Over the coming decade, the United States is projected to produce $288 trillion worth of goods and services. In that same time period, our country is also poised to:
• invest an infinitesimal fraction of our national resources into mitigating climate change, despite the catastrophic economic, ecological, public health, and national security implications of unchecked global warming.
Joe Biden thinks we should devote about 1.2 percent of our national income — about $3.5 trillion — to solving these problems. That small sum wouldn’t be sufficient to plug all of the holes in America’s safety net, nor to invest nearly as much in green technology as prudence warrants. But it would be enough to finance a wide range of public goods.
Alas, a few conservative Democrats think that fighting climate change, caring for the elderly, reducing childcare costs, expanding access to health insurance, providing a child allowance to new parents, increasing housing affordability, and investing in public education aren’t very important objectives. Or at least, they believe that those aims are of such limited importance, it would be outrageous to dedicate $3.5 trillion to them.
The Democrats have a single-vote majority in the Senate, and can’t afford more than three defections in the House. So Biden and his progressive allies have been forced to appease their party’s recalcitrant right-wingers. Now, the progressive position is that we should spend 0.8 percent of GDP on mitigating our nation’s various crises, while the “moderate” view is that we should spend 0.52 percent — at most — on such trifling matters.
Put differently, Biden’s initial, $3.5 trillion Build Back Better agenda now lies outside the bounds of political possibility. As a result, the president and his allies must scale back their ambitions. According to Politico, the final version of Biden’s bill is now expected to include between $1.9 trillion and $2.3 trillion in new spending.
There are multiple ways to fit a $3.5 trillion peg into a $2.3 trillion hole. One would be to retain almost all of Biden’s current policy initiatives, but in smaller and/or more temporary forms. Instead of giving dental benefits to all Medicare beneficiaries, you could restrict such benefits to seniors who earn less than $39,000. Instead of giving a child allowance to 88 percent of U.S. parents, you could give it to the minority of parents who earn less than $50,000 a year.
Meanwhile, you could play games with the budget window: The Congressional Budget Office scores the fiscal cost of legislation based on its budgetary impacts over a decade. So you could set universal pre-kindergarten, child-care subsidies, and an expansion of the Affordable Care Act to expire in 2025, and hope that a future Congress would find it politically impossible to let those programs die. Or else you could delay the implementation of expanded Medicare benefits until 2028. Even in its $3.5 trillion form, Biden’s plan included many of these sorts of budget gimmicks. You could therefore produce a bargain-basement version of Build Back Better by turning the means tests and phase-outs up to 11.
Alternatively, Biden & Co. could nix the means tests, and just implement the president’s full agenda for a very limited period of time: Give Americans a child allowance, long-term care benefits, paid leave — the whole works — for just three years. Then run for reelection in 2024 as the party that opposes making virtually every American family poorer by allowing automatic safety-net cuts to take effect. This is the approach counseled by Carlos Mucha, an economics blogger with a knack for generating “so crazy, it just might work” policy proposals. A variety of Democratic economists — from the moderate Larry Summers to progressive Dean Baker — have endorsed a less radical version of this gambit.
A third option would be to enact a small number of expansive, permanent reforms. Instead of doing many things in an austere and/or temporary way, do a few things in an unfettered, durable one. For example, you could implement Biden’s climate agenda in its entirety, make his monthly child allowance permanent, establish a paid-leave program, and invest any remaining funds into affordable housing. This approach would condemn many vital programs to the congressional wastebasket. But it would also all but guarantee Biden a proud and lasting legacy: The child allowance would keep millions of U.S. kids out of poverty every year in perpetuity, climate investment would expedite the green transition, and paid leave would permanently ease the burdens of caregiving and illness for the American people.
None of these options are great. As indicated above, I think the budget constraints that Joe Manchin, Kyrsten Sinema, and other conservative Democrats have placed on Biden’s agenda are mindless and cruel. The United States is the wealthiest country in human history. We can readily afford a Western European welfare state, let alone the pale imitation of one that Biden has proposed. Nevertheless, the Democratic leadership has little leverage over its moderate holdouts. There is no mass, popular mobilization for Build Back Better in Arizona or West Virginia. And even if there were, Sinema and Manchin won’t face voters again until 2024. So the cost of Biden’s agenda needs to be cut somehow.
I think enacting a small number of expansive, permanent programs is the least-bad way to do so.
The first option — enacting a wide variety of means-tested, underfunded and/or temporary programs — seems unwise both politically and substantively. Heavy means-testing will increase the administrative costs of programs while creating barriers to uptake among the most vulnerable. Delaying the onset of programs may help pacify industry opposition (for example, if you delay Medicare dental benefits until 2028, the dentist lobby might not fight you too hard, since it knows there will be future opportunities to prevent the policy from taking effect). But such an approach also nullifies any political benefit your party might reap from addressing the public’s needs.
