What ‘Build Back Better’ Could Mean
For the second time in a generation, a Democratic president has taken office in the midst of an economic catastrophe overseen by a Republican predecessor. Joe Biden, who was vice president last time, seems to have learned his lesson — it needs a big response, something on a generational scale — and almost everyone in the Democratic Party agrees. But not quite. And two hold-out senators could spell disaster — not just for Biden’s agenda, or the Democratic Party, but for American democracy and the future of the planet as well. If the plan doesn’t pass, climate action appears doomed, and Donald Trump could well be re-elected in 2024, again with millions fewer votes.
“It’s not sufficient to build back,” after the pandemic, Biden said on the campaign trail, “We have to build back better.” And he had a specific focus in mind. “Throughout this [coronavirus] crisis, Donald Trump has been almost singularly focused on the stock market — the Dow and Nasdaq — not you, not your families,” he said in his kick-off campaign speech near his hometown of Scranton, Pennsylvania. “If I’m fortunate enough to be elected president, I’ll be laser-focused on working families, the middle-class families that I came from.”
That promise is clearly reflected in the fully paid-for 10-year $3.5 trillion Build Back Better plan, which makes major investments in childcare, education, healthcare and housing just to bring America in line with its international competitors. Its climate agenda and broader environmental agenda will benefit families far beyond the 10-year timeframe.
The local impact would be dramatic, according to Harbor Area representatives.
“The Build Back Better plan would make transformational investments in addressing the toxic air pollution from trucks and ports,” said Congresswoman Nanette Barragán. “It would make it possible to replace polluting trucks and cargo handling equipment with new zero-emissions technology. This would dramatically
improve air quality in our region, especially for communities of color near the Port of Los Angeles.”
Congressman Alan Lowenthal agreed. “The scope of investments we’re looking at will absolutely be transformative for families and for our district,” he said. “Climate investments will have a huge impact greening the port and expanding electric vehicle infrastructure, while investments in the care economy — including child care, the price of medicine, home care and the cost of college — will provide critical support to many people while creating good jobs.”
Catching Up With the Rest of the World
Yet, aside from the climate investments, the vast majority of the spending would only help us to catch up with the average of where other countries already are.
“We’re among the first in the world to guarantee access to universal education,” Biden said in a major speech in Howell, Michigan on Oct. 5. “Now, the Organization of Economic Cooperation and Development ranks America 35th out of 37 major countries when it comes to investing in early childhood education as a percent of GDP.”
We spend less than 4% of the international average. The OECD average is $14,400, the U.S. spends just $500. As sociologist Jessica Calarco tweeted, “Other countries have social safety nets, the US has women.” Biden’s plan would change that, moving us more toward the average. It would make attendance at licensed child care centers free for the lowestearning families, with a cap of 7% of family income for those earning up to twice the state’s median income. It would also provide universal preschool for 3 and 4-year-olds, and — in its current version — raise the pay of child care workers and preschool teachers to the level of kindergarten teachers.
The child care and the pre-K programs will cost $250 billion each over 10 years, but will likely pay for themselves several times over in the lifetimes of the children through increased productivity, and reduced health care and social spending costs. Another program will add free community college, for another $100 billion, so that the current standard of 13 years of free public education — established in the 1890s — will expand to 17 years. (There is also expanded support for four-year colleges via a variety of programs.)
A similar logic can be seen in other programs as well. For example, a White House fact sheet notes that in 2018, “we spent less than one quarter of the average that other advanced economies spend on workforce and labor market programs as a share of GDP.” The Build Back Better plan includes $80 billion in a variety of workforce development programs. Biden’s stated goal is to create one to two million apprenticeships over the next 10 years.
America is also an outlier in providing paid family leave. According to the OECD, on average, “mothers are entitled to just over 18 weeks of paid maternity leave around childbirth,” but the U.S. is “the main exception” by offering none “on a national basis.” And while paid leave for fathers is not universal, the OECD average is 8.1 weeks. The Build Back Better plan would provide up to 12 weeks of paid family leave annually, replacing 85% of wages up to $290 per week ($15,080 annually), and decreasing percentages beyond that. We wouldn’t be a world leader, but we would at least join the modern world.
Similarly, the Build Back Better plan extends the refundable child tax credit that provides families with $3,000 per child 6 years old and above, and to $3,600 per child under 6. It began under the American Rescue Plan, running through the end of this year, and is projected to cut child poverty by 45% according to research from Columbia University. The Build Back Better plan would extend it through 2025.
