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US-POLITICS-BIDEN

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Demetrius Freeman

Six months after signing a massive economic stimulus package into law, President Biden on Thursday embarked on a fresh push for trillions of dollars in additional spending, attempting to pivot from an emergency posture to advancing a long-term liberal vision of government.

Speaking from the East Room of the White House, Biden heralded the return of jobs and other recent economic gains, which he attributed to a combination of federal relief efforts and the arrival of effective <a href="https://www.washingtonpost.com/coronavirus/" target="_blank" class="contextual_link">coronavirus</a> vaccines. But he stressed the need for even deeper, lasting policy changes to ease the hardships that many Americans have faced since long before the coronavirus took hold.

“This pandemic has been god-awful for so many reasons,” Biden said. “But it does present us with an opportunity. We can build an economy that gives working people a fair shot this time. We can restore some sanity and fairness to our tax code. We can make the investments that we know are long overdue in this nation.”

Democrats prepare for next phase of budget fight

Biden’s pitch marked an important political inflection point: Even as the pandemic simmers, the battered U.S. economy is still much healthier than it was at the start of his presidency, when millions more were out of work and businesses nationwide lay dormant. The improved tail winds have allowed Biden to pivot and pursue a dramatic expansion of the country’s social safety net, chiefly through a series of new spending proposals that would be paid for by tax hikes on wealthy Americans and profitable corporations.

“I think many of us recognize, the president recognizes, that we have ignored for a very, very long time the structural crises facing working-class families in this country,” said Sen. Bernie Sanders (I-Vt.) in an interview after the speech.

Biden’s wide-ranging address followed a day after House Democrats took a critical first step in delivering on his broader economic policy goals. Party lawmakers wrapped up a grueling, week-long process to translate the president’s earlier blueprints into a $3.5 trillion piece of legislation, a proposal they hope to advance as soon as this month.

But the effort also has exposed fissures in Biden’s own party, as Democrats’ liberal and moderate factions snipe at each other over the size and scope of their ambitions. Biden also has faced criticism from Republicans, who have assailed his tax-and-spending plans in recent days out of concern they could worsen the deficit and intensify inflation — charges he sought to rebut Thursday.

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“My plan benefits ordinary Americans, not those at the top, who don’t need the help,” Biden said. “It’s a historic middle-class tax cut, cutting taxes for over 50 million families. My Republican friends are making a different choice, though. They’d rather protect the tax breaks of those at the very top than give tax breaks to working families. It’s that simple.”

The economic vision Biden presented is vast: Encapsulated in the Build Back Better Act, which House Democrats finished assembling Wednesday, the proposal could amount to the largest burst of spending in U.S. history. The president and his congressional allies repeatedly have likened its significance to the Great Society and New Deal initiatives of generations past.

The legislation would vastly expand Medicare benefits, invest billions toward combating climate change and could grant citizenship to perhaps millions of immigrants. It would introduce a bevy of new or expanded federal safety-net programs, including guaranteed prekindergarten for young children, paid family and medical leave for their parents and a wide array of tax credits to help families that are struggling financially.

“This is about the kind of economy we want to have,” said Heidi Shierholz, the president of the Economic Policy Institute and the former chief economist at the Labor Department. “This is about making sure health care, care work, education — the kinds of things that actually create decent lives for people in this country — that we have those things in place.”

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To pay for the package, Democrats have proposed tax hikes targeting high-income earners, who would see their rates jump to 39.6 percent from the existing 37 percent. With the backing of Biden, lawmakers further have endorsed raising taxes on large, profitable corporations to 26.5 percent from the current 21 percent. Other tax increases included in the package touch offshore profits and investors.

Biden trained much of his attention on those potential increases during his speech Thursday, framing them as a matter of fairness. Even though the exact size of the tax hikes is smaller than the president initially recommended, their inclusion fulfilled a major pledge to unwind the rate cuts enacted under  President Donald Trump — all the while keeping a commitment to spare those making under $400,000 from having to pay more.

“What the president is driving home, and it’s so important, is that America has two tax codes. One that is essentially optional for billionaires, and one that’s mandatory for working people,” said Sen. Ron Wyden (D-Ore.), chairman of the tax-focused Senate Finance Committee. “What is important is to be on offense with respect to tax fairness.”

