Path from Clinton to Biden takes U-turn on debt, trade, assistance

WASHINGTON — When Bill Clinton spoke of how to build a bridge to the 21st century, it was to be constructed with balanced budgets, welfare recipients who found jobs and expanded global trade.

Three decades later, President Joe Biden is dealing with harsh 21st century realities and his approach has been the exact opposite: Borrow to spur growth, offer government aid without mandating work and bring global supply chains back to the United States.

This change in Democratic policy reflects the unique crises caused by the pandemic, as well as decades-old trends such as the rise of economic inequality, the downward slope of interest rates that made borrowing easier and globalization’s pitfalls as factories departed the Midwest. White House aides are comparing the scope of Biden’s policy ambitions to Franklin Delano Roosevelt’s after the Great Depression.

All of these factors coalesced in Biden’s $1.9 trillion relief package that his administration is now selling nationwide to voters. And even grander designs are still to come for an infrastructure package and investments in workers that Biden will probably detail in a speech Wednesday in Pittsburgh.

“The underlying goal of how do we deepen, broaden and secure America’s middle class has changed with the times,“says Heather Boushey, a member of the White House Council of Economic Advisers. “What happened in 2020 was this huge unmasking of all these fragilities and vulnerabilities in our economy.”

Biden’s relief package — which comes on top of roughly

$4 trillion in aid already approved to address the coronavirus fallout — is an effort to strengthen the social safety net that many in his own administration had helped stitch during Clinton’s second term.

White House chief of staff Ron Klain held the same job for Clinton’s vice president, Al Gore. Treasury Secretary Janet Yellen was Clinton’s chief economist. Gene Sperling, who oversees the release of the relief money, was director of the National Economic Council back then. Deputy chief of staff Bruce Reed had been the head of Clinton’s Domestic Policy Council.

At the time, the Clinton administration seemed to have found a winning formula. The

1996 welfare overhaul signed during the heat of a reelection campaign was designed to end welfare as an entitlement and move aid recipients into jobs, while globalization offered the potential for greater profits for employers.

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Democratic voters have also evolved since the peak of Clintonism in the 1990s. They became more diverse, more likely to hold a college degree and more likely to live in an affluent city or suburb. That progression was easily overlooked until Donald Trump won the presidency in 2016 on the promise of scrapping trade deals, declaring that the government had stiffed the public and vowing to return the country to a past blue-collar identity.

“That happened without Democrats really taking it into their politics until Trump comes along and he is the wakeup call,” said Elaine Kamarck, a senior fellow in governance studies at the Brookings Institution who served in the Clinton White House. “Democrats were slow to realize this, but Biden was not. Biden was probably the best about this.”

Celinda Lake conducted polling for both the Clinton and Biden campaigns. Clinton was a relatively young 46 when he became president, the first baby boomer to take the reins of national leadership. Baby boomers, by contrast, had practically grown up with Biden in one office or another. An experienced hand in a crisis, he spent 36 years in the Senate and eight as vice president to Barack Obama.

“It was the inverse choice in terms of leadership — in 1992, they went for the next generation, the new thing,” Lake said. “In 2020, they went for the steady leader.”

At 78 years old, Biden can remember an older Democratic Party that believed big government was not inherently bad government. The child tax credits in his relief package let aid flow to families without imposing work requirements. His $1,400 direct checks go to each partner in a couple earning as much as $150,000, effectively expanding the social safety net beyond the poor to 158.5 million households.

The pandemic relief is financed entirely by debt, something made possible by interest rates hovering near historic lows. Despite the growth of the national debt since Clinton’s presidency, the federal government spent a smaller share of gross domestic product servicing the debt last year than during the Clinton era. This has made it possible so far for the government to borrow such large sums, though long-term debt pressures remain.