The Covid relief bill President Biden signed March 11 weighed in at almost $2 trillion. This week’s infrastructure bill also comes in at almost $2 trillion, and in a few weeks there will be a companion bill of the same magnitude. It’s all big and bold, and you can see it making a million possible messes, from the usual (How much ideological mischief is hidden in there?) to the existential (Don’t debt and deficits matter anymore? Isn’t inflation something to worry about?). But yes, the White House is in a New Deal state of mind, they’re rocking the Casbah, they feel they’ve got the wind at their back, and at this point they’re more or less right. But this is a whole lot of spending and taxing in the first hundred days. It’s a big political gamble.
The Infrastructure bill, according to the White House, will include $621 billion for infrastructure, $400 billion to increase care for the aging and disabled, $580 billion to boost manufacturing, and $300 billion for affordable housing. The public won’t dislike those goals. There’s a lot more shoved in there too. The plan to pay for it is to raise the tax on corporate profits (from 21% to 28%) and corporate foreign earnings. There will be individual tax increases also, to be announced in the coming bill, but the president repeated Wednesday what he’d said on the campaign trail: “I start with one rule: No one—I’ll say it again—no one making under $400,000 will see their federal taxes go up, period.” It’s unclear if that is individual or household income.
Since roughly 2000 we’ve been used to the federal government spending a lot and not worrying overmuch about it. But this White House’s approach is different. It’s not furtive and shaded, it’s formal and declared: Big money is about to be pumped into the economy and big money is about to be extracted, that’s how we roll. If it works it’s going to change a lot of assumptions in American politics. If it doesn’t, it will be a cautionary tale. That makes it a big gamble. In a small, tactical way you can imagine they’re thinking a big economic story will take the heat off the border crisis. But that wouldn’t be all they’re thinking.
There wasn’t much pushback against Covid relief—it was big and sloppy but we’re in a pandemic, let it go. Nobody will mind infrastructure either. We’ve been talking about our falling bridges, corroded tunnels and general civic ugliness for 25 years. If this bill actually turns out to be about building roads and tunnels and railways and undergirding bridges, people will like it. I will like it. If people can see it happening—if on the two or three days a week they commute into the city, big crews of human beings in safety vests and hardhats are out there building things—they’ll like it a lot.
Some part of my mind thinks it will be received as the first gesture of national self-respect in a long time, a visual counter to wokeness and critical race theory. We may hate our history, our ugly beginnings and our hypocrisy but apparently we still have enough confidence to build a soaring bridge we can use, and to make the highways look better. As if we still have some self-regard. But if the whole scheme begins to look like some dumb boondoggle featuring photo-ops with Democratic donors who own companies that make solar panels, people won’t like it.
Related to that, a question: About 15 years ago politicians began promising big infrastructure bills, and they’d say it’s all shovel-ready; give us the money and we’re good to go. Nothing happened. President Obama was big on infrastructure and included funding in the 2009 stimulus bill. Yet little came of it. In 2010 Mr. Obama admitted “there’s no such thing as shovel-ready projects.” It got all tied up in permits, red tape, public hearings, environmental challenges. I always wondered if Mr. Obama just failed to get environmental groups to bow to his will. Are we shovel-ready now? How did that happen? Will it all work this time?
I think there is considerable public openness and support for more spending, and believe this bill would be more supported if it were aimed at more-conservative ends—infrastructure plus things that will help our country become more culturally coherent.
I think there’s considerable tax-the-rich fervor among centrists and independents too, but I think when people imagine this they’re thinking billionaires on vast estates. Instead, it may come down to a couple with three kids in Westfield, N.J. Husband works full-time, wife part-time; together they bring in $500,000 a year. Pretty plush. But with federal, state and property taxes, sales taxes, mortgage payments, the kids’ braces, the babysitter, maybe private-school tuition, they don’t experience themselves as rich. During the Trump administration they lost the ability to deduct most state and local taxes from their federal taxable income. So they’d be feeling pretty clobbered if they’re targeted now for higher tax rates. They are also among the affluent suburbanites who joined the Democratic Party during the Trump years. A lot will depend on whether their congressman, in negotiations, can win back the state-and-local deduction, or at least part of it. That may have important political implications.
If there’s such a thing as cautious boldness, it would be a good attitude for the administration to adopt as it completes its first hundred days. It’s a heady thing to win a White House.
Why not see to what has to be seen to—the economy, Covid? There’s an immediate crisis at the border, and I suspect the only way out is something the president won’t do: Say he moved too quickly to improve the system, and warn in credible terms that if you come illegally we won’t let you in, we have a pandemic and unemployment and we can’t do that to our own citizens. So no, if you want to come to America you must do it the legal way.
If he can’t say something like that because his progressives will kill him, his progressives have gotten too powerful. It would probably do him some good to beat them back.
Beyond that there’s the long-term crisis with China, on which there’s no real American governing strategy because we haven’t yet defined the full contours of the challenge. We need a correct and unblinking definition of what China represents in this era—what it wants, what drives it, what its ultimate intentions are. We need a George Kennan-like Long Telegram on China, followed by a broad strategic decision.
“Every crisis is an opportunity!” But some crises are just crises, and the administration already has plenty. “We can only accomplish things in the first two years. We’ll get killed in the midterms!” Maybe, maybe not.
Sound stewardship means a lot at time like this. If they can improve the economy and the pandemic, stop the crisis at the border, negotiate a sound infrastructure bill, and seriously focus on China, that wouldn’t be a bad few years.
It would be a good few years. And people would notice.