Biden’s Big Swing

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S1: Before walking me through all the details of the massive jobs plan President Biden laid out last week, I asked Slate’s Jordan Weisman to do something a little different. I asked him to take me two decades in the future and tell me what the world around us could look like, assuming Biden’s entire list of goodies made it through Congress

S2: in 20 years. OK, let’s let’s close our eyes. And imagine. In 20 years from now, you are in your electric vehicle, which you don’t have to worry about charging because there will be charges all over the country. There will be, you know, nobody at any any gas station or rest stop. You’ll be able to charge your car and you are riding to work on a highway that is actually fixed. You don’t have to worry about traffic congestion so much because our highways have been fixed up and modernized and bridges have been repaired. So you don’t have orange cones everywhere holding up the morning commute. You do no longer have to worry about whether or not your kids are getting poisoned by your tap water because we’ve taken out and replaced all of the lead pipes, which is good.

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S1: OK, this this vision is making me realize what a hell scape we currently live in. Right. Some people have called Biden’s American jobs plan an infrastructure bill, and it does fund roads and bridges, the electrical grid and water pipes. But in a few weeks, the second half of this plan is going to be released, the American Families Plan. And together, the ideas inside these plans aim to redefine what infrastructure is. They’re looking to bolster human infrastructure along with everything else. There’s something else I noticed about Biden’s bills here. They use the word America a lot. You’ve got the American jobs plan in a few weeks, we’re going to have the American families plan. It’s a whole lot of America. Is that intentional?

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S2: Yeah, I assume so. I mean, like, why not just put America and everything that’s patriotic? The new nationalism? Part of the theory of Biden is that we can have a rich country where things are less crappy, that’s sort of rather than a rich country where a lot of stuff is crappy.

S1: You use this term Biden nomics. Do you feel like. Over the last few months, you’re getting a better idea of what Biden nomics is.

S2: Yeah, I think we’re starting to and I think a lot of ways it is an inversion of Reaganomics. It’s a he is sort of flipping the script on what was the prevailing economic ideology for 30, almost 40 years.

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S1: Today on the show, you’ve read about the president’s new infrastructure plan. We’ll talk about the way this plan embraces a new kind of American populism, one that could appeal to Democrats and Republicans. I’m Mary Harris. You’re listening to what next? Stick around. Let’s do some basics, because we’re talking about two bills here, the American jobs plan and the American families plan. When Joe Biden announced the American jobs plan, he said, I’m going to be back in a couple of weeks to talk about this other plan and really, really basically laid out that these are paired together. He sees them as is bound together, but we know a lot more about the jobs plan. So so let’s go over it a little bit. It’s it’s an infrastructure bill that’s very expansive about what infrastructure is. Right.

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S2: So the media has started calling this an infrastructure bill, and that’s because that’s the way it was discussed around Washington. But I actually don’t think that’s the most appropriate way to think about it. In a lot of ways, it’s more of an economic modernization bill, right? It’s a lot more expansive than just roads and bridges and, you know, car charging ports. It really is four key pillars. And if you count the way it’s financed, the tax side, maybe it has a fifth pillar. We can talk about those. One of those is just straight up infrastructure. The, you know, like we think about it, roads, bridges. You know, there’s a part of the bill that says we’re going to fix the 10 most economically important bridges in the country,

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S1: 621 billion dollars for roads and bridges.

S2: Yeah, well, it’s not six hundred and twenty dollars billion on just 10 bridges. Thankfully, we are also 10000 smaller bridges, but also fixing up highways, basic stuff like that, as well as, you know, improving, you know, retrofitting schools and, you know, taking out lead pipes, things along those lines. Another pillar of is decarbonisation. Right. It’s sort of the climate bill is being wrapped into this. It’s everything from, like you said, electric vehicles to to to this clean electricity standard that they’re somehow going to put in there. It’s a little bit unclear, but the idea is that we’re going to require more of our electricity come from carbon free and environmentally friendly sources. There is, you know, energy R&D. There’s all sorts of there are all sorts of goodies in there that have the climate folks extremely excited right now.

