A pretty penny: Cost of Biden infrastructure plan may not matter
Biden announced on Wednesday that his $2 trillion-plus infrastructure plan, if passed as proposed, will be offset by increased corporate taxes. Republicans, fans of lower taxes, have lashed out at that and on the potential the plan has to add to the country’s national debt, which stands at $28 trillion and counting.
When asked on Wednesday if he would consider supporting the proposal, Senate Minority Leader Mitch McConnell told reporters in Kentucky, “If it’s going to have massive tax increases and trillions more added to the national debt, it’s not likely.”
The problem for McConnell and his fellow Republicans is that, unlike other periods in recent history, Americans’ current reaction to the national debt part of his argument is a collective yawn.
Debt as a political issue
It was not long ago that Americans were extremely concerned about the national debt.
Bashing reckless government spending is a political staple, but it is usually only in times of economic downturn when Americans demand their elected officials address the federal debt, which has been consistently growing for the past century.
In 1992, during a recession, independent presidential candidate Ross Perot made the national debt the keystone of his campaign, forcing both President George HW Bush and then-Democratic candidate Bill Clinton to address the issue. After Perot pulled in 19 percent of the vote, the debt was cemented as a priority and Clinton, by his second term in office, wound up balancing the federal budget, even though he did not reduce the overall national debt.
Barack Obama, just before taking office during the Great Recession in 2009, told The Washington Post that he would hold a “fiscal responsibility summit” after he was sworn in to help figure out how to rein in government spending on entitlements such as Social Security and Medicare. And when Donald Trump was running for president in 2016, he promised to eliminate the then-$19 trillion debt “over a period of eight years”.
Trump was undoubtedly speaking to his Republican base, which at the time still included many followers of the Tea Party movement and its strict anti-national debt philosophy. That movement sprouted during Obama’s first year in office and successfully removed many Democrats from Congress by railing against government spending.
Yet, despite all of that, the national debt skyrocketed under both of those presidents, growing $9 trillion under Obama and an additional $8 trillion under Trump.
Debt worries decrease among Americans
Over that time, the Tea Party’s influence waned and Americans’ concerns over the national debt have dropped, despite some conservatives’ and economists’ worries about the long-term implications of a deeply indebted United States government.
In 2010, just after the height of the Great Recession, Americans ranked the federal debt as the top threat to the “wellbeing” of the US, tied with terrorism, according to a Gallup poll.
Ten years later, according to a Pew Research poll conducted last June, 47 percent of Americans called the federal budget deficit – which adds to the overall national debt – “a very big problem”, down from 55 percent in September 2018. This decrease came even as the Trump administration and Congress ramped up spending on coronavirus relief, including a $2 trillion bill that included direct payments to Americans.
With Biden fresh off signing a $1.9 trillion COVID relief bill and now embarking on $2 trillion more in spending – with potentially another $2 trillion to be proposed in a few weeks – he finds himself in a different political environment than did Obama in 2009 and George HW Bush in 1992.
Biden and his fellow Democrats have taken control of the White House and Congress for the first time since Obama signed his recession stimulus in 2009.
Unlike 2009, when Americans blamed the government, big banks and the wealthy for their economic problems, this time around, many Americans are looking to the government to help relieve the economic crisis brought about by a once-in-a-century pandemic.
Because of that, Biden finds himself with arguably much more political capital than any president since George W Bush after the September 11, 2001, attacks, another moment in US history when an outside force turned to the federal government for answers.
Amid positive approval ratings, overwhelming support among Americans for his COVID relief bill and now what is shaping up to be significant support for an infrastructure proposal partially paid for by tax increases, Biden is riding a wave of positive sentiment, one that someone with his decades of political experience knows can be fleeting. That is why Biden is pushing for more while he can.
“We’ve been here before. When this nation hit the Great Recession that Barack and I inherited in 2009, I was asked to lead the effort on the economic recovery act to get it passed,” Biden said in February. “But it wasn’t enough. It wasn’t quite big enough. It stemmed the crisis, but the recovery could have been faster and even bigger.”
Biden and the Democrats are banking on all of this stimulus actually stimulating the economy, boosting Americans’ fortunes and, in turn, Democrats’ electoral fortunes as well. If their strategy works, the Republican outcry over the national debt will likely continue to fall on deaf ears.
Then again, if all of this government spending results in continued economic problems, especially for middle- and working-class Americans, perhaps the national debt argument, as it did in 1992 and 2010, will become a potent political issue once again.