen in a generation.”The White House has called it “the most progressive piece of legislation in history”. Biden knows better than anyone what that means.When he was born, in 1942, the president was Franklin Roosevelt, architect of the New Deal, an epic set of programmes, public work projects and financial reforms to provide relief from the Great Depression. When Biden was a student at the University of Delaware, Lyndon Johnson embarked on his project of the “Great Society”, flexing the muscles of government for poverty alleviation, civil rights and environmental protections.But then came the monumental pushback. As a senator, Biden witnessed the Watergate scandal tarnish the political class as Richard Nixon became the first president to resign. Then came Ronald Reagan and his famous quip: “The nine most terrifying words in the English language are: I’m from the government and I’m here to help.”Reagan oversaw a major tax overhaul in 1986, resulting in cavernous inequality and a massive budget deficit. He described Johnson’s “Great Society” as a fundamental wrong turn and set about dismantling it. Reagan was so successful in making the political weather that Biden himself bought into the ideology.In 1988 he wrote in a newspaper column: “We are all too familiar with the stories of welfare mothers driving luxury cars and leading lifestyles that mirror the rich and famous. Whether they are exaggerated or not, these stories underlie a broad social concern that the welfare system has broken down – that it only parcels out welfare checks and does nothing to help the poor find productive jobs.”This orthodoxy held and dominated the political centre ground. In 2017, Trump followed Reagan’s lead with a $1.5tn bill that slashed taxes for corporations and the wealthy, including himself and his allies. That was his first big legislative win; Biden’s could hardly be more of a polar opposite.The American Rescue Plan is not without disappointments for progressives, notably the lack of a $15-per-hour minimum wage, a harbinger of how difficult an evenly divided Senate will be for Biden to handle. All the more reason to enjoy his victory lap and celebrate that four decades of Reaganism and “trickle down” economics are at an end. More
