At the close of 1933, The New York Times published an open letter from the British economist John Maynard Keynes to President Franklin Roosevelt offering both high praise and a dire warning. In the first nine months of his presidency, Keynes argued, Roosevelt had proved himself a hero to all those around the world who believed in “rational change” through “the existing social system.” But Keynes saw danger ahead: Without a robust economic recovery, Roosevelt’s reform program would disintegrate, taking with it liberal dreams of reversing the global slide into authoritarianism.
Roosevelt didn’t always see eye-to-eye with Keynes, but he ultimately took the advice, ramping up spending on housing, relief payments and direct hiring to better complement his battles against monopolies and the titans of high finance. The recovery strengthened, and American democracy survived as Europe descended into fascism.
Keynes’s wisdom resonates today, though the precise contours of our economic dilemma differ. Like Roosevelt, President Biden entered office in a flood of crises. The pandemic was claiming thousands of American lives each day, vigilantes had just stormed the Capitol, and millions of people remained out of work amid soaring inequality. Each of these calamities threatens not only the political viability of Mr. Biden’s political party, but also the future of American democracy. The president recognizes the stakes, and has bet everything on his economic agenda.
Over the past few weeks, however, centrists in Mr. Biden’s own party have been chiseling away at his signature legislative proposal, the $3.5 trillion Build Back Better Act, to the point where the bill’s future is in jeopardy. It is not unheard-of for politicians to disagree with members of their own party, but the recent Democratic attacks on the plan have been remarkable for their incoherence.
The president’s critics have explained their opposition by invoking the supposed sanctity of arcane House procedure, telling constituents that their votes for or against certain parts of the plan are meaningless and issuing economic critiques that make no sense. Writing in The Wall Street Journal, Senator Joe Manchin of West Virginia upbraided Democratic leadership for running up the “crippling” national debt — even though Mr. Biden has said that the plan will include enough tax increases to make it budget neutral.
There’s a simple reason Mr. Biden’s centrist critics can’t seem to explain themselves. The Build Back Better Act is centrism taken seriously — an effort to fix American democracy through economic support rather than structural political change.
This is not to say Mr. Biden’s agenda lacks ambition. It seeks to refit the American economy as an engine of green growth, reassert American geopolitical leadership and support families who want to work. These are lofty aims, but they constitute a thoroughly centrist agenda. None of the left’s priorities from the 2020 presidential primary — Medicare for All, decriminalized border crossings, a tax on wealth — appear in Mr. Biden’s plan. Nor has the president embraced any of the structural reforms that progressive Democrats have been calling for, such as eliminating the Electoral College, reforming the filibuster or expanding the number of seats on the Supreme Court. Mr. Biden is offering recovery and reform in lieu of Senator Bernie Sanders of Vermont’s political revolution.
Mr. Manchin’s critique demands particular attention. In addition to his phantom debt fears, Mr. Manchin has accused his Democratic colleagues of using the bill to fan the flames of an “overheating” economy that he insists is already imposing “a costly ‘inflation tax’” on working families.
It’s true that prices have increased unexpectedly this year, and true again that policymakers should be taking reasonable precautions against further increases. But in attacking the Build Back Better plan, Mr. Manchin is working against his purported aims. The law is designed not only to support employment, but also to reduce inflationary pressure.
Anyone worried about inflation covertly “taxing” household income — an idea developed by Keynes, incidentally — should be looking for ways to reduce the cost of major items in family budgets. Americans pay far more for prescription drugs than people in many other developed nations, and a key plank of Mr. Biden’s program would allow Medicare to negotiate lower costs with pharmaceutical companies.
And yet last week, Democratic Representatives Kurt Schrader, Scott Peters and Kathleen Rice teamed up with Republicans to scuttle that plan. (House leadership can reintroduce the prescription drug overhaul later in the legislative process, but every Democratic senator will eventually have to approve the deal for it to be enacted.) In a letter explaining her vote, Ms. Rice claimed to have concerns about the “fiscal responsibility” of Build Back Better — but allowing Medicare to negotiate with drug companies reduces the government’s costs.
Other than a few temporary spikes in the price of used cars and travel, housing has been the single largest contributor to inflation this year. The $327 billion housing proposal that the House Financial Services Committee approved last week eases both the cause and the effect of rising rents by expanding the public and private housing stock and extending rent relief. Crucially, some centrists recognize the merits of that approach — Senator Mark Warner of Virginia is currently threatening to vote against Build Back Better because he wants to see more federal money devoted to housing support — but it may not survive the barrage of friendly fire from other quarters.
For most families, the heart of Mr. Biden’s bill will be a set of proposals designed to ease the financial pressures of raising children and managing the complications of old age. Child care is a huge budget item for American households. Married parents spend 10 percent of their budgets on child care, while single parents devote roughly a third of their budget to it. Build Back Better not only provides direct relief for those costs but also helps lower other prices across the board.
Inflation emerges when the demand for products outpaces their supply. And a key constraint on supply — particularly during the pandemic — is the availability of workers. Establishing a serious national policy for child care and elder care would help parents, particularly women, rejoin the work force and would prevent millions of new parents from dropping out of it.
But the paid family leave proposal drafted by Representative Richard Neal of Massachusetts, the centrist chairman of the House Ways and Means Committee, is an infuriating mess. Instead of a straightforward cash benefit, Mr. Neal envisions a nightmarish arrangement between private insurers, state regulators and federal agencies, all rigorously pushing paper to ensure that new parents don’t get too much money.
John Kenneth Galbraith, the great liberal economist, once referred to his hero Keynes as an avatar of “enlightened conservatism.” In Galbraith’s telling, Keynes so revered the institutions around him — the British Empire, the Bank of England, the opera — that he was willing to break with economic orthodoxy to defend them. Mr. Biden’s agenda does represent a break with the policy agenda of the past 30 years, just as Keynes’s and Roosevelt’s did nearly 90 years ago. But it ultimately demands very little from those in power. They need only act according to their own best interests, supporting a program that already conforms to their own ideological predilections. Trimming Mr. Biden’s agenda for the sake of trimming it is neither enlightened nor conservative — it’s just a waste of time and democracy.
Zachary D. Carter (@zachdcarter) is a writer in residence with the Omidyar Network and Hewlett Foundation. He is the author of “The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes.”
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