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S1: And all of this sounds like traditional infrastructure, maybe a little bit focused on climate change, but but pretty like meat and potatoes, infrastructure spending. But then it kind of goes in a different direction.

S2: Right? I mean, when you’re rebuilding the electric grid, that is that is infrastructure. Right. It’s absolutely essential to to, you know, decarbonising our power sources. But it’s also just meat and potatoes making work for for construction workers and it’s productive work. But then there is this other aspect of the bill. There’s you know, there’s a big chunk of it’s devoted to R&D spending and trying to kind of cultivate research and development, research and development, cultivating the industries of the future. There’s you know, there’s this idea where we’re going to create this sort of new technology directorate under the National Science Foundation and channel more money into into advanced manufacturing. We’re going to try and create a domestic battery industry, which has been kind of the great white whale for American policy makers who are interested in industrial policy for a while now and batteries.

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S1: So we don’t rely on fossil fuels as much.

S2: Well, also, so we don’t have to rely on batteries that are built abroad in China, for instance. The idea is that, you know, it’s not just. Decarbonizing or building the industries of tomorrow, but we’re building the industries of tomorrow and bringing them here to the US. There is an amount of economic nationalism here instead of using tariffs, though, like Donald Trump did. The idea is that you’re going to you know, you’re going to provide, you know, government incentives and funding and resources in order to build these industries up domestically. And that’s but one

S1: of the bigger line items is long term care for the elderly and disabled. And you read that and you think infrastructure is that structure. Do I need to rethink what infrastructure is?

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S2: Yeah. I mean, it’s it’s led to a lot of joking about how if you want to get a policy passed in Washington now, you just have to call it, you know, you have to call it infrastructure. You know, I mean, it’s a stretch to call that infrastructure. They call it care infrastructure. Right. But our human infrastructure. But I think there are a few ways to think about that part of the bill. Part of it is that the reality is that the United States is just getting older. There are going to be a lot of elderly people in the future and they’re going to need, you know, someone to take care of them. And we could just put them all in nursing homes. But that’s not really ideal. And allowing people to stay at home is in their own homes is in a lot of ways more humane. It might actually be more affordable. And it’s I think it’s something people would prefer. And so this is kind of Forward-Looking in that respect saying, OK, well, this is going to be a big part of the workforce and we should make sure that, you know, people A, can afford home care and B, that the people who are doing the care and caretakers are paid appropriately.

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S1: This plan got a two trillion dollar price tag. It would largely be paid for by tax hikes. Biden’s plan is to roll back some of the corporate tax breaks offered under the Trump administration.

S2: There are some more subtle and interesting things going on underneath the hood that I think might freak out some conservatives and sort of the Chamber of Commerce, which is already pushing back their ways. The ways we would treat international income under this tax plan are a very big deal. Gabe Zuckerman, the Berkeley economist who is known for his work on tax havens and inequality, is very excited about these changes. He’s always been an advocate for a kind of global minimum corporate tax, and it actually seems like some of the changes in this bill are meant to advance that agenda. And actually, Janet Yellen, the treasury secretary, has been kind of beginning to lobby her global, you know, her global peers or her global counterparts on this idea of of maybe trying to impose some sort of global minimum corporate tax rate.

S3: We’re working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom.

S1: Does this keep folks from hiding money?

S2: Essentially not so much hiding money, but it’s meant to prevent, you know, regular tax competition between countries and also, you know, kind of deal with tax havens.

S1: Folks are already looking down the line and saying, OK, if this plan made it through Congress, how would it do it? And it sounds like if this moves through, the likelihood is that this would need to be a party line vote. Again, folks are already talking about the Senate using reconciliation again, which they just did for the stimulus, which is a budget procedure that technically most people believe can only be done one time of year. But Democrats are lobbying that they can do it three times a year. I’m wondering what you make of all this.

