Evoking FDR, Biden Spending Push Is a Tightrope Walk
(AP Photo/Evan Vucci)
Evoking FDR, Biden Spending Push Is a Tightrope Walk
(AP Photo/Evan Vucci)
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One week before the election, Joe Biden went south. He was headed for  Franklin Delano Roosevelt’s familiar  Georgia getaway at the foot of Pine Mountain in Meriwether County. Known as “the Little White House,” it was FDR’s frequent retreat of during the Great Depression and the perfect backdrop for a Democratic presidential candidate in 2020.

“This place, Warm Springs, is a reminder that, though broken, each of us can be healed,” Biden told socially distanced supporters spread out on the lawn. “That as a people and a country, we can overcome a devastating virus. That we can heal a suffering world. And yes, we can restore our soul and save our country.”

Biden went on to carry Georgia, win the presidency, and adopt Franklin Roosevelt’s approach to governance. The new president makes no secret of fashioning himself as something of a second FDR and is known to host private chats with historians specializing in that progressive administration. Now Biden is pushing a massive public works project all his own: $2 trillion in infrastructure spending introduced Wednesday as a chance “to rebuild the backbone of America.”

“It’s not a plan that tinkers around the edges,” Biden told supporters in a Pittsburgh union hall. “It is a once-in-a-generation investment in America, unlike anything we’ve seen or done since we built the interstate highway system and the space race decades ago.”

All the White House must do now is sell Biden’s 21st century iteration of the New Deal, along with the trillion-dollar tax increase that comes with it, to the public. This will be as difficult as it is ambitious. Biden wants $621 billion for physical infrastructure -- money for bridges and roads, airports and seaports, public transit and electric vehicles. He is asking for $300 billion to replace lead water pipes, expand Internet access, and upgrade electric grids. Another $300 billion would go toward retrofitting public housing and public schools. Then there is a proposed $400 billion to care for elderly Americans and an additional $580 billion to bolster manufacturing and job training efforts for the next generation.

Rather than just borrow, the administration has opted also to tax. And rather than get too caught up in the details, Biden has once again invoked a sense of urgency to make the sale. “Put simply, these are investments we have to make,” he said. “We can afford to make them, or put another way, we can’t afford not to.”

The taxes would make history, Steven M. Rosenthal, a senior fellow at the nonpartisan Tax Policy Center, told RealClearPolitics. “The Biden tax increases would be the largest we have seen in decades going back to FDR days. We need large tax increases to pay for the ambitious infrastructure spending that he contemplates.”

Republicans, meanwhile, seem to have already made up their minds. “It’s like a Trojan horse,” Senate Minority Leader Mitch McConnell told reporters in Kentucky. “It’s called infrastructure, but inside the Trojan horse it’s going to be more borrowed money, and massive tax increases on all the productive parts of our economy.”

And on this point, Republican brass and the Tea Party old guard are simpatico.

“There's been a common thread among all Biden's efforts so far: He promises ‘unity,’ then delivers division,” Heritage Action Executive Director Jessica Anderson told RCP, dismissing the package as a “grab bag of payoffs to the left-wing base.”

Given that his $1.9 trillion pandemic stimulus package didn’t receive a single GOP vote in the Senate, this won’t come as a surprise to Biden. He held out hope publicly, extending an invitation to Republicans to meet with him in the Oval Office but insisting, “We have to get it done.” That intention now rests on razor-thin Democratic majorities in the House and especially the Senate, where the bill will most likely need to be passed through budget reconciliation to bypass the normal 60-vote threshold.

The White House can’t afford any Democratic defections, which makes any intra-party grumbling about the costly outlay troubling. House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer must now herd the closest thing to cats on Capitol Hill and keep the disparate factions within their caucus from sinking the president’s marquee effort before the midterms.

