Ben Roback is Head of Trade and International Policy at Cicero Group.
Joe Biden is free to grow the size of the state because no one is there to oppose him
Still within the first 100 days of his presidency, Joe Biden continues to call on the power of the federal government to dig America out of a Covid-shaped hole.
The size of the state is set to grow even further as Biden shapes the future of his presidency. He wants to use a major infrastructure package to fire up the economic recovery, and being able to pass it without any Republican support in the Senate means that the GOP has effectively abandoned the playing field in order to focus instead on culture wars.
Senior Republicans like Sen. Mitch McConnell appear much more focussed on telling big corporates to stay out of politics. Biden is free to grow the size of the state because there is no one left to oppose him.
An FDR-size presidency?
Recovering from a major “moment” like a pandemic or war presents governments with a rare chance to go big in policy terms. Voters are desperate for intervention and change.
History points to Franklin Roosevelt and Lyndon Johnson as worthy examples. Both men inherited a huge political and economic crises, and both have tried to solve them with big money and big government. Roosevelt’s “New Deal” was based on the principle that the power of the federal government was needed to get the country out of the depression.
Fast forward to 2021, Biden’s “American Jobs Plan” is a $2.3 trillion infrastructure package with investments directed towards roads, schools, broadband and clean energy. Like Roosevelt’s political philosophy and vision, it is based on the idea that when Americans fall down through no fault of their own, the state can help them get back on their feet.
That economic agenda received a significant boost when the Senate Parliamentarian ruled that Democrats could enact another resolution package this year. Put simply, this means that additional bills can be passed this year without any Republican support.
With the Senate split 50-50 and Vice President Kamala Harris making the tie-breaking vote, legislation would have been doomed to failure had it required the 60 votes typically needed. Republicans instead have the green light to oppose the president’s agenda without any consequence whatsoever.
That gifts Biden something of a free hand in a significant deployment of the power of the state. He campaigned citing infrastructure as something that all sides in Washington could agree on. A chance to put a bipartisan presidency into action.
For a country that is home to Wall Street on one coast and Silicon Valley on the other, far too many American roads, bridges and airports in between are crumbling. America gets a C- in its 2021 infrastructure report.
Janet Yellen, the Federal Reserve Chair, wants an increase in corporation tax (21 per cent to 28 per cent) to help pick up the tab. The legislation will only pass if Biden can keep his party united, and once again the main opposition will come internally within the Democratic caucus in the Senate.
Republicans want a more focussed and cheaper plan that focuses on roads and bridges, but the consequence of the Senate Parliamentarian’s ruling means that the real opposition will come from Democrats in competitive states like Sen. Joe Manchin who want less big Government, not more.
Neither fish nor fowl, but it will taste awfully good
After the financial crisis and at the outset of the Obama presidency, the White House sought similarly to expand the role of the state. Republicans opposed the 2009 rescue package on the grounds that it was a significant government overreach that swelled the national debt to irresponsible levels.
The White House slowly limped along, enacting a slimmed down stimulus package amid fears of inflation and the political risk of growing the debt too much. Two years later, they were punished by heavy defeats in the midterm elections.
Biden, a first-hand witness to those decisions in 2008-09, wants to act quickly and boldly while his party has unified control of Congress, knowing full well that could change next year.
In an electoral system peppered with elections as frequently as in the United States, good politics often trumps good policy. Biden, with one eye on the first set of midterms in which the governing party is historically punished, understands that he and his party will be judged on their handling of the pandemic and the immediate steps to recovery. In that context, he is seeking to use the full force of the state to deliver for voters who care more about results than how they were achieved.
In 1933, Roosevelt signed the Tennessee Valley Authority into law. Controversial at the time, Roosevelt said: “I’ll tell them it’s neither fish nor fowl, but whatever it is it will taste awfully good to the people of the Tennessee Valley.”
Biden campaigned with promises to control the pandemic and end decades of hyper-partisan gridlock in Washington. If he can deliver the former and turbocharge the economic recovery, will Americans really care about how he did it? Or that he abandoned the latter?
Once a dominant force in the Republican Party, the freedom caucus, and conservatives whose raison d’être was small government, are now a fading force. Instead, the GOP is abandoning domestic politics writ large in order to fight culture wars in the press and on Capitol Hill.
It is much more Donald Trump than Paul Ryan. In that respect, Biden’s calculation that he can grow the size of the state could be a shrewd one – if nothing because there are no Republicans left to oppose him.