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  • Will Allen

President Biden's Economic Agenda Watered Down by Conservative Democrats


President Joe Biden pictured here promoting his Build Back Better agenda in New Jersey in October 2021.

After a painstaking process of revision, the reconciliation negotiations have materialised into a legislative framework, albeit a far weaker one than originally planned. Taking this bill forward, Democrats appear willing to spend too little and risk disaster at the midterms. Specifically, if this framework can pass a party line vote, it represents what could be the Democrats last domestic policy pitch to the voters it hopes to win before the 2022 midterms. Is it what the voters want?

Democrats for once seemed to have learned from the extensive list of mistakes they made in government in the two years before the 2010 and 2014 midterms. They legislated through reconciliation avoiding obstructionist Republicans, and this time around sold it to voters, doing away with the behavioural economics employed during Obama’s Presidency.

Reconciliation allows Congress to pass tax and spending proposals without incurring the 60-vote threshold of a Senate filibuster. Useful for any party trying to enact legislation, but especially Democrats who have razor thin majorities in both chambers - control of the Senate relies on the Vice President to cast a tie breaking vote.

With the first $1.9 trillion reconciliation deal complete by early March, Democrats scored early wins: adding jobs, cutting child poverty to record lows and targeting the working poor and middle class voters they want to win back. On a broader level Democrats proved that deep investment delivers tangible benefits, beginning the realignment of voter’s mistrust of big structural plans.

After early success Democrats announced they were going bigger, far bigger. Promising $1.9 trillion was just the start of their legislative action and in July Biden announced his $3.5 trillion budget that would fulfil the Democratic agenda. This coupled with ongoing negotiations on infrastructure legislation, Biden’s domestic legislation looked like it might deliver reforms not seen since the 1960’s ‘Great Society’.

Since then, Democrats have watched the second round of reconciliation descend into intraparty warfare. Progressives and moderates (more aptly labelled conservatives) have acrimoniously split. For months Biden failed to reconcile the two factions in stop-start negotiations. The process became so maligned Senator Joe Manchin was reportedly readying an exit from the Democratic party altogether.

In recent weeks negotiations resumed where Biden’s proposals have been gutted and cut to pieces in brutal fashion by conservative Democrats unhappy with the cost. The topline $3.5 trillion price tag has endured cuts to $2 trillion and then revisions down to a meagre $1.75 trillion. (It’s worth noting, progressives like Bernie Sanders initially proposed $6 trillion in spending, compromising to $3.5 trillion.)

With such an act conservative Democrats are betting the party can convince voters that half measures on investment will suffice. However, conservatives remain trapped in an ideology that suggests limited legislation makes for more attractive legislation, when in fact it makes for worse legislation. This was true for numerous Obama era policies like ‘Obamacare’, which was paired back by conservative Democrats meaning much of the healthcare bill failed to substantially solve healthcare for voters. Now history appears to be repeating itself with this budget framework.

Cuts to the reconciliation framework have made much of the policy weak, unrecognisable, and ineffective. It omits proposals Democrats have championed for years. Paid family/medical leave (including maternity leave) was implemented at $3.5 trillion, then struck out in the $1.75 trillion framework by Joe Manchin. Leaving the US as one of six countries that fail to guarantee national paid leave. Secondly, lowering prescription drug pricing has been gutted by Democrat Kyrsten Sinema, which is perplexing considering she and countless other Democrats ran on exactly that policy.

Environmental proposals within the budget have been largely omitted thanks to Manchin who has vast holdings in energy companies. A bipartisan infrastructure deal, struck prior to reconciliation, gutted all Biden’s infrastructure spending tied to climate change, drawing the ire of progressives and making reconciliation the last hope for expansive climate proposals. The signature ‘Clean Electricity Performance Program’ which would dramatically shift utility companies (that Manchin has ties with) to renewables was dead on arrival, sowing further mistrust to the progressive/conservative relationship.

If certain policy’s weren't completely left out in the downward revisions of the topline price tag, they were ineffectively placed on the policy chopping block where billions were cut. The popular ‘Child Tax credit’ program that was to be made permanent through the decade at $556bn, and now survives for just a year on $200bn. Family proposals saw aggressive cuts turning trillions of investments to just $750 billion and housing sees its funding cut by roughly half. As a result, much of what was initially proposed as decade long spending will simply expire in the next year or two. This means Americans won’t get the chance to see that these programs work and in turn Democrats won’t get much credit from voters. Especially the voters they have lost in recent years, which the benefits of this budget are overwhelmingly directed towards.

Further peril lies ahead in the legislative pipeline. The reconciliation framework is part of a two-step legislative advance. The $550bn infrastructure bill vote in the House has been placed on ice after progressives refused to back it until they secure a deal on reconciliation. The two bills are the other's life support; both are yet to pass. If the reconciliation framework fails in any chamber, progressives have the potential to kill the infrastructure bill. In this situation Democrats will be left with two scuppered bills and a ticking clock to the midterms.

If passed, this framework would still see substantially more spending than that of recent history, but the question is, is it enough? It doesn’t look like it is. A mixed reception to any final policy pitch from Democratic voters won’t cut it at the midterms for the party. They are notoriously bad at turning out for midterm elections. A domestic policy victory would help to draw attention away from a calamitous summer of errors and shore up America’s fragile economy. Going big and decisively fulfilling promises would also signal to voters Democrats act with impetus to protect those who for so long have been left behind – this framework half-heartedly tries to prove this true. Yet, temporary half-hearted proposals still don’t fully close the door on a return to the belief that the populism of Trump at the head of the Republican party can fix America.

Image - Flickr (Phil Murphy)



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