Biden Proclaims a `Once-in-a Generation Investment in America’

by Bonnie James

April 10, 2021 (Leesburg, Virginia) – President Joe Biden has vowed to enact a massive infrastructure and jobs program, to begin virtually immediately – or, as soon as he can get it through Congress. And there’s the sticking point. Biden had successfully ushered his huge, $1.9 trillion relief package into law—albeit with zero Republican support. While the GOP members of the House and Senate whine, hypocritically, that Biden should deliver on his promise that he would govern in a bipartisan manner, the president noted that his policies do in fact have wide bipartisan support among the American people, if not among elected Republicans. “I’ve not been able to unite the Congress, but I’ve been uniting the country,” the president told reporters at the White House March 25. But, he said, “We have to come together. We have to.”

If Biden is unable, through negotiating, cajoling, or outright threatening, to bring the naysayers along, he intends to steamroll over the recalcitrant Senate Republicans  – and the one or two Democratic holdouts – even if it means amending arcane Senate rules, possibly including the filibuster[1], to pass legislation with a simple majority vote or, failing that, by Executive Order.

“I think my Republican colleagues are going to have to determine whether or not we want to work together,” he said, “or they … just decide to divide the country, continue the politics of division. But I’m not going to do that; I’m just going to move forward and take these things as they come.”

The feature of Biden’s proposed infrastructure program that is driving the GOP into apoplectic fits – led by the iracible Mitch McConnell, who has still not accepted the fact that he is no longer majority leader of the Senate – is Biden’s pledge to raise the corporate tax from 21% to 28% to pay for his massive infrastructure program. In fact, this rate would merely return it to the rate it was before Trump’s huge corporate tax cut in 2017. Needless to say, there is tremendous popular support for the Biden plan. In fact, about 75% of those polled, including nearly 60% of Republicans, back the plan.

The conservative columnist and pundit David Brooks, warned in the New York Times Aug. 8, that unless the US returns to the American system of economics, “This could be the Chinese century, with their dynamism and our decay.” China, he wrote, could become the “dominant model around the globe.” A Biden adviser cited by Brooks reported the president “believes that democracy needs to remind the world that it, too, can solve big problems. Democracy needs to stand up and show that we are still the future.” Brooks observed that while Bidenomics is often compared to FDR’s New Deal, “I’d say this is an updated, monster-size version of `the American System,’ the 19th-century education and infrastructure investments inspired by Alexander Hamilton, championed by Henry Clay and then advanced by the early Republicans, like Abraham Lincoln,” he wrote.[2] “That was an unabashedly nationalist project, made by a youthful country, using an energetic government to secure two great goals: economic dynamism and national unity.”

The Biden plan, he continued, owes more to Hamilton than to socialism, and therefore appeals to moderates as well as progressives.

`Help Is Here’

Biden opened his first presidential press conference March 25, with this promise: “Help is here, and hope is on the way.”

He noted pointedly that infrastructure “used to be a great Republican goal and initiative,” he added “I still think the majority of the American people don’t like the fact that … we rank 13th globally in infrastructure. China is investing three times more in infrastructure than the United States is.

As presented in a White House Fact Sheet on the American Jobs Plan, and elaborated by the president in a March 31 speech to the nation, would do the following:

• Deliver clean drinking water, a renewed electric grid, and high-speed broadband to all Americans.

• Build, preserve, and retrofit more than 2 million homes and commercial buildings, modernize our nation’s schools and child-care facilities, and upgrade veterans’ hospitals and federal buildings.

• Solidify the infrastructure of our care economy by creating jobs and raising wages and benefits for essential home care workers.

• Revitalize manufacturing, secure U.S. supply chains, invest in R&D, and train Americans for the jobs of the future.

• Create good-quality jobs that pay prevailing wages in safe and healthy workplaces while ensuring workers have a free and fair choice to organize, join a union, and bargain collectively with their employers.

• Fix highways, rebuild bridges, upgrade ports, airports. and transit systems.

According to Business Insider March 31, spending for the Biden plan breaks down as follows:

Transportation

• $621 billion for transportation

Water

• $111 billion for water infrastructure including:

• $45 billion towards fully eliminating lead pipes

• $56 billion to help modernize water systems

Broadband and power

• $100 billion for broadband

• $100 billion for power infrastructure

Housing and education

• $213 billion for creating and retrofitting over 2 million housing units, with a $40 billion investment in public housing infrastructure

• $100 billion for public schools

Research and development

• $180 billion towards R&D, including:

• $50 billion for the National Science Foundation

• $30 billion for innovation and job creation R&D

Manufacturing and labor

• $300 billion for American manufacturing and small business

• $100 billion for workforce development.

Joe Biden and Franklin Roosevelt

Biden was born in 1942 while FDR was still in the White House and the US was experiencing a massive industrial buildup for the war, making the US the “Arsenal of Democracy.” He has often associated his presidency with that of Franklin Roosevelt, whose history-making rescue of the US economy in the 1930s and ‘40s is, for him, a model. Like FDR, Biden sees himself as the champion of working men and women, and the leader who is willing to challenge the powers-that-be, to abandon old shibboleths to bring about profound change in the social/economic order of things. In fact, it was FDR’s massive infrastructure development programs, such as the TVA which brought electric power to a vast swath of the country, and projects like the Hoover Dam that brought fresh water to millions in the West.

