Tag Archives: American Rescue Plan

The Start of a New Deal for America

Posted on by

Nicholas Kristof of The New York Times favorably compares Biden’s “American Rescue Plan” to the first days of Franklin Roosevelt’s New Deal. One reason is that it would seriously reduce child poverty:

Coverage of Biden’s $1.9 trillion plan has understandably focused on the $1,400 payments to individuals, the increased unemployment benefits, the assistance to local governments, the support for accelerated vaccine rollout and the investments to get children back in schools. But there is so much more: food assistance, policies to keep families from becoming homeless, child care support, a $15 federal minimum wage and an expansion of the earned-income tax credit to fight poverty.

To me, the single most exciting element of the Biden proposal is one that has garnered little attention: a pathbreaking plan that would drastically cut child poverty.

It is a moral stain on America that almost one-third of people living in poverty are children, a higher share in poverty than any other age group.

So it’s exhilarating that Biden included in his plan a temporary expansion (I hope it will be made permanent) of the child tax credit in a way that would do more than any other single policy to reduce child poverty and make America more truly a land of opportunity. In effect, Biden is turning the child credit into something like the child allowances that are used around the world, from Canada to Australia, to reduce child poverty.

The Biden child poverty plan was previously offered as legislation backed by Senators Michael Bennet of Colorado and Sherrod Brown of Ohio, and a Columbia University analysis found that it would reduce child poverty in the United States by 45 percent. For Black children, it would reduce poverty by 52 percent, and for Native American children, 62 percent.

“This is the boldest vision laid out by an American president for fighting poverty, and child poverty in particular, in at least half a century,” said Luke Shaefer, a poverty expert at the University of Michigan.

Americans too often accept poverty or race gaps as hopeless and inevitable. In fact, the evidence suggests they are neither. As Britain’s prime minister, Tony Blair cut child poverty by half with a strategy that included Biden-style child allowances.

[Another] example is the New Deal . . . . Results of Roosevelt’s boldness included Social Security, rural electrification, jobs programs, networks of hiking trails, the G.I. Bill of Rights and a 35-year burst of inclusive growth that arguably made the United States the richest country in the history of the world.

Yet for the last half-century, we mostly retreated. We overinvested in prisons and tax breaks for billionaires while underinvesting in education, public health and those left behind.

So we think of the United States as No. 1, but America ranks No. 28 worldwide in well-being of citizens, according to the Social Progress Index. And the United States is one of only three countries to have gone backward since the index began in 2011.

Americans are less likely to graduate from high school, more likely to die young, less safe from violence and less able to drink clean water than citizens in many other advanced countries. And then along came Covid-19 and magnified the disparities.

As Biden noted in his speech Thursday night, one in seven households in America now report that they don’t have enough food. Some 12 million children live in households that lack enough food. . . . 

Yes, Biden’s proposal would be costly, but a major study from the National Academies of Sciences, Engineering and Medicine found that child poverty is even more expensive, costing America at least $800 billion a year in diminished productivity, higher crime and elevated medical costs.

Helping people is often harder than it looks. But it is difficult to overstate how much difference Biden’s child poverty plan would make for Americans, for economic growth, for the country’s international competitiveness — and, let’s acknowledge it, for the moral framework of the United States. In the long run, this would do more to advance American equality, opportunity and decency than almost anything else.

Unquote.

There will be Republican opposition to Biden’s plan, of course, which will almost certainly mean that it’s effectiveness is reduced. But it’s encouraging that the U.S. Chamber of Commerce, not exactly a hotbed of socialism, has endorsed it (to some extent):

The U.S. Chamber of Commerce welcomes the introduction of President-elect Biden’s American Rescue Plan. Specifically, we applaud the President-elect’s focus on vaccinations and on economic sectors and families that continue to suffer as the pandemic rages on. We must defeat COVID before we can restore our economy and that requires turbocharging our vaccination efforts.  We look forward to working with the new administration and Congress on the details and in ensuring that any additional economic assistance is timely, targeted, and temporary.

It Has To Be Different This Time

Posted on by

Joe Biden’s proposed Covid-19 relief plan is a big deal. From Vox:

The proposal, called the American Rescue Plan, is divvied up into three buckets:

$400 billion for dealing with the coronavirus, including vaccines and testing;

$1 trillion in direct relief to families; and

$400 billion in aid to communities and businesses.

