Promises
Joe Biden won the Presidency by campaigning for a list of issues. One of the biggest complaints about Biden’s Administration is that, so far, he hasn’t “come through” on his promises. There’s lots of reasons: narrow margins in Congress, ongoing Covid pandemic, Covid and international economic dislocations, the machinations of a rabidly conservative Supreme Court. But Biden fell prey to a politician’s greatest weakness. He made promises he couldn’t keep.
Of course, that’s not completely fair. Biden kept his promises about Covid recovery. In one of his first acts, he managed to squeak a final Covid relief bill through. It cost $1.9 trillion and every single Republican voting against it. And he also came through on every legislator’s favorite – infrastructure. Even some Republicans jumped onboard the infrastructure bill, worth $1 trillion for improvements throughout the United States.
The List
Check off Covid relief and infrastructure. So what other issues are on the list?
Voting rights are perhaps the most important, and the biggest Biden Administration failure (so far). Two companion voting rights acts passed the House of Representatives. Those bills would undo much of the Republican retrogressive restrictions passed in the states. A full fifty Democrat (plus the Vice President) majority in the Senate were in favor of passage of part of those bills. But there were two Democrats who refused to “break the filibuster” to get them done.
In the end voting rights were a “big fail”. Not only will many Americans not be able to vote because of that failure. But on a practical political level, many of the Americans left out would vote Democrat.
The other issue on the list that so far has been missing in action is student debt relief. Forty-three million Americans own $1.6 trillion in student debt. The weight of that debt holds back the economy, with thirty-somethings making loan payments instead of mortgage payments. And while there’s plenty of argument; “they had their eyes open when they signed for those loans in the first place”, it is generally agreed that student loans were made at near predatory rates, without regard for any future ability to repay. There has been some forgiveness for the most egregious “for profit” universities. And the promise of loan forgiveness for community service is finally being fulfilled. But for the vast majority of debt holders, there’s still the monthly payments to Sofi, Mohela, Great Lakes, or the other servicers.
Build-Back-Better
And until yesterday there seemed little hope for lowering drug prices, raising taxes on corporations, improving the environment, reducing the national debt, or reducing other costs in health care. All of those ideas were popular, and part of Biden’s big plan, “Build-Back-Better”. But they also fell to the filibuster and two Democrats unwilling to change that “tradition”.
There have been ongoing negotiations between one of the two Democratic roadblocks, Senator Manchin of West Virginia, and the Senate Majority Leader Chuck Schumer. But a couple of weeks ago, it seemed that Manchin walked away, dooming any further advancement of the Biden agenda in 2022.
Meanwhile, there was a bipartisan bill called the “Chips Act”, that would increase incentives for corporations to build computer chips (and other electronics) in the United States. This came about after Covid, when China shutdown production of computer chips, and the US found there were no alternative sources. It wasn’t only economically inconvenient, but was a national security issue. The United States needs to have domestic sources for computer chips.
Surprise Deal
Minority Leader McConnell threatened to filibuster the Chips Act if Schumer put forward any part of “Build-Back-Better” as a “budget reconciliation” bill that could not be filibustered. But with the failure of the Manchin negotiations, that point was moot. So yesterday the Senate passed the Chips Act. Seventeen Republicans joining almost all of the Democrats (Bernie Sanders was opposed).
Then the big surprise – Manchin and Schumer reached an agreement on a “baby Build-Back-Better”.
Instead of the $2 trillion cost of original Build-Back-Better, it actually raises revenue by over $300 billion. It does that through a 15% corporate minimum tax, closing interest loopholes, increasing IRS enforcement, and most importantly, allowing the Government to negotiate Medicare drug prices (like every insurance company does). It reduces the government deficit by $300 billion, even after it pays for the other provisions.
And what gets done? It extends the Affordable Care Act subsidies through 2024. And it budgets $370 billion towards energy infrastructure and climate, with a $4000 tax credit for low and middle income individuals to buy electric cars. And there’s tax credits for energy saving home improvements, and $60 billion for clean energy incentives to corporations.
Chips and More
Is it everything Biden wanted in Build-Back-Better? Of course it’s not. But it does start to check the boxes. It lowers health care costs, addresses environmental concerns, and gets corporations (like Amazon that paid $0 income tax) to pay their fair share of taxes. And it will pass through budget reconciliation. There’s no opportunity for a Republican filibuster.
And since the Chips Act is already passed in the Senate, McConnell can’t hold it hostage.
It was just lucky happenstance that Manchin and Schumer reached their agreement, hours after the Chips Act was passed. I’m sure everyone was acting (performing?) in good faith when Manchin walked away from negotiations.
Nothing is final. Senator Sinema of Arizona still will have her say. And Republican Senators are now calling of Republican House Members to vote against the Chips Act. Of course, Democrats have a clear majority there, and there is no filibustering in the House. So, if everything holds together, “…the good Lord willing and the river don’t rise”, Biden will get to sign the Chips Act, and the “Inflation Reduction Act”, baby Build-Back-Better.
Computer chips, health care costs, corporate taxation, climate change, even government deficit: Biden will get to check a whole lot of boxes.
It couldn’t happen at a better time.
