Look Who Thinks He's FDR ...

#37-- Biden spends a lot in old ways

Whole lotta hype going on regarding President Biden's recent address to Congress and the new legislative packages (The American Jobs Plan and the American Families Plan) he’s selling.  We’re told this was:

—"the most ambitious ideological statement made by any Democratic president in decades," in support of a "breathtakingly large agenda." (John Harris, Politico)

— a “stunningly sweeping spending agenda" amounting to a "big government revival." (Howard Fineman, "Long Underestimated, Biden Comes Into His Own," Real Clear Politics).

—"a fundamental reorientation of the role of government not seen since the days of Lyndon B. Johnson's Great Society and Roosevelt's New Deal … a breathtaking scope of change" from a 78-year old who “positioned himself as a transformational president." (Peter Baker, New York Times)

Please! Let's not get carried away. Roosevelt established Social Security, passed the National Labor Relations Act, created the WPA jobs plan plus the cash aid program for “dependent children” that came to be known as "welfare,” LBJ passed the Civil Rights Act and started food stamps. Also Medicare.**

Biden, in contrast, isn’t even lowering the Medicare eligiblity age to 60 (despite proposing it during the campaign). Instead, he’s planning to spend $200 billion annually to shore up the Obamacare exchanges. Lowering the Medicare age would cover about 23 million extra people. Subsidizing Obamacare will save 9 million people an average of $50 per month. Shoring up Obamacare is not transformational. It’s a patch on the status quo. (There’s also no “public option” in Biden’s “stunningly sweeping” agenda.)

The pattern repeats throughout the $4 trillion of new spending Biden’s proposing (in addition to the $1.9 trillion in the Covid relief bill that already passed). He seems mainly to have taken existing, familiar Democratic programs and expanded them. So we get fully subsidized pre school and free community college (for two years). We get more school meals and summer meals and bigger child care subsidies, plus more “green jobs” — a big feature of President Obama’s 2009 stimulus, which was also supposed to be transformational.  Biden would ban “assault weapons” — an old chestnut idea that was actually tried from 1994 to 2004. (Opinions differ on its impact, but whether it helped or hurt it was not transformational.)

Programs that have big existing constituencies behind them-- early education (teachers’ unions) and community colleges (community colleges) — get funding.  Biden’s plan to increase Medicaid by $400 billion to cover more home health care services is a big deal for the Service Employees International Union. (This latter plan is moderately transformational, since it would shift payments to home care and away from nursing homes.)

New programs -- which almost by definition don't already have a built-in lobby -- have less of a chance in Biden’s “breathtaking” reorientation. A national “guaranteed jobs” plan would be an example of such a program. It’s part of the “green New Deal.” but its beneficiaries don’t exist yet and unions hate it. It doesn't have a chance.

What’s really ambitious about Biden's plans appears to be mainly that he’s proposing to do all his expansions at the same time, seemingly heedless of the threat of inflation (if, as widely expected, the tax hikes he proposes to pay for the plans don't get through).  But there's no one big new thing you'll be able to point to and say "Biden did that." For $6 trillion, I want a big new thing -- like a universal health care program to replace the current stratified kludgework of Medicaid/Obamacare/private insurance/Medicare. Instead, there’s now a danger that Biden is pissing away the funds a future Democratic president, with a bigger Congressional majority, might use to establish such a system.

P.S.: The biggest potential transformation included in Biden’s agenda is the refundable “child tax credit,” typically buried in the press’ laundry list of proposed expenditures, which would cost maybe $100 billion a year. The “refundable” part isn’t really about taxes at all — it would send direct government payments of $3,000 or $3,600 per child annually to families that don’t earn enough to pay taxes and qualify for the current credit. This replicates the no-strings-aid to non-working parents sent out by the old, despised Aid to Families with Dependent Children program — indeed, it exceeds the maximum AFDC welfare payment that existed in 21 states when President Clinton signed the law abolishing the program in 1996. Proponents of making the new Biden credit permanent say it would cover 27 million additional families and move 4.1 million children above the poverty line. Critics say it would subsidize a culture of non-work, much as the old welfare system did, except on a potentially much larger scale. You’d get what Matt Yglesias fears: new “whole communities where nobody is doing formal work,” kids growing up in those communities. Now that’s transformative! But not in a good way.

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**— Much of the current commentary contrasts President Obama’s pared-back stimulus spending with Biden’s big, bold plans. But even Obama passed Obamacare.

Twitter: @kausmickey