The paradox of Biden’s Presidency

Aweek ago, conventional wisdom in Washington held that Joe Biden's presidency was in a profound crisis. A drumbeat intensified for the ageing president not to run for a second term. But by the weekend, that narrative was upended as it once again became clear that he is accumulating a remarkable set of legislative achievements in short order and under difficult circumstances.

The sudden jolt was the announcement late last week that Senate Majority Leader Chuck Schumer and the most conservative Democratic senator, Joe Manchin of West Virginia, agreed to major spending on healthcare, taxation and climate change. If the bill passes – as seems highly likely since Republicans cannot block budgetary measures –  Biden will endure the paradox of having passed a vast array of popular legislation while retaining dismal poll numbers.

Republicans are outraged the agreement was kept completely secret, including from most Democrats and the press. For weeks, Democratic leaders insisted internal negotiations were ongoing, but carefully crafted the impression of an impasse.

Not wanting to allow  Biden too many successes, Republicans relied on this misdirection in supporting a $280 billion spending package to bolster American microchip manufacturing and other technological development. Aimed primarily at competition with China, it is the largest US industrial policy initiative in decades. It is also so evidently in the national interest that it should have been adopted without controversy or subsequent recriminations.

As soon as it passed, Democratic leaders announced that not only were their internal negotiations successful,  Manchin had agreed to a far bigger package than he lead people to believe he might. It is the latest chunk of  Biden's fraught programme, Build Back Better, a transformational agenda so sweeping it could not be passed in its totality, but much of which is instead being implemented piecemeal.

Last year, a huge infrastructure bill was broken away and adopted. When  Manchin insisted on a large reduction in overall spending on the rest of the package, and ruled out several key features including childcare, the project was generally given up for dead.

Now Democrats seem poised to pass another major chunk of the original highly ambitious agenda, and it will have a gigantic impact. Most strikingly, it will put the US on track to meet globally crucial climate change goals that had been considered politically unachievable.

Reversing decades of severe underfunding, the package provides major support to the beleaguered Internal Revenue Service, and that should finance the collection of untold billions in unpaid taxes. It imposes a minimum 15 per cent tax on the wealthiest corporations, many of which pay nothing at all, and higher taxes on "carried interest" exemptions enjoyed by the likes of private equity and hedge fund managers. Former president Donald Trump will surely be infuriated at the elimination of "pass-through" loopholes that apparently allowed him to often pay virtually no income tax.

Government health providers will finally be allowed to negotiate prices with pharmaceutical companies, saving billions and greatly reducing drug costs. And the US would get closer to universal healthcare coverage.

Some Republicans, infuriated at being thus gulled – although only into supporting obviously necessary legislation – are retaliating by withdrawing support for aid to military veterans exposed to toxic burn pits in Afghanistan and Iraq, and for legislation guaranteeing marriage equality. Both bills are overwhelmingly popular, so Republicans are being provoked into irrational and self-destructive retribution.

Democrats not only completely outfoxed the Republicans, by cannily marketing the bill – accurately enough – as the “Inflation Reduction Act of 2022,” they have emphasised how overwhelmingly popular virtually all its provisions and their impacts are likely to be.

Build Back Better was an ineffective legislative programme not because its provisions were largely unpopular – although it originally included regressive forms of student loan relief, and state and local tax benefits that favour the better off. Rather, it was simply too vast and sprawling to be comprehensible and, as a unified bundle, provoked powerful sticker shock at its
total costs.

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