If you listened to Joe Biden’s address to Congress last night, you know that he proposed sweeping (and expensive) governmental plans, which he proposes to finance with taxes on corporations and the wealthy.
Here’s a video of the full speech:
Among his proposals are these, as outlined by the New York Times:
What he’ll do:
The “American Families Plan,” as he called his latest, $1.8 trillion proposal, would follow the “American Rescue Plan,” a $1.9 trillion package of spending on pandemic relief and economic stimulus that he has already signed into law, and the “American Jobs Plan,” a $2.3 trillion program for infrastructure, home health care and other priorities that remains pending.
The families plan includes $1 trillion in new spending and $800 billion in tax credits. It would finance universal prekindergarten for all 3- and 4-year-olds, a federal paid family and medical leave program, efforts to make child care more affordable, free community college for all, aid for students at colleges that historically serve nonwhite communities and expanded subsidies under the Affordable Care Act.
The plan would also extend key tax breaks included as temporary measures in the coronavirus relief package that benefit lower- and middle-income workers and families, including the child tax credit, the earned-income tax credit, and the child and dependent care tax credit.
Paying for it:
To pay for that, the president proposed increasing the marginal income tax rate for the top 1 percent of American income earners, to 39.6 percent from 37 percent. He would increase capital gains and dividend tax rates for those earning more than $1 million a year. And he would eliminate a provision in the tax code that reduces capital gains on some inherited assets, like vacation homes, that largely benefits the wealthy.
He also noted that he exceeded his campaign promise vis-à-vis inoculations, helping get more than 200 million Americans vaccinated in his first hundred days in office.
And although Biden still made noises about being a “unifying” President, I think we all recognize that he’s given up on that. And rightly so, because the Republicans are absolutely intransigent.
Over at CNN, 13 of the 15 commenters rated his speech either an A or a B (the two dissenters, giving him a D for substance, are Republicans or worked for Republicans). Here’s what David Gergen, who gave Biden an A, said:
Can Biden Measure up to FDR and LBJ?
Only twice before in history has an American president done what Joe Biden did tonight: issue a clarion call for a transformation of the nation’s social safety net.
Franklin Roosevelt was the first to envision a strong, impenetrable safety net that would protect citizens from cradle to grave. That was the essence of his first 100 days after his election in 1932. Inspired by Roosevelt, Lyndon Johnson chose his first congressional speech as the forum for laying the groundwork for his Great Society programs after his 1964 election.
But can Biden be as successful? He certainly gave one of his most effective speeches tonight. For the first 40 minutes of his address, he laid out a menu of delights for the middle class that will surely be popular. His arguments for his plans were well crafted and deftly delivered.
But there is one crucial difference between Biden and his predecessors, Roosevelt and Johnson: those two men began the fight with far more political strength in Congress. Roosevelt’s Democrats held 59 of 96 Senate seats and 313 House of 432 House seats when he was first elected. And coming off a landslide election, Johnson commanded 68 Senate seats and 295 House seats. Biden, by contrast, holds congressional power by a thread.
It is also a fair question whether the price tag for the President’s plans — about $6 trillion in total — is so towering that public support will wane over time. For now, Biden holds the upper hand with the American people. Whether he can keep it may well determine whether he will join Roosevelt and Johnson in the Democratic pantheon.
My own opinion; it was a very good speech, aimed at the average American (I won’t assign a grade)—ambitious for the country but not self-aggrandizing for the man. Biden radiated compassion and empathy. It was thus a hugely refreshing change from our previous “President”. I am not in the tax bracket that will be asked to pay more, but if I were, I would, and I’d be willing to pay more taxes even now (I note that I’m not strapped for cash). I still worry that Biden will be coopted by the Woke, but compared to Trump, that’s a minor worry, and I count on the rational to reign him in. (Perhaps that’s a vain hope.)
As for the impact of the enormous spending and taxing required, it’s always popular to finance stuff by calling for taxes on the rich and on corporations. Whether this will affect the economy as a whole is beyond my pay grade.
Oh, one more worry. Given that much of this legislation may require 60 votes in the Senate—votes that Biden doesn’t have—can this actually be accomplished? It cannot all be done by executive order, you know.
But I am neither a politician nor a pundit, and the purpose of this post is to ask readers to discuss the speech, how they feel about it, and any worries they have about how the new administration is going. Comments should go below.