It should be recalled that FDR boasted that he was hated by the Wall Street speculators, whom he called “the moneychangers of the temple,” and that he was proud of their hatred of him. Biden, for his part, spoke of a vision “not seen through the eyes of Wall Street or Washington, but through the eyes of hardworking people, like the people I grew up with.…”

The Covid-19 pandemic has led to severe economic hardship for millions of Americans, who have lost their jobs, he said, “while the wealthiest 1 percent of Americans saw their net worth increase by $4 trillion…. Well,” he added, “it’s time to change that,”

In fact, Biden’s plan is the largest American jobs investment since World War II.

“Is it big? Yes. Is it bold? Yes. And we can get it done….”

Biden then took on his critics, who say “we shouldn’t spend this money. They ask, `What do we get out of it?’ Well, they said the same thing when we flew into space for the first time.” He recalled that “pushing the frontiers [of science] led to big benefits back home,” and pointed to some of the new technologies that were spun out of the space program. “When NASA created Apollo’s digital flight control system — unheard of at the time — it led to technologies that help us today to drive our cars and fly our planes…. At least 2,000 products and services have been developed and commercialized as a result of American space exploration.

“…Altogether, along with the American Rescue Plan, the proposal I put forward will create millions of jobs – estimated by some Wall Street outfits: over 18 million jobs over four years; good-paying jobs.”

No One Wants to Pay for It

“Everybody is for doing something on infrastructure. Why haven’t we done it? Well, no one wants to pay for it.”

As Biden pointed out, Trump’s 2017 corporate tax cut increased the national debt by $2 trillion; the benefits accrued to the wealthiest Americans. “It was bad for American competitiveness, deeply unfair to the middle-class families, and wrong for our future,” Biden stated.

Then the president hit the Republicans where they live: “Historically, infrastructure had been a bipartisan undertaking, many times led by Republicans. It was Abraham Lincoln who built the transcontinental railroad. Dwight Eisenhower, a Republican—the Interstate Highway System.  I could go on.

“And I don’t think you’ll find a Republican today in the House or Senate – maybe I’m wrong, gentlemen – who doesn’t think we have to improve our infrastructure. They know China and other countries are eating our lunch. So, there’s no reason why it can’t be bipartisan again.

“The divisions of the moment shouldn’t stop us from doing the right thing for the future.”

Perhaps Nobel Prize economist Paul Krugman, writing in the New York Times, summed it up best: “Bidenomics consists, roughly speaking, of large-scale public investment paid for with highly progressive taxation. And both of these things are as American as apple pie. So when Republicans denounce the American Jobs Plan as an `out-of-control socialist spending spree,’ remember, large-scale public investment is the American way.”

The National Infrastructure Bank and the Biden Plan

A bill introduced in Congress last year, House Bill 6422 (https://www.congress.gov/bill/116th-congress/house-bill/6422?s=1&r=4), for a National Infrastructure Bank (NIB), is backed by numerous local and state lawmakers and unions; it represents the biggest and boldest solutions to our failing economy and infrastructure that has been put forward (see (https://www.nibcoalition.com/).

According to Alphecca Muttardy, the senior economic spokesperson for the Coalition for a National Infrastructure Bank, the NIB plan is the perfect complement to Biden’s American Jobs Plan, and answers the question most often raised about it: How will we pay for it Biden’s American Jobs Plan, according to Muttardy, “makes a great start at rebuilding crumbling infrastructure, and re-authorizing infrastructure spending through the federal budget.” However, she cautions, much larger sums are needed to truly meet all the nation’s needs. The American Society of Civil Engineers (ASCE) estimates that it will cost more than $6 trillion over ten years to pay for urgently needed infrastructure repairs. Even after $3.5 trillion from the federal coffers, plus state and local financing, there will still be $2.6 trillion to meet the existing requirements.

Muttardy, a macroeconomist formerly with the International Monetary Fund, says that more than $1 trillion will be needed just for new water infrastructure; if affordable housing, high-speed rail, broadband, and other big projects are added, another $5 trillion would be needed.

As specified in HB 6422, the Bank, modelled on the First Bank of the United States established by Treasury Secretary Alexander Hamilton, would be capitalized by private investors contributing their Treasury holdings in exchange for preferred stock, and would make loans just like any commercial deposit-taking bank. The added $5 trillion investment would create up to 25 million new high-paying jobs, drive economic expansion, and contribute significantly to local tax receipts.

The Coalition is now working with elected officials, business and labor organizations, and citizen activists, to expand support for the NIB. It has also directly engaged in dialogue with institutions that interface with the Biden administration.

Notes

1. Currently, it takes two thirds 60 votes (out of 100) in the Senate to pass legislation, because of the filibuster rule—meaning that it takes only a minority of 41 votes to bury legislation supported by the majority. Oh, and did I mention that the number of Senators is now tied at 50 Democrats and 50 Republicans (in case of a tie, the vice president, Kamala Harris, is empowered to cast the tie-breaking vote), and with most bills now requiring the supermajority, the Senate is bogged down and incapable of legislating. Under McConnell dozens (hundreds?) of bills never see the light of day, never get a vote. And that is where things stand.

2. For more on the “American System,” see https://americansystemnow.com/