“Cradle-to grave” is a derisive description applied by conservatives to the President’s $4 trillion plan to enact government programs ranging from pre-school, through college, on to lifetime medical care, including elderly care at home and more. Down goes the drive to improve one’s condition by risk-taking, hard work and thrift, up go taxes and dependence on government bureaucrats.
Things have changed. The New York Times, house organ for the progressive wing of the Democratic Party, now gleefully modifies the “cradle-to-grave” label to the more inclusive “conception-to-grave.” Down go poverty and inequality in the face of a “reweaving of a social safety net frayed by decades” of neglect. All in a triumphant page-one story.
All the sort of inter-party jousting to which we are accustomed. When it comes to paying for these benefits, if that is what they are, the battle becomes intra-party, a handful of Democratic moderates vs. Democratic progressives. The President, his election safely secured and almost certainly his last hurrah, has moved into the progressive camp alongside its long-time stalwart, Bernie Sanders.
With an evenly divided senate, Biden needs all 50 Democratic senators to stay with him, and create the tie that vice president Kamala Harris will break in favor of his American revolution. In the 435-seat House, Dems have a mere 8-seat advantage. Hardly electoral mandates calling for radical change. But they firmly believe their support in the country is broader than their congressional situation reflects, and that recent hits to the President’s popularity from the botched retreat from Afghanistan and the resurgence of Covid will be forgotten when voters troop to their mailboxes next year.
There are two roadblocks on the path to the promised (by progressives) land. Biden does not have the votes to pass what is called his $3.5 trillion “human infrastructure,” conception-to-grave package in the senate, and if he does succeed in getting it passed, he has yet to get his fractious supporters to agree how to pay for it. House Democrats agree they want to wring more out of the rich and America’s corporations, especially from corporations doing business overseas. But they cannot agree on specific measures to achieve that added revenue, or how much they are willing to borrow to fund the progressives’ agenda.
Biden managed to persuade enough Republicans to support the smaller infrastructure package by promising it would not be held hostage to progressives’ demand that the larger $3.5 trillion expansion of FDR’s New Deal and LBJ’s Great Society also receive senate approval. His promises, it seems, are not binding on House speaker Nancy Pelosi, who is doing just what Biden promised not to do. And for good measure is tossing in a provision that would allow the richest residents of Democratic states to deduct their state tax payments from their federal income tax obligations without limit. Even though Biden’s father told him that it was the middle class, not the rich, who built this country.
Standing in the path of Biden’s ability to round up a senate majority are Arizona Democrat Kyrsten Sinema and West Virginia Democrat Joe Manchin. Manchin, a modern-day Horatio at the Bridge, is the principal and voluble barrier standing between the progressives and what he sees as their ruinously expensive program. He comes from a coal state that Trump won by 39 points. Its average household income of about $47,000 is almost one-third below both the US average and the income in Sanders’ home state of Vermont. He thinks it is a better idea to means-test programs than to send monthly $300 per child checks to families with annual household incomes of $150,000. Means testing, of course, has long been anathema to socialists such as Sanders, who see payments to the middle class as the bribes that induce it to continue supporting expensive welfare programs.
Even if a majority could be mustered for passage, there is the not-so-small matter of “pay fors.” Biden and Sanders have proposed a galaxy of new taxes. They would likely make America’s corporations the most highly taxed among the industrial nations, and increase taxes, as Sanders puts it, on space travelling billionaires “increasingly unconcerned about what happens here on earth because they’re off in outer space.” Democrats cannot agree specifically how to pluck the goose to obtain the largest pile of feathers with the smallest amount of hissing.
Nor have they been candid about the amount of feathers they will need. Their $3.5 trillion cost estimate for moving America in the direction of European social democracies is artificially low, the sort of thing that would bring the SEC down on the head of any CEO who practiced the art of deception so blatantly. It assumes that many benefits will be allowed to expire half-way through the 10-year budget period, which they won’t, barring a new breed of politician eligible for a new version of Profiles in Courage. As Milton Friedman famously pointed out, “Nothing is so permanent as a temporary government program.”
Sanders knows this full well, “Virtually every major program that we wanted remains intact,” he assures his progressive allies, even though “they are not going to be funded, initially, for as long as we would like.” When “initially” expires in a few years, Bernie, whose favorite number is “more”, as Stephen Sondheim put it in another context, will have his $6 trillion program.
Reasonable people agree on three things: the bipartisan bill already passed by the senate, calling for refurbishing the physical infrastructure, is a good idea; the social safety net needs reweaving and expansion; and the cost should be borne to the greatest extent possible by the better-off. After all, they have benefited from the recent Federal-Reserve-induced run-up in asset values. And the high level of inequality, regarded even by many of the “rich” as unfair, threatens popular support for and the sustainability of the market system.
Whether Manchin has it right will become clearer as the debate progresses. That the Sanders-Biden plan is over-reach seems clear, especially at a time when treasury secretary Janet Yellen is claiming that next month she will be out of cash with which to pay interest on the nation’s debt. The infrastructure bill, the smaller of the two, would pile between $256 billion and $400 billion onto the national debt pile over ten years, adding to inflation and upward pressure on interest rates. The tax burden would undoubtedly reduce the size and number of the golden eggs produced by the plucked capitalist geese: the White House is predicting economic growth averaging less than 1.8 per cent starting in 2024.
White House Chief of Staff Ron Klain believes Manchin is “very persuadable”. And Manchin has left himself wriggle room by saying he supports a mere $1,500,000,000,000 in spending “without greater clarity about why congress chooses to ignore the serious effects inflation and debt have on existing government programs.”
West Virginia has the sixth highest poverty rate in the nation. Horatio’s heroism at the bridge would be as nothing compared with a decision by Manchin to surrender baubles for his state to maintain his position that the spending splurge by Biden and Sanders, two men in a hurry, feeling the urgency of now, as Martin King once put it, is not in the national interest. That would represent a victory for principle. In Washington.