David Dayen reports on the new president, policy and all things political
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March 8, 2021
Something Fundamentally Changed—For Now
Our government is finally willing to fight a crisis at the scale of the problem. But they’ve yet to prove a desire to do it permanently
President Biden takes questions after Senate passage of the American Rescue Plan. (Alex Brandon/AP Photo)
The Chief
When we last left things, there was some breaking news on the unemployment bits in the American Rescue Plan. Directly after publication, we had an impasse, one of the longest Senate votes in history, a refusal and finally an agreement from Joe Manchin, and a compromise of the compromise that amounted to three less weeks of extended unemployment.

It was a lot.

Things progressed smoothly after that, however, and tomorrow the House of Representatives will give final passage to a $1.9 trillion package that, with the exception of the loss of the $15 an hour minimum wage provision, maintains all the basic contours of the plan then-president-elect Biden laid out in January. It even added an important measure to save the retirement benefits of more than a million unionized workers in multiemployer plans; that was not in the initial Biden package.

I said last week that journalists are trained to focus on what’s new and what’s changed in a developing story rather than taking a step back. But I’m actually seeing a lot of stories that actually try to connect with the achievement of the American Rescue Plan. And it does represent a new way forward in American politics; but only if we can keep it.

An eligible family of four—which includes virtually the entire middle class, and 86 percent of the country overall—will receive $7,600 in additional payments beyond current law, $8,800 if their children are both under 6. And another $4,000, instead of coming bundled with tax refunds at the end of the year through the Child Tax Credit, will be a monthly payment.

The balance sheets of sectors of American life that truly struggled in the pandemic, particularly mass transit and child care, are being restored, wiping out the self-fulfilling cycle of austerity and decline. That goes too for state and local governments, who are made whole for the combination of revenue erosion and significantly expanded pandemic costs. Poor schools might finally be able to upgrade facilities with a share of the $130 billion intended to speed reopening.

While it adheres to the health care solutions in the Affordable Care Act, you might say that this bill puts “affordable” back into the equation, by significantly increasing the subsidies available to families on the insurance exchanges. (It also incentivizes holdout states to expand Medicaid, though I doubt that will work.) While there was a colorable argument that the IRS could do this anyway, it clears away taxation for student loan forgiveness, removing an objection to President Biden canceling that debt.

Unlike the CARES Act, all of this aid targets the lower- and middle-income ends of the scale. Small businesses got more in prior bills but they share in some of the bounty here. Most important, it brought aid at the scale of the problem, within the time frame of the problem, and with government firmly at the helm of the solution. And it was massively popular.

My first emotion, paradoxically, was anger. Not at the painful defeats and chinks in the armor of the bill. It was anger that we haven’t been operating this way for the past 40 years, meeting crises—many of them enduring crises—with government-backed solutions, not market nudges or tax-advantaged savings accounts. We didn’t respond to the global financial crisis this way, or the crisis of child poverty, or homelessness, or the uninsured, or really any domestic challenge. And we could have. The political system was not impervious to its allure. It was a choice.

And while this change really is fundamental—deficit hawks really have been cast out of the temple, free-market solutions left on the shelf—it’s also fragile. We have the outline of a child allowance but it expires in a year. The ACA subsidies expire in two years. The massive expansion of unemployment eligibility for a much wider group of workers is now done on Labor Day weekend. There’s a modicum of ongoing public investment, but mostly this returns us to a steady state, with decisions to make from there. Those decisions will be carried out in a booming economy with low unemployment, where desperation and precarity will still be present, but in the shadows where it’s toiled for decades.

We could make all of that permanent, with automatic stabilizers that kick in during downturns, and Federal Reserve bank accounts for every American to fill when needed. We could ensure that federal support sustaining critical features of public life remains in place. We could choose to not build a pop-up safety net but an ongoing one.

There’s a theory out there that, once you give families $300 per month per child for a year, once you make everyone on the exchanges eligible for subsidies, that Congress won’t be able to take that away. I’m not so certain. Members have the logic of emergency behind them, that they could step in when needed but that it’s “appropriate” to step back thereafter. The pandemic changed some thinking about the importance of government action, but there’s no guarantee that will hold beyond a crisis moment. It will require continued vigilance.

The good news is that Americans like this new era. They think it made more sense to make progress than to seek bipartisanship. Republicans ran to the safety of criticizing the cancellation of Dr. Seuss rather than try to combat this. People will get their checks and see the economy roar back in short order, in tandem with vaccinations that appear to emerge from a government authority. And maybe they’ll think that we don’t have to only roll out this kind of policy firepower during a pandemic. We can tackle the crises that happen every day.

The first signs don’t necessarily point in that direction. The second reconciliation bill is earmarked for an infrastructure package, and Joe Manchin is saying he won’t do it without bipartisanship and deficit neutrality, because if there’s one thing that Republicans like more than government funding of green energy, it’s large tax increases on corporations and the wealthy. (It is very good news that Manchin is broaching the subject of a talking filibuster, however.)

There’s a timeline where the current activist approach to fiscal policy subsides, and the temporary advances recede, and Washington stops talking about those left behind.

There is no “end” to this struggle. It goes on, from the fight for a living wage to making critical safety net measures permanent to ensuring full employment. There are no “fundamental” changes, really, until they are embedded into the fabric of American life. We have an opportunity, but an uncertain one.

What Day of Biden’s Presidency Is It?
Day 48.
Today I Learned
  • Pressure on Biden to kill the filibuster might be misplaced; Dianne Feinstein and others of her ilk are the obstacle. (Washington Post)
  • Why the government rental assistance plan is failing. The Biden team will have to tackle implementation. (The Intercept)
  • Getting the vaccine to independent pharmacies, who have proven their mettle in places like West Virginia, should also be a priority. (Bloomberg)
  • Biden’s voting rights executive order was a Trump throwback, it ordered some reports and asked agencies to do what they can. Not much there. (Axios)
  • Has Biden returned to the foreign policy blob? (Daily Beast)
  • Shalanda Young’s boosters for OMB are getting too far out ahead of themselves. (Washington Post)
  • The COVID baby bust actually means we’ll need more automation 30 years out. (Wall Street Journal)
  • Biden’s FDA is tackling the presence of heavy metals in baby food. (Politico)

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