There are at least three groups to follow: moderates now exhausted by deficit spending after the American Rescue Plan; coastal advocates for affluent tax relief; and “Democratic socialists” who want even more spending -- much more.  Sen. Joe Manchin has been the critical swing vote in the upper chamber so far, and while he told NBC News that he favors an “enormous” spending bill, the West Virginia Democrat insisted Congress should do “everything we possibly can” to pay for it. His preference, one shared by Montana Sen. Jon Tester: Roll back the Trump tax cuts.

The White House doesn’t have a problem taxing the rich to spend, but it also has to satisfy the seemingly contradictory demands of Democrats from high-tax blue states.

For Rep. Josh Gottheimer, an infrastructure bill is a non-starter if Biden doesn’t reinstate the State and Local Tax deductions that are worth billions and are predominantly utilized by the top 1% of earners. “Simply put,” the New Jersey Democrat told Axios, “no SALT, no dice.” He isn’t alone. New York Rep. Tom Suozzi also vowed to oppose any infrastructure deal “unless we reinstate SALT as part of the deal.”

Those concerns are minor when compared to the dissatisfaction of some progressives. While Republicans balked at the price tag, Rep. Alexandria Ocasio-Cortez rolled her eyes even before Biden delivered his speech. “This is not nearly enough. The important context here is that it’s $2.25T spread out over 10 years,” she tweeted. Her recommendation? “Needs to be way bigger.”

All the squabbling does not surprise Jim Kessler, a co-founder of Third Way, a centrist Democratic think tank. A longtime policy director in Schumer’s office, Kessler predicts that while “the different wings of the party are going to have their demands and complaints,” Biden will ultimately be successful. After all, he told RCP, “this is the most ambitious domestic package since FDR.”

Going back to the campaign and his stop at Georgia’s “Little White House,” Biden has pitched his infrastructure plan as a way to bring the country back from economic morass. It is a similar task to the one President Obama took up in the wake of the Great Recession, Kessler said, but with a key difference: “Obama had to do things that were necessary for the economy, but that the American people hated, and that was bailing out financial institutions. Biden has the luxury in that nothing he has to do turns the stomachs of Americans, and feels like an injustice.”

So far, at least, this  is true. The public generally likes infrastructure spending. New polling from Morning Consult shows that 57% of voters say they’d be more likely to support Biden’s infrastructure plan if it were funded by tax increases on those making over $400,000. Another 47% of voters say they’d be more likely to support the proposal if it were funded by increases to the corporate tax rate. Those polling numbers were ricocheting across the halls of the White House, especially in the office of Biden’s chief of staff, Ronald Klain. Biden made sure to lean in with populist tones on both points in Pittsburgh.

His vision of a renewed America, one rebuilt by his spending, was one “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 president said on Wednesday. Hence, his proposal to increase the corporate tax rate from 21% to 28%.

“No one should be able to complain about that. It’s still lower than what that rate was between World War II and 2017,” Biden said. And then with words that could have been cribbed straight from a Bernie Sanders’ campaign speech, the president repeated the dubious claim that many Fortune 500 companies, “the biggest companies in the world, including Amazon, use various loopholes so they pay not a single, solitary penny in federal income tax.”

Lest anyone forget his campaign promise of centrism, Biden repeated his vow that “no one” making under $400,000 would see a tax increase, although his own White House press secretary has clarified that the pledge would not apply to families making more than that income.

“This is not about penalizing anyone. I have nothing against millionaires and billionaires. I believe in American capitalism. I want everyone to do well,” Biden added. But companies must pay what Biden considers their fair share, he added, and the money is necessary to keep the country competitive. Here, the president made a nationalist argument to pique Republican sensibilities.

“They know China and other countries are eating our lunch,” he said, insisting that an ageing infrastructure system is holding the nation back. “There’s no reason why it can’t be bipartisan again.”

The fate of the big infrastructure package, and all the taxes to pay for it, now rests with Congress. His bias, Biden has made clear repeatedly, is in favor of a big government like FDR’s. The country just can’t wait, he said again in Pittsburgh: “We have to move now, because I’m convinced that if we act now, in 50 years, people are going to look back and say this was the moment that America won the future.”

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