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Biden's economic legacy at stake with next package taking shape

Christopher Condon and Erik Wasson, Bloomberg News on

Published in Political News

The next phase of President Joe Biden’s legislative agenda is fast taking shape, with an economic-recovery package that will potentially far surpass his $1.9 trillion virus-relief plan in size, complexity and overall ambition.

The White House and congressional Democrats are busy plotting strategy for the proposal, which could be unveiled next month, kicking off a legislative process that may culminate by August.

The centerpiece will be possibly the biggest infrastructure-spending commitment since the New Deal — including roads, bridges and rural broadband internet. Progressives are eyeing much more, such as an expansion of Obamacare and a public-sector jobs program, along with tax measures including an increase in the capital-gains levy.

But stuffing it with too many controversial proposals could threaten its approval or force it to be broken up, and put in peril the Democrats’ thin majorities in the 2022 midterm elections. Still, Democrats see a narrow opening to forge Biden’s legacy: not just restoring the U.S. economy to its pre-pandemic state, but reversing the trend of sluggish growth in recent years with the most far-reaching measures in decades.

Biden’s virus-relief package is “going to help us get us back on the growth pattern we were on before,” said Virginia Representative Don Beyer, who, as incoming chair of the Joint Economic Committee, is a leading Democratic macroeconomic-policy voice. “The genius of the second plan is that it gives us the opportunity to punch GDP up above the long-term trend,” he said in an interview.

During his campaign, Biden proposed $2 trillion for economic rebuilding, a step up from the $1.5 trillion level proposed in the House last year, which Democrats are now calling a “floor.”

 

China Card

Biden is aiming to succeed where Donald Trump and other predecessors have failed, when funding disputes stymied measures that economists say are vital to boosting long-term productivity. The president is selling the package as a way to counter China, which has deployed public investment not only to boost its own growth but to build global influence as well.

As challenging as it may be to enact, such arguments may make the core infrastructure piece likely to be the easiest component to get through Congress.

Bipartisan support for improved highway, transit, waterway and flood-mitigation work is strong, while deficit concerns are at the lowest level in decades. There’s also a Sept. 30 deadline in Congress for reauthorizing surface-transportation funding — offering a ready-made vehicle for pursuing infrastructure measures.

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