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S2: Yeah, it’s going to be a beast. Passing this thing is not going to be easy, but either politically or procedurally. Right. Because any time, you know, spending money is a little bit hard, spending money and raising taxes is very hard and doing it with a complicated procedural tool that limits what you can and can’t pass makes it even more difficult. Reconciliation is. I’ve written so many words about it on Slate Dotcom, and I can write more words, but, you know, I’m kind of glad Chuck Schumer is trying to press to see if he can pass multiple reconciliation bills in a year. I actually mentioned that offhandedly as an idea in a piece a while back because it was sort of floating around Congress that this was possible. And so it looks like, you know, looks like Senate Majority Leader Chuck has embraced it, which is cool.

S1: And are we going to be talking about these ideas for a while? Like, is it going to take months to sort out? I mean, we just saw the stimulus pass really quickly. And so I feel like it kind of sets a bar of expectation where you’re thinking, oh, things are passing quickly, but are we about to slow down here?

S2: I think we’re going to slow down a bit. Yeah, I mean, they’re already talking about taking at least three months for this bill to pass. I would expect more, especially if if they end up combining the infrastructure bill and this, you know, families plan, bill, that they’re talking about. If they end up just making it one monster piece of legislation that could take a while. You know, it’s like if you put the entire new New Deal into one one piece of legislation, that’s going to take a bit of time to sort out. So I think we are going to have a moment or two to kind of dwell on the aspects of this plan and what Congress comes up with and think it through more so than we did with the coronavirus Bill.

S1: After the break, what is this infrastructure plan? Tell us about biodynamics. And we’re back. So Mitch McConnell has come out against these plans broadly, but I have to say, looking at the push back so far, this could be me not seeing things. But for some reason, it feels different to me than when I say President Obama was pushing for the health care legislation that became Obamacare. You know, it was clear from the beginning of that fight it was going to be a slog, months long negotiating and for some reason, texturally, this moment feels different for me, even though we’re talking about, again, trillions of dollars in spending. And I’m wondering if you can help me understand why

S2: I’m still trying to understand this, too. I think they’re you know, I we can theorize together.

S1: Jordan has a few theories about why the wind seems to be at the president’s back right now. Legislatively, there’s the fact that Joe Biden isn’t burdened by the scrutiny that came along with being the country’s first black president. And then there’s also timing, unlike Barack Obama, who took office in the middle of an economic death spiral, Biden took control as the country was poised to recover from a collapse. But there’s something else the way Washington thinks about the economy. Jordan says that seems to be changing and that’s true on both sides of the aisle.

S2: The really simple way to put it is that it feels like most Americans, basically all Democrats and a growing number of Republicans, though they aren’t the majority within Congress by any means, feel like we’ve probably milked all we possibly can out of tax cuts and deregulation. And it’s just that’s not the way forward for growth anymore. I’m kind of workshopping a piece about this, thinking about it, you know, Reaganism versus Biden ism. How is Biden ism a rejection of Reaganism? And I think it actually helps to start by thinking about what Reaganism was. Right. Like what was supply side economics and what was it responding to? Close your eyes again. We’ve already imagined America 20 years from now, like, close your eyes and

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S1: now we’re going back in time.

S2: Yeah, let’s go back in time to like the 1970s. In the 1970s, it was this period of economic disappointment, of malaise. Right. The big problem was we were dealing with a combination of high unemployment and inflation known as stagflation. You had you know, I think the the the causes of that are actually poorly understood to this day. But you had, you know, gas lines, the oil shocks caused by OPEC. It’s actually largely forgotten that food prices were skyrocketing at the time. You know, just going to the grocery store, you were seeing your cost of your your shopping cart going up constantly. It felt like America was just the wheels were kind of coming off and no one fully got it. But there were a few ideas that became very popular. One was that if you pushed unemployment too low, right, if you just poured money into the economy, that would become inflationary right near that. So that that wasn’t going to work anymore. You couldn’t just use that. You couldn’t use the the hand of government because

