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President Biden took office with FDR-sized ambitions, determined to fundamentally remake the welfare state.
It didn’t work out.
Things started out well enough with a pandemic bill chock full of temporary relief programs and plans for a longer-term version. But his follow-up proposal went off the rails, thanks in part to high inflation that the stimulus spending had worsened.
When the Inflation Reduction Act finally passed the Senate last week, it excluded almost all of his original social spending plans.
The efforts to expand the safety net mostly fell short, but a string of legislative victories elsewhere may offer an identity more suited to his Scranton-bred image: Biden the Builder.
Three bills tell the story of Biden the Builder:
- A $550 bipartisan infrastructure bill featuring investments in areas like roads, water, broadband, and energy.
- The CHIPS and Science Act, a $280 billion bill boosting semiconductor production at home and advanced research into fields like artificial intelligence.
- The Inflation Reduction Act, whose $369 billion energy section includes tax credits and financing for everything from nuclear power to heat pumps, as well as provisions to expand fossil fuel production.
A fourth may even come later, as Democrats work on a bill with Sen. Joe Manchin, D-W. Va. that would make it easier to build energy projects by shortening the environmental review process.
Taken together they amount to a staggering investment in a very specific vision of the economy, one that puts the government on the side of making more things, making them in America, and (mostly) making them cleaner, amidst a global supply crunch and climate threat.
“Today is a day for builders,” President Joe Biden said at his bill signing for the CHIPS and Science Act on Tuesday. “America is delivering.”
To see how these policies complement each other, consider one industry that has already grown rapidly with early help from the government, electric vehicles:
- The infrastructure bill included $7.5 billion to build charging stations, especially in rural areas, to encourage drivers to purchase EVs.
- The manufacturing and tech bill offers billions to build more chips in America, which could help resolve chronic shortages that have hampered auto manufacturing.
- And the Inflation Reduction Act will provide tax credits for customers to buy EVs, but only if automakers can make them primarily in America using raw materials extracted domestically or from countries with friendly trade relations.
If it all goes to plan, a future driver pulling off I-95 to charge an affordable American-made electric SUV at the Biden Welcome Center in Delaware on the way to their job at the battery factor might have him to thank.
Biden's approach is part of a budding industrial policy movement in both parties that favors using the government more to boost U.S. businesses deemed critical, especially in manufacturing and energy. It stands in contrast to earlier approaches that favored lifting trade barriers and subsidies to encourage companies to find the cheapest ways to produce goods.
Some of the shift is driven by economic concerns. Democrats argue that by investing in green tech, for example, they can provide jobs, lower energy costs, and slash greenhouse emissions. There’s also a national security angle that attracts Republicans, namely a growing fear that China has too much leverage over key supply chains and is rivaling American investments in advanced research.
"Yes, we're going to absolutely use markets, we're going to use private firms, none of that is going away, but we're going to be specifying from the public sector, 'Here are the outcomes we want to see in the real world,'" Todd Tucker, Director of Industrial Policy and Trade at the progressive Roosevelt Institute said.
Another significant goal underlying recent bills, Tucker added, is ensuring gains are spread more evenly than the free market might dictate. There are requirements and incentives in the IRA for building projects in disadvantaged communities and paying prevailing wages, for example.
That’s the idea, at least. There’s still plenty of ways Biden the Builder's dreams could end in tears too.
Already, the infrastructure bill’s ambitions are being trimmed by inflation. Some are skeptical investments in domestic manufacturing will do more than pad company profits, or that companies can find enough qualified workers.
The climate bill is betting on a wide range of technologies, some of which may not scale up as planned. Domestic manufacturing requirements may end up impossible to meet. Provisions favoring fossil fuels could undermine climate goals. Republicans argue new taxes on big business will be counterproductive (though a tax in the IRA affecting manufacturers was scaled back).
And politically, it will be hard for any of it to break through if inflation stays high or the hot labor market fizzles.
What we do know, though, is that Biden will get a shot to pursue industrial policy with a level of sustained investment that no recent president has enjoyed. Any piece that hits the jackpot, from a breakthrough in quantum computing to a boom in geothermal power, goes straight into the presidential library. Perhaps in the "Biden the Builder" exhibit.