Republicans have pilloried the Biden administration for taking this approach, arguing the tax cuts produced a productive economy before the coronavirus pandemic. Rep. Kevin Brady, the top GOP lawmaker on the House Ways and Means Committee, said earlier this week that Democrats are “wasting so much to kill so many American jobs,” all the while worsening inflation and “hook[ing] a new generation of the poor on government dependency.”

But Biden rebuffed those charges Thursday, stressing the revenue his tax policies could raise “makes it possible to invest in America, to invest in the American people.”

Biden’s speech capped off a week in which he took his sales pitch for some of those investments nationwide. He paid a visit to the fire-ravaged West Coast starting Monday, for example, part of a broader effort to make the case for robust spending to combat the deadly and devastating effects of climate change.

In doing so, the president’s focus marked a steady shift from the emergency spending measures that defined the early days of his presidency — a change that corresponds with recent improvements in the economy.

The unemployment rate reached 5.2 percent last month, a far cry from a pandemic high of 14.8 percent in April 2020. With the aid of vaccines, businesses nationwide have reopened and students have started returning to classrooms, even though the highly contagious delta variant continues to overwhelm hospitals, particularly in the U.S. South. Retail sales also improved last month, an uptick that caught economists by surprise, as Americans continued to spend more online and in stores.

Mahlia Posey

Democrats have credited many of the improvements to the roughly $1.9 trillion American Rescue Plan that Biden signed into law in March, a sprawling package that included aid to Americans who were unemployed, at risk of losing their homes or otherwise struggling to pay their bills. Even though a few key programs since then have expired — prematurely, in the eyes of some Democrats — Biden on Thursday heralded the package for bringing the economy back from the brink.

“Our economy is growing at the fastest rate we’ve seen in nearly 40 years. Our recovery is unique in the world. We’re the only developed country in the world whose economy is now bigger than it was before the pandemic,” Biden said.

But the $1.9 trillion rescue plan — part of a roughly $6 trillion burst of emergency relief efforts since the arrival of the coronavirus — also has fueled fresh fears about expanding deficits and worsening inflation. Those criticisms have loomed large this week, as even some Democrats have started to question more forcefully the wisdom of adopting a package as large $3.5 trillion.

The most forceful objections have come from centrists including Sens. Joe Manchin III (D-W.Va.) and Kyrsten Sinema (D-Ariz.), who recently have angled to dial back the bill to a smaller, still-undetermined amount. Their comments prompted Biden to meet with both of them Tuesday, just days after Manchin called on Democrats to “pause” the process to think about the implications of their spending.

The centrists’ concerns have presented major political challenges for Biden’s longer-term economic agenda. To adopt the spending he supports, Democrats plan to rely on a legislative tactic known as reconciliation. The move allows them to sidestep a guaranteed Republican filibuster — yet only if Democrats can stay united.

With moderates looking to scale back the $3.5 trillion reconciliation bill, Democrats’ more liberal-leaning members have held firm. Sanders, an independent who caucuses with Democrats and leads the chamber’s top budget panel,<b> </b>stressed Thursday that the price tag already amounts to a compromise from the more robust, roughly $6 trillion package he and other lawmakers initially pursued.

“I hear from senators every single day, ‘Bernie, why aren’t we putting more money into education? Why aren’t we putting more money into climate change? Why aren’t we putting more money into child care?’ … To go lower than that would be to really sell out the working families of this country,” he said.

Gerald R. Ford Journalism Prize for Distinguished Reporting on the Presidency, 2022

Northwestern University, BS in Journalism 

University of Oxford, MSc in Comparative Social Policy

Tyler Pager is a White House reporter at The Washington Post. He joined the paper in 2021 after covering the White House at Politico and the 2020 presidential campaign at Bloomberg News. He won the Gerald R. Ford Journalism Prize for Distinguished Reporting on the Presidency in 2022. 

Tyler Pager

American University, BA in Journalism

Tony Romm is the economic policy and accountability reporter at The Washington Post. 


Tony Romm

washpost

Biden makes populist economic agenda pitch

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US President Joe Biden economy 

The Washington Post

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