S1: prices would go

S2: up. You were in an era where the idea was that you were trying to control inflation. Right. You’re trying to grow the economy while controlling inflation. And so the notion was that you couldn’t government spending wasn’t going to fix things, wasn’t you know, it was the problem that you couldn’t just pour more money into the economy and hope that you were going to you were going to write things that that was going to set us in the right direction. Instead, what you needed to do was, you know, encourage more business investment. You needed to encourage more people to enter the workforce so that you could grow the economy without putting more pressure on, you know, without creating wage price spirals. That’s just not the issue anymore. Instead, we’re in this period where, if anything, there’s a global savings glut, there’s too much savings, there’s too much basically, you know, no matter how you look at it, there’s just too much capital floating around. Interest rates are incredibly low. That is actually perhaps one of the single biggest problems now is that interest rates have been just stubbornly low for decades.

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S1: So we’ve been fighting the last war.

S2: All right. That was a very different war. And so now the problem isn’t how do you get more capital into the economy? How do you get more investment in or how how do you get how do you help rich people save so they’ll invest? It’s oh, rich people are saving too much and they’re not investing.

S1: How do we get them to spend

S2: that sort of issue are dealing with now? How do you how do you create more spending and how do you deal create more demand Biden ism kind of response? It’s like, well, OK, the government is going to spend and create demand and the government is going to invest directly. We’re just going to do the investment ourselves. And so it is a very much a reversal. And like, you know, when it comes to the corporate tax side of the plan. Right. You know, I think it’s it’s economically significant that this plan is funded by taxing capital. It’s funded by taxing corporations. The idea here is, yeah, we don’t need to create more private savings. We don’t need to increase the return to investors at this point.

S1: We need to claw those savings into the government and invest. I mean,

S2: everyday people, we need to invest them in infrastructure and R&D and, you know, you do need the hand of government now. And, you know, it’s again, it’s you know, inflation was the worry then. It’s not the worry at this point. We’re in such a different economic world that just Reaganism isn’t responding to any of the any of the issues that we have today. And Democrats have, you know, thoroughly understood that at this point. I think and even Republicans, it’s beginning to dawn on them.

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S1: We’ve talked to a couple of times about how this plan is pretty far from being a bill or a law. And you get into a bit of a debate with our colleague Henry Garba, about whether a version of this will even pass. And it was interesting to me because Henry was pretty pessimistic. He was like, no, I don’t think this is going to this is going to make it through. And you weren’t it made me wonder why you were so optimistic.

S2: I have no good reason for being optimistic other than. Hey, other than just the kind of vibe right now. Right. Like you is

S1: lives know

S2: it is. But we were talking about it like there is, you know, to go back to Reagan a bit. There’s a little bit of a morning in America feeling at the moment, right, that there’s a light at the end of the tunnel with the pandemic and or not dealing with a lunatic in the White House anymore. And people seem to want to take advantage of the historical moment and seize the opportunity. And I just I feel like there’s forward momentum. And that could kind of you could get a little bit of a legislative flywheel going, you know, to use a terrible Silicon Valley term. But that that progress is going to you know, that progress will beget progress. It’s sheer dumb, naive optimism on my part that something like this might actually pass.

S1: Turner Eiseman, thank you so much for joining me.

S2: Thanks for having me on.

S1: Jordan Weissmann is Slate’s senior business and economics correspondent and that’s the show. What Next is produced by Kamal Dilshad, Mary Wilson, Daniel Hewitt, Alan Schwarz and Davis Land. Alicia Montgomery and Allison Benedikt editors. And make sure we do our year end reviews. And I’m Mary Harris. My Twitter is where you can see one of two cakes I made for Easter. Go check it out. It’s at Mary’s Desk. And thanks for listening. I’ll talk to you tomorrow.