President Biden and his team have entered a phase on their economic agenda dictated by the political realities of a tightly divided Congress, “do more with less.”
The American Jobs Plan that Mr. Biden unveiled in March included $ 330 billion in new spending, of which the government promised to replace every lead drinking line in America, connect every home to high-speed internet, and 500,000 charging points for electric cars and trucks to build.
The compromise deal Mr Biden made with center senators last month would still achieve all of those goals, White House officials insist – despite spending only about 40 percent of what Mr Biden originally proposed on broadband, electric vehicles and water infrastructure .
Biden advisors say they have found creative ways to stretch the federal dollars, often using private investment, to sustain the president’s key goals for his economic program. As a result, however, they have had to discard other goals, and Mr Biden is now racing towards another round of potentially more difficult compromises, this time forced by moderates in his own party over the second half of his agenda known as the American Families, planning.
In a speech on Wednesday, Mr Biden gave no indication that he would scale back his ambitions.
“It’s time we think bigger and act braver,” said Mr. Biden at a community college in suburban Chicago, his last stop on a tour to raise support for his agenda.
Using blanket rhetoric, the president compared his ambitions to those of former President Ronald Reagan, who presided over an economic boom during his eight-year term in office.
In 1984, Mr. Biden said, “Ronald Reagan told us it was an American tomorrow,” said Mr. Biden, referring to Mr. Reagan’s re-election advertising campaign which boasted that it was “Tomorrow in America” because of his politics.
“This is going to be an American century,” said Biden.
But first there must be compromises. The upcoming negotiations will challenge Mr. Biden’s far-reaching vision to clean up the American economy with new and costly government intervention to stimulate advanced industries and to train and support the workers of the future. His goal over the coming weeks will be to cram as much of this agenda as possible into two bills that are unlikely to be spending as much as he would like, with his economic legacy hitting the decisions he and the congressional leaders make .
Government officials say Mr. Biden will continue to prioritize major and unifying national goals, including expanding an expanded tax credit for parents, creating the U.S.’s first state-funded paid vacation program for workers, and a state guarantee for four additional years of public education through preschool and school Community College.
“The President is fully committed to fulfilling the ambitions of the Employment Plan and the Family Plan,” said Brian Deese, director of the White House National Economic Council, in an interview in which he described the bipartisan infrastructure deal as “a historic investment. “
“But,” added Mr Deese, “I think the President has made it clear that he understands the nature of the legislative process – that he understands that in the end no one will get everything they want.”
In order to reach a consensus limit of $ 579 billion with a group of Senators that included five Republicans, Biden agreed to drop entire elements of the first half of his agenda, the establishment plan, including housing and home health care. He also lost about a third of his planned spending in areas like roads, bridges, and broadband.
Some of those dropped points could reappear in a second economic package that Mr Biden is negotiating: a plan to bring as much of the president’s remaining $ 4 trillion agenda together into one bill that was passed entirely with democratic votes. In addition to housing and health care, this bill could include Mr Biden’s proposals for childcare, education and poverty, as well as some additional efforts to reduce the emissions that cause climate change.
But not all of the trimmed money will end up on this bill.
Mr Biden has promised Senate negotiators that he will not push additional spending in party law in certain areas such as broadband and plumbing that were addressed in the bipartisan agreement. The centrist Democrats in the Senate, including Joe Manchin III. of West Virginia and Jon Tester of Montana, are likely to approve only some of Mr. Biden’s proposed spending programs in the Partisan Act, in large part because they oppose parts of Mr. Biden’s plans to tax corporations and high earners to offset the cost of new expenses.
Mr Biden has repeatedly said that he had to make tough decisions regarding physical infrastructure and settle for a deal that fell far short of his ambitions. But he has also called the bipartisan deal the largest increase in infrastructure spending in the country since President Dwight D. Eisenhower created the interstate highway system, claiming it would create “millions” of new jobs – with no White House estimates to back this up – and that it would accomplish many of the same goals as its far more expensive original plan.
In some cases, Mr Biden has curtailed his ambitions to focus on the highest priorities on his agenda – like removing lead pipes that are poisoning children and stifling their academic development. Administrative officials say the bipartisan deal will allow them to work off far less of the country’s road maintenance backlog than Mr Biden’s plan should have done. The government also agreed to raise funds for efforts to support colored communities disrupted by past infrastructure efforts, such as black neighborhoods in New Orleans and Syracuse, from $ 20 billion in Mr. Biden’s plan to $ 1 billion in the bipartisan plan Reduce law.
In other areas, the White House revised its entire funding approach to meet its goals.
The American Jobs Plan would have spent $ 174 billion to help the United States support a rapid acceleration in the production and use of electric vehicles, including the 500,000 charging stations that have been a popular talking point for Biden since the presidential campaign.
The bipartisan deal includes less than a tenth of EV spending, which many Republicans believe does not fit the traditional definition of infrastructure. White House officials say the agreement on federal grants to build charging stations across the country includes $ 7.5 billion, and an additional $ 7.5 billion in a new financial instrument that uses loans and public-private partnerships Support generated by charging stations.
Some liberal groups have blown the switch. In a joint statement, Varshini Prakash, executive director of the Sunrise Movement, and Alexandra Rojas, executive director of Justice Democrats said Mr. Biden’s establishment plan was “already based on Biden’s compromise with progressive Democrats after the 2020 primaries”.
“We cannot afford to water down the guidelines any further,” they added.
The compromise plan similarly reduces Mr Biden’s proposed broadband funding from $ 100 billion to $ 65 billion. Aides say that will still be enough to bring high-speed internet to every home in the country, citing estimates from the Federal Communications Commission and the Federal Reserve Bank of Richmond, though they acknowledge the effort could take longer than in Mr. Bidens. awaits Original plan.
Some outside experts say the money won’t be enough to reach the most difficult-to-wired homes in the country. “It won’t bridge the digital divide on its own,” said Adie Tomer, Brookings Metropolitan Policy Program fellow, who leads the Metropolitan Infrastructure Initiative.
It may be more difficult for Mr. Biden to wrest the effectiveness of his family plan, which includes $ 1.8 trillion in spending and tax cuts that focus on what administrators refer to as “human infrastructure.” The plan includes a federal grant for employees to take paid vacation to care for themselves or a family member, a universal pre-kindergarten for 3- and 4-year-olds, two free years at the community college and the extension of an extended tax break for parents, i.e. aims to fight child poverty.
If Mr Biden is forced to cut those spending to appease the democratic centrists, he will face difficult choices. It could eliminate certain efforts altogether or reduce their reach – for example, by guaranteeing free pre-kindergarten only to children from low- and middle-income families.
He could also go down a time-honored path in Washington when it comes to the tax credits in his plan, including child poverty efforts: Mr Biden’s legislation could only create or extend those credits for a year or two and then expect a future in Congress to make them permanent.