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It took the electoral shock of last week in Virginia to unblock the internal impasse of the Democratic Party. Friday night’s passage of the bipartisan $ 1.2 billion infrastructure bill brought a remarkably optimistic end to the darkest week in Joe Biden’s presidency. The prospect of also passing the $ 1.75 billion “build back better†bill by Thanksgiving would be good news for the beleaguered president. Nothing succeeds like success, as the saying goes.
The smaller bill was passed hours after the most encouraging jobs report in months – with more than half a million added to payroll in October. If the recent reduction in Delta infections persists, the U.S. economy will likely be in good shape heading into next year’s congressional elections. While history and recent polls have not been on Biden’s side, there is no iron law that says an outgoing party must lose control in the president’s first mid-term term. George W Bush reversed this trend in 2002.
Political relief aside, it will take more than one infrastructure bill to change this president’s fortunes. By some measurements, this is the largest public infrastructure upgrade since Dwight D Eisenhower’s presidency at the start of the Cold War. The bill includes $ 550 billion in new spending over a decade, making it a little less dramatic than its overall figure.
Nonetheless, the effects of the new money for roads, railways, ports, rural broadband, water supply, and the construction of an electric car charging network in the United States will begin to show. make it felt early next year. While primarily funded by accounting tricks rather than higher taxes, the impact of the bill will help ease inflationary pressures in the United States by reducing supply bottlenecks. It will thus help cement the post-pandemic rebound of the US economy.
The adoption of the larger bill, however, is still far from assured. Unlike the infrastructure package, which was backed by 13 Republican senators, rebuilding better is a purely Democratic affair. Even then, getting Democratic unanimity, which is necessary to pass anything in the Senate at 50:50, will be a struggle.
Objections from centrists stripped the bill of some of its main features, including increased power for the Internal Revenue Service to crack down on tax evasion, new powers for Medicare to negotiate lower prices for prescription drugs , the right to paid family and medical leave. , and tax increases on higher income brackets.
What’s left is less than half the size of the original bill and considerably less transformative than its original promise. It would still provide a boost to middle-class families, and especially women, by funding universal early childhood learning and extending the child tax credit. This is expected to increase the anemic female labor force participation rate in the United States by reducing the often crippling childcare burden. Again, such measures are disinflationary.
The bill would also make the largest investment in renewable energy in US history. Although it has been stripped of its most effective provision on climate change, which would have accelerated the transition of the electricity sector from fossil fuels, what remains is substantial.
Would they be enough to get Biden back on track? Since he staked his credibility on passing both bills, it would be hard to imagine doing so without passing the second. Biden’s approval ratings began to decline in August when the Afghan troops withdrew, which hit his claim to be competent. Rising inflation, higher murder rates and a 10-year spike in illegal border crossings have fueled public concern. The best response to voter disaffection is action. Pushing through big legislation is exactly what Biden should be doing.
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