Similar credits in Europe have long resulted in much lower child poverty rates, so once again, we would simply be catching up with where the rest of the developed world already is. Together with two other child tax credit programs its cost would be $400 billion. It’s money well spent, as Nobel laureate Paul Krugman observed. “The evidence for high returns from spending more on children is much stronger than the evidence for high returns to spending on roads and bridges (although we should do that, too),” he wrote. “So every year that we don’t increase aid to children, for example by expanding the child tax credit, leads to decades of wasted human potential.”
To catch up on healthcare would require something like Medicare for All, since we’re the only advanced industrial nation without universal healthcare. But the Build Back Better plan would significantly improve coverage, with $210 billion for expanded Obamacare subsidies, $200 billion to expand Medicare in red states that didn’t expand it under Obamacare, $250 billion for long-term home care for seniors and the disabled, and $370 billion to expand Medicare coverage for dental, vision and hearing services, and lower the eligibility age to 60. It would also empower Medicare to negotiate drug prices, saving more than $456 billion over 10 years (according to the Congressional Budget Office) and limiting out-of-pocket costs for recipients to $2,000 per year.
Finally, it would dedicate $300 billion for housing and homelessness — which we’ve under-invested in for almost 50 years — and $700 billion for a range of climate programs that also have a significant working-class and middle-class focus, particularly on the jobcreation side. The two largest programs are a roughly $300 billion package of tax incentives to increase the use of wind and solar power and electric vehicles, and a $150 billion proposal known as the Clean Electricity Program, would reward electric utilities that switch to renewables, and penalize those that don’t.
The Arguments Against
A number of specious arguments have been made against the plan. Some say it’s too big. While the total cost of $3.5 trillion sounds large — and it is — it’s just 1.2% of the projected GDP over the next 10 years and, as already noted, it’s fully paid for. This is done with $2 trillion in taxes (on corporations and individuals earning over $400,000), the Medicare drug price savings, improved tax compliance from increased Internal Revenue Service funding, and macroeconomic effects. And while some have raised fears it would lead to inflation, a Sept. 15 letter from 15 Nobel Prize-winning economists argued just the opposite. “Because this agenda invests in long-term economic capacity and will enhance the ability of more Americans to participate productively in the economy, it will ease longer-term inflationary pressures,” they wrote.
But the biggest problem facing the plan is the simple, publicly unexplained opposition of two Democratic senators, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona. Manchin has spoken in vague generalities (opposing “an entitlement society” for example). Sinema hasn’t spoken at all. Neither has been willing to negotiate specifics, which
is how legislation normally gets done, and they’ve dragged out the process significantly, while the media mischaracterizes it as a battle between progressives and “moderates.” But as Joan Walsh noted at The Nation, “The ‘left’s’ version of the reconciliation bill totaled $6 trillion; it was already cut back to $3.5 trillion.” The vast majority of genuine moderates are fully on board.
So it’s almost the entire party vs. two senators who’ve been unwilling to even negotiate. For months, they’ve been asked, “Tell us what you want to cut” and they’ve refused to say.
“It is really not playing fair that one or two people think that they should be able to stop what 48 members of the Democratic Caucus want, what the American people want, what the president of the United States wants,” Senator Bernie Sanders said on Oct. 7.
After that, word leaked out that Manchin wanted Democrats to choose just one of three family-supporting programs — the expanded child tax credit, paid family leave or subsidies for child care — all of which were overwhelmingly supported by West Virginia voters by 46% to 53% in a late August Data For Progress poll. So, rather than say which super-popular program he wanted to cut, he put the onus on everyone else — a move that would certainly cause further divisions.
Sinema has been even less helpful. She’s opposed to two things she’s championed in the past. First, she came out against having Medicare negotiate drug prices in late September, just after a drug company-backed dark money group launched ads supporting her. Drug companies have become major donors for her. Second, on Oct. 8, the New York Times reported that Sinema, who began her political career as a Green Party activist, “wants to cut at least $100 billion from climate programs” as part of her effort to slash the plan’s size.
Behind all the obfuscation, Manchin and Sinema simply oppose what their voters want in favor of special interests that support them. Majorities in both states support Biden’s plan by more than 2-1, according to September polling from Data for Progress: 68-25 in West Virginia and 65-28 in Arizona. While corporate influence in the Democratic Party has declined significantly in the past decade, it appears to have just enough clout to upend Biden’s primary piece of legislation. How much can be salvaged remains to be seen. But we should never forget the scope of what was proposed, and how much better life in America could be. It’s clearly possible, and it’s clear what’s standing in the way.