I have concerns about initiatives like universal pre-kindergarten and expanded access to day care. I can’t see how programs that require a trained and competent labor force can be scaled up quickly without having people watching kids who shouldn’t be watching kids.
I didn’t watch the speech, but I generally agree with the policies mentioned in it.
Well, as you said, he needs 60 Senate votes to get a lot of this stuff passed, so it’ll have to be watered down or include a bunch of gimmies to get passed. In that sense, it’s minimally unifying. Also as your post on Carville noted, the Senate makeup means the Dems cannot be any more liberal than Manchin, no matter what they might ideally like to do.
I’m sure the Senate problem bothers Biden, but I doubt he’s all that upset at being “forced” to stay in the middle to get things passed. Moderate Dem is what he’s always been anyway.
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There is no question that the Biden proposals would transform the country in a way that would equal or surpass what FDR or LBJ accomplished. Despite conservative howling about Marxism and socialism, I believe a much better country would emerge. Yet, I can’t get very excited because it is obvious to all with a fleeting understanding of American politics that Biden, in contrast to FDR and LBJ, does not have the votes to pass most of his legislation (at least in the form he desires) due to the political makeup of the Congress and the filibuster. Unfortunately, this speech and his proposed legislation will be nothing more than a footnote in the history of his administration. There isn’t the slightest indication that political gridlock will not continue into the indefinite future. The fact that for the moment, at least, his proposals have won the support of the majority of the American people is beside the point. Republican politicians have been markedly successful in convincing its base that cultural issues are more important than the economic ones. This fact, in conjunction with the electoral map, is why most political analysts think the Republicans have an excellent chance of retaking the House in 2022.
The Dems’ most crucial need, I think, is to find a genius PR firm and to follow their advice. The Republicans clearly have absurdly good ones.
Genius PR firm = James Carville
Sounds good to me.
I agree with you. They have their own TV companies
I’m no historian, but it seems to me that Gergen’s analysis of the “support” that FDR and LBJ enjoyed in Congress is overly simplistic. One must remember that a substantial subset of those congressional Democrats were “Dixiecrats”, who were far from supportive of the respective presidential agendas.
Regarding FDR and the New Deal, it is true that he depended on southern Democrats to pass his legislation. But in the 1930s, these southern legislators were actually quite progressive in economic matters and supported FDR’s legislation as long as it didn’t upset the racial order. Thus, FDR was willing to allow legislation pass that effectively omitted blacks from its benefits. Only in the 1940s did the southerners re-orient to become economic conservatives.
Historian and political scientist Ira Katznelson has written a provocative book on this subject. The link below leads to an interview of Katznelson in which he describes the political atmosphere that FDR operated in. He provides detail that goes beyond a simplistic understanding of it.
https://historynewsnetwork.org/article/151867
Now you see why I preface my remarks by stating that I’m not a historian.
A very interesting article that offers a perspective I hadn’t known about with regard to the “deal with the devil” that FDR made in order to make the New Deal palatable to the South.
Thank you for sharing!
FDR was able to hold together the more tenuous aspects of his New Deal coalition — such as the support of both northern urban black voters and the old boll weevil southern segregationists — through a cunning combination of tepid support for civil rights along with giving the southerners a more-than-fair slice of the New Deal pie, such as the Tennessee Valley Authority.
This coalition began to fray in 1948 when Strom Thurmond and other southerners walked out of the Democratic National Convention in Philadelphia to form the Dixiecrats in response to a stemwinding speech in support of a strong civil-rights plank in the Party platform by the young mayor of Minneapolis, Hubert Horatio Humphrey. And it fell apart completely when former Texas senator Lyndon Johnson (viewed as a turncoat to his fellow southerners) rammed the Civil Rights Act of 1964 through congress (resulting in five states of the deep south bolting the Democrats to vote for Arizona Republican senator Barry Goldwater, who had voted against the CRA ’64 — and when, in the very next presidential election, four of those five deep south states, plus Arkansas, voted for George Wallace over Johnson’s VP and would-be successor, HHH himself).
As he put his John Hancock on the Civil Rights Act of 1964, Johnson told an aide the Democrats had thereby “lost the South for a generation.” Turns out, it’s been for more like for three generations and counting.
Adolph Reed’s recent article on the New Deal is also worth reading:
https://newrepublic.