In the space of less than three months, events have conspired to transform the American political scene. First, the COVID-19 pandemic defeated Donald Trump – not because public sentiment in this deeply polarized country changed, but rather because the virus forced open the gates of ballot access. Owing to a vast upsurge of early voting and mail-in ballots, the 2020 election’s turnout surpassed that of 2016 by 20 million votes, and featured a greater share of the electorate than any US presidential election since 1900.
Second, thanks to ten years of local organizing by voting-rights activists led by Stacey Abrams, Georgia replaced both of its Republican senators with Democrats in the January 5 runoff elections, thus handing narrow control of the US Senate to President Joe Biden’s Democratic Party.
Finally, Trump and some of his fellow Republicans incited a rabble to ransack the US Capitol. That catastrophic political miscalculation resulted in the death of five people (including a police officer), Trump’s second impeachment, and the lasting disgrace of the defeated president’s most aggressive would-be successors, Senators Josh Hawley of Missouri and Ted Cruz of Texas.
The moment was ripe for Biden to tell the country about his own economic plans. And when he spoke, it was with focus, precision, and a clear sense of the scale and range of action that the situation requires.
Biden has proposed a rescue plan that will advance a number of urgent objectives at once. His first priority is public health, a long-neglected issue that can be met in part by creating community vaccination centers and medical clinics, and by training and employing at least 100,000 new public-health workers in the basics of epidemic control. Essential elements of this plan will reach into low-income and minority communities, as well as into prisons and jails.
A second goal of the Biden plan is income support, which will take the form of extra cash for households below a certain threshold, extended and expanded unemployment insurance, emergency paid leave, grants to renters and small businesses, and tax credits for childcare costs.
Third, the Biden plan aims to stabilize federalism with some $350 billion in support for state and local governments whose tax bases have imploded. Such funding is urgently needed to keep teachers, firefighters, police, and other essential public servants on the job – as is the additional $20 billion that would go to keep public transit operating through the crisis.
Finally, the Biden plan has a fair-play element, proposing a long-overdue increase of the federal minimum wage to $15 per hour, which would raise wages for some 30% of all American workers.
Biden has correctly billed his plan an “American Rescue Plan,” rather than as a “recovery” or “stimulus” program. If successful, the package will stem the pandemic, stave off a variety of social calamities, and prevent the collapse of state and local government services. Economic reconstruction is important; but it is a separate objective that can be advanced in a second package. Biden has made sure to acknowledge this point: once the rescue plan has been implemented, the reconstruction can begin, with an emphasis on infrastructure, energy, and climate policy.
Among other things, this second phase can be used to put America’s advanced sectors back to work in the service of public purpose and social need.
This sequencing is crucial, because these sectors will not simply revive and return to their previous positions in the economy. Now that the pandemic has upended aerospace, commercial and retail construction, the energy sector, and much else, a wide array of skills and resources will need to be reallocated. A second-phase economic program can guide the way.
Most important, Biden’s plan made no mention of Wall Street shibboleths about budget deficits or the national debt. It does not propose merely temporary measures that will be reversed later, nor does it appeal to economic forecasts to cover a gap between the program’s outlays and results. Given the orthodox cast of Biden’s economic team, this is especially encouraging to see. Having committed to an ambitious agenda at the outset, it will be somewhat more difficult for his people to backslide later on.
Still, three things that are missing from the Biden package will need to be taken up in due course. First, neither the public-health programs nor the infrastructure, energy, and climate initiatives will provide enough jobs to offset the losses in America’s vast services sector. Following the inevitable decline of office and retail work and the disappearance of a wide range of in-person services that could not survive the pandemic, middle-class Americans have retreated into their suburban homes. It is already clear that, sooner or later, a guaranteed public or non-profit jobs program will need to be put on the table.
Second, in order to return to viability, many services and small businesses will need to move to new ownership and cost-sharing arrangements, which can best be achieved through cooperative structures with appropriate local oversight and financing. And similar arrangements will be needed to sustain the work of artists, actors, musicians, and writers. As in the New Deal, America’s creative people need (and deserve) support that the commercial economy will not be able to provide.
Lastly, once the immediate crisis has passed, emergency measures to defer rent, mortgages, health bills, and student loans will need to be submitted to a system that can write down, cancel, or settle unpayable debts in a fair and orderly fashion.
These later steps presuppose the earlier ones. But following a magnificent inauguration, we are already seeing the first rays of coherent, qualified, dedicated, and serious leadership. Biden is certainly capable of meeting the emergency at hand, and he has already seized the moment. The country now must demand that Congress approve his program immediately.
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