It includes money for testing, vaccines, and public health workers; $400 a week in extended federal unemployment insurance through September; rental assistance; emergency paid leave; and funding for reopening schools, among other items. And, as Democrats promised when campaigning in Georgia, Biden’s plan would send out another $1,400 in stimulus checks, bringing the total this year to $2,000.

Greg Sargent of The Washington Post discusses the relatively encouraging politics of the matter:

The sheer scale of the economic rescue package that Joe Biden has unveiled has surprised a lot of observers who were expecting the president-elect to offer something more in line with his centrist, incrementalist past.

In unveiling the new [roughly] $1.9 trillion package, Biden declared that rather than worry about “our debt situation,” it’s time to spend big “with interest rates at historic lows.” As Slate’s Jordan Weissmann put it: “I would not have anticipated that Joe Biden would become a clear and forceful advocate of deficit spending.”

What accounts for this ambition? Most obviously, this crisis is truly extraordinary. The new leadership must execute a massive vaccine-distribution operation amid a broader effort to tame a raging pandemic, while securing assistance to struggling Americans plus a big burst of stimulus spending to address a deepening economic crisis.

Another obvious answer is that the politics have shifted. The Democratic Party has moved left on fundamental economic questions, due in large part to advocacy from Sen. Bernie Sanders (I-Vt.), Sen. Elizabeth Warren (D-Mass.) and others.

But still another reason, one that has been less remarked-upon, is that many Democrats have lived through what happened when former president Barack Obama inherited another major economic crisis from another Republican president.

As has been endlessly hashed out, Obama opted for a stimulus that fell short of what was needed. Putting aside why that happened, what everyone now knows is that it was a serious mistake. Democrats lost the House in 2010 and spent the remainder of Obama’s presidency locked in brutal fiscal trench warfare with a GOP determined to starve the recovery with austerity to cripple his presidency under the guise of fake concerns about spending and deficits.

Many Democrats who lived through that, a lot of whom are still in Congress and some of whom are advising Biden — who himself lived through it as vice president — must be wary of a repeat.

Making them even more wary, one hopes, is the fact that Republican deficit concerns evaporated once a Republican became president. Indeed, the economy was good (at least until the coronavirus shattered it) precisely because it was fueled by stimulus.

As Neil Irwin reports, the Trump years have caused a change among economists, who are now more receptive to a hotter economy — with higher deficits and lower unemployment — and less wary of inflation than they traditionally have been. That has fueled a political shift toward tolerance of deficits, making Democrats less wary of bad-faith criticism for overspending.

But on top of that sea change, Democrats have to be feeling extra-burned by the fact that the GOP pivoted so abruptly from voicing phony deficit concerns under a Democratic president to not caring about them anymore under a Republican.

The lesson of those years is that Txxxx the political beneficiary of that chicanery. He consistently had high approval ratings on the economy, and he might have won reelection on the strength of that if the coronavirus hadn’t intervened.

Democrats appear to be learning from that lesson right now.

On still another front, the makeup of the Senate Democratic caucus is different. During the Obama years you had centrist old-liners chairing key committees . . . Expected to chair those respective committees in the new Senate now are Ron Wyden of Oregon, Sanders, and Sherrod Brown of Ohio. All are far more progressive than those previous Democratic chairs. . . .

Wyden, for his part, believes this combination of things — an awareness of getting played by phony GOP deficit concerns and more progressive Senate committee chairs — will make this time very different from 2009 and 2010.

“The key lessons we learned were the importance of not assuming there will be multiple bites at the apple and not taking your foot off the gas in the middle of economic recovery,” Wyden told me in a statement. “We cannot let a popular recovery agenda get derailed by fiscal fearmongering that we know is unjustified and phony.”

“Committee chairs are going to be aggressive, and want to get things done,” Wyden added. “Overall, I think the dynamics have changed a lot since 2009.”

To be sure, it still remains to be seen how big a package Biden will actually wrest from Congress. He has already announced he hopes to pursue bipartisan support in the Senate rather than try to get the legislation passed with a simple majority via the “reconciliation” process.

So it’s still possible that Biden could end up on a futile hunt for Republican support or end up compromising his stimulus package downward. But there is at least some reason for optimism that Democrats have learned from what happened last time. . . .