‘It’s bold, yes, and we can get it done.” So declared President Joe Biden launching his $2tn plan last week to overhaul US infrastructure – ranging from fixing 20,000 miles of roads to remaking bridges, ports, water systems and “the care economy”, care now defined as part of the country’s infrastructure. Also included is a vast uplift in research spending on eliminating carbon emissions and on artificial intelligence. And up to another $2tn is to follow on childcare, education and healthcare, all hot on the heels of the $1.9tn “American Rescue Plan”, passed just three weeks ago.
Cumulatively, the scale is head-spinning. Historians and politicians are already comparing the ambition with Roosevelt’s New Deal or Lyndon Johnson’s Great Society programme. In British terms, it’s as though an incoming Labour government pledged to spend £500bn over the next decade with a focus on left-behind Britain in all its manifestations – real commitments to levelling up, racial equity, net zero and becoming a scientific superpower.
Mainstream and left-of-centre Democrats are as incredulous as they are joyful. Bernie Sanders, congratulating Biden, declared that the American Rescue Plan “is the most significant legislation for working people that has been passed in decades”. It was “the moment when Democrats recovered their soul”, writes Robert Kuttner, co-editor of the progressive magazine the American Prospect, ending a 45-year embrace of “Wall Street neoliberalism”. He concludes: “I am not especially religious, but I am reminded of my favourite Jewish prayer, the Shehecheyanu, which gives thanks to the Almighty for allowing us to reach this day.”
What amazes the party and commentators alike is why a 78-year-old moderate stalwart such as Biden has suddenly become so audacious. After all, he backed Bill Clinton’s Third Way and was a cheerleader for fiscal responsibility under both him and Barack Obama, when the stock of federal debt was two-thirds of what it is today.
Covid-19 has exposed the precariousness of most Americans’ lives. It has re-legitimised the very idea of government
Now, the debt is no longer to be a veto to delivering crucial economic and social aims. If Trump and the Republicans can disregard it in their quest to cut taxes for the super-rich, Democrats can disregard it to give every American child $3,000 a year.
It is not, in truth, a complete disregard. Under pressure from centrist Democrats, the infrastructure proposals over the next 15 years are to be paid for by tax rises, even if in the first stages they are financed by borrowing. Corporation tax will be raised progressively to 28%, a minimum tax is to be levied on all worldwide company profits, along with assaults on tax loopholes and tax havens.
If others have better ideas, says Biden, come forward, but there must be no additional taxing of individual Americans whose income is below $400,000 a year. It’s an expansive definition of the middle class, witness to the breadth of the coalition he is building. But even these are tax hikes that Democrats would have shunned a decade ago.
It is high risk, especially given the wafer-thin majorities in both the House of Representatives and Senate. With implacable Republican opposition, it requires a united Democratic party, which Biden is orchestrating with some brilliance, his long years in Washington having taught him how to cut deals, when and with whom. He judiciously pays tribute to Sanders, on the left, for “laying the foundations” of the programme and flatters a conservative Democrat centrist such as West Virginia’s Joe Manchin, who insists on tax rises to pay for the infrastructure bill. What will be truly radical is getting the programme into law.
Yet, still: why, and why now? The answer is the man, the people round him, the gift of Donald Trump and, above all, the moment – the challenge of recovering from Covid. Biden’s roots are working class; beset by personal tragedies, charged by his Catholicism, his politics are driven by a profound empathy for the lot of ordinary people. He may have surrounded himself with superb economists – the treasury secretary, Janet Yellen, Cecilia Rouse and Jared Bernstein at the Council of Economic Advisers, Brian Deese at the National Economic Council, Lina Khan at the Federal Trade Commission – who are the intellectual driving forces, but he himself will have been influenced as much by the Catholic church’s increasingly radical social policy, represented by Pope Benedict XVI’s revision of the famous encyclical Rerum Novarum.
What makes the politics work so well is Trump’s legacy in uniting Democrats as never before while dividing Republicans. Biden knows the danger of the midterm elections in 2022, having seen his Democrat predecessors lose control of the Senate, House or both, so introducing gridlock. His bet is that his popular programme, proving that big government works for the mass of Americans, rather than wayward government by tweet, will keep divided Republicans at bay. Better that than betting, like Clinton and Obama, on the merits of fiscal responsibility, which Republicans, if they win power, will torch to serve their own constituency.
But the overriding driver is the pandemic and the way it has exposed the precariousness of many Americans’ lives. It has re-legitimised the very idea of government: it is government that has procured and delivered mass vaccination and government that is supporting the incomes of ordinary Americans. Unconstrained US capitalism has become too monopolistic; too keen on promoting fortunes for insiders; too neglectful of the interests, incomes and hopes of most of the people. An astute politician, Biden has read the runes – and acted to launch a monumental reset. Expect more to come on trade, company and finance reform and the promotion of trade unions.
The chances are he will get his programmes through and they will substantially work. The lessons for the British left are clear. Left firebrands, however good their programmes, may appeal to the party faithful. But it takes a Biden to win elections and then deliver. With that lesson learned, we, too, may one day be able to invoke the Shehecheyanu.
• Will Hutton is an Observer columnist