The second option — implementing the entire Biden agenda for three years — has more appeal. Voters have a well-documented status quo bias. And this makes it much easier for conservatives to block expansions of the welfare state than to repeal existing benefits. Thus, if you get all of Biden’s initiatives up and running as temporary programs, it’s plausible that they would all become permanent ones by mid-decade. Further, erecting an enormous benefits cliff at the end of 2024 might be the only way to put bread-and-butter issues at the center of America’s next presidential election. The media, both conservative and mainstream, tends to be more interested in culture-war controversies than the details of fiscal policy. And that usually works to the GOP’s advantage, since a disproportionate number of swing voters in battleground states lean left on social welfare but right on so-called “cultural” issues. If you engineer a situation in which virtually every U.S. voter stands to lose at least one social benefit that they had come to rely on in 2025, however, it may be impossible for Republicans to keep economic issues out of the limelight.
Unfortunately, there are two problems with this gambit. The first, and most fundamental, is that it does not actually satisfy the moderate holdouts’ demands. If Joe Manchin just wanted to gain symbolic distance from progressives and avoid associating himself with a large-sounding number, then a three-year, $1.5 trillion bill might be a unifying proposition. But Manchin is a genuine fiscal conservative who has a limited tolerance for both increasing the deficit and taxing the rich. He would oppose giving voters a three-year trial of the Biden agenda for the same reason that some progressives support the strategy. As Politico reported last week:
[I]n the West Virginia senator’s view, starting new programs that shut off a few years from now is akin to making them permanent; Congress will never be able to shut them off … “Once you start doing something, it becomes ingrained in it. We want to do it and do it right and finance it,” Manchin said. “I just don’t want our society to move to an entitlement society.”
Manchin is not alone in this view. Hawaii congressman Ed Case told Roll Call last month that he opposed “hiding the true cost of programs by making them temporary.”
If the Democratic leadership is going to ignore the moderates’ demands, they might as well press ahead with the full $3.5 trillion bill. If we assume that pacifying the moderates is imperative, then doing a pop-up version of Biden’s agenda is not a viable answer.
A second, smaller problem with the “do everything temporarily” strategy is that it’s quite high risk. Republicans are heavily favored to take the House in next year’s midterm elections. In 2020, the GOP had about a four-point advantage in the Electoral College (meaning that had Biden won the two-way popular vote by 3.9 percent or less, Trump would have won reelection). There is little sign that the major-party coalitions are changing substantially. Which means that the GOP is likely to have a big handicap in 2024. Setting up a giant welfare-benefits cliff might help Democrats win that election anyway. Or it might force the Republican ticket to embrace extending Biden’s programs. But it’s also very possible that neither of those things happen.
It’s very hard to repeal existing welfare programs. That is partly because of the electorate’s aforementioned status quo bias. But it’s also because passing any major laws in the U.S. is difficult, due to our veto-point-laden legislative system. If Democrats make Biden’s agenda temporary, however, Republicans won’t need to pass anything to erase his safety-net expansions. They’ll simply need to sit on their hands. It’s plausible that public pressure would force them to extend the programs. Yet Republicans have retained power in many red states where they’ve undermined popular social-welfare programs. Twelve GOP-controlled states still haven’t expanded Medicaid, in defiance of both majority opinion and the Chamber of Commerce’s counsel. It isn’t hard to imagine Republicans prioritizing the instant repeal of Biden’s entire legacy over appeasing the median voter.
Adopting that priority would disadvantage the GOP in the 2024 election. But all kinds of unpredictable, exogenous events can tip elections in our polarized polity. Right now, breakdowns in global supply chains are threatening to massively increase retail prices next year. If that happens, congressional Democrats will bear almost no responsibility; they didn’t set China’s energy policies or tell chip manufacturers to scale back production during the pandemic. Nevertheless, as the party in power, they will likely pay a political price for the crisis. Similar shocks could easily throw 2024 to the GOP.
Given this outlook, securing a small number of permanent policy changes seems like the most prudent cost of action. It’s true that Republicans could repeal a permanent version of the child allowance or universal pre-kindergarten or an enhanced Affordable Care Act. But the odds of that happening will be much lower if those policies are not set to self-destruct.
To be sure, this option has its own political difficulties. There is a reason why the $3.5 trillion version of Build Back Better included so many different programs: Every Democratic lawmaker has his or her own longtime policy hobbyhorse. And they all know that this could very well be their last bite at the apple. The political virtue of “do everything temporarily and/or half-assedly” is that it allows every lawmaker a partial “win.” For the party leadership, narrowing Biden’s agenda means killing a lot of their members’ personal darlings, and then pleading with them to vote for the package anyway.
But getting rank-and-file House Democrats to support a small number of robust, permanent reforms will surely be easier than persuading Manchin and Sinema to support legislation that directly contravenes their demands, if only because the latter are less invested in making Americans’ lives easier through public policy — and thus, more willing to let Biden’s agenda collapse.
Again, there is no good reason for the U.S. to spend less than 1.2 percent of GDP on fighting climate change and expanding the safety net over the next ten years. Given Manchin’s bad reasons, though, Democrats should aim to make a small number of big, durable improvements to America’s sorrowful status quo.