April 21, 2021

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Biden’s Multitrillion-Dollar Gamble – WSJ

3 min read

The Covid relief bill President Biden signed March 11 weighed in at almost $2 trillion. This week’s infrastructure bill also comes in at almost $2 trillion, and in a few weeks there will be a companion bill of the same magnitude. It’s all big and bold, and you can see it making a million possible messes, from the usual (How much ideological mischief is hidden in there?) to the existential (Don’t debt and deficits matter anymore? Isn’t inflation something to worry about?). But yes, the White House is in a New Deal state of mind, they’re rocking the Casbah, they feel they’ve got the wind at their back, and at this point they’re more or less right. But this is a whole lot of spending and taxing in the first hundred days. It’s a big political gamble.

The Infrastructure bill, according to the White House, will include $621 billion for infrastructure, $400 billion to increase care for the aging and disabled, $580 billion to boost manufacturing, and $300 billion for affordable housing. The public won’t dislike those goals. There’s a lot more shoved in there too. The plan to pay for it is to raise the tax on corporate profits (from 21% to 28%) and corporate foreign earnings. There will be individual tax increases also, to be announced in the coming bill, but the president repeated Wednesday what he’d said on the campaign trail: “I start with one rule: No one—I’ll say it again—no one making under $400,000 will see their federal taxes go up, period.” It’s unclear if that is individual or household income.

Since roughly 2000 we’ve been used to the federal government spending a lot and not worrying overmuch about it. But this White House’s approach is different. It’s not furtive and shaded, it’s formal and declared: Big money is about to be pumped into the economy and big money is about to be extracted, that’s how we roll. If it works it’s going to change a lot of assumptions in American politics. If it doesn’t, it will be a cautionary tale. That makes it a big gamble. In a small, tactical way you can imagine they’re thinking a big economic story will take the heat off the border crisis. But that wouldn’t be all they’re thinking.

There wasn’t much pushback against Covid relief—it was big and sloppy but we’re in a pandemic, let it go. Nobody will mind infrastructure either. We’ve been talking about our falling bridges, corroded tunnels and general civic ugliness for 25 years. If this bill actually turns out to be about building roads and tunnels and railways and undergirding bridges, people will like it. I will like it. If people can see it happening—if on the two or three days a week they commute into the city, big crews of human beings in safety vests and hardhats are out there building things—they’ll like it a lot.

Some part of my mind thinks it will be received as the first gesture of national self-respect in a long time, a visual counter to wokeness and critical race theory. We may hate our history, our ugly beginnings and our hypocrisy but apparently we still have enough confidence to build a soaring bridge we can use, and to make the highways look better. As if we still have some self-regard. But if the whole scheme begins to look like some dumb boondoggle featuring photo-ops with Democratic donors who own companies that make solar panels, people won’t like it.

2021-04-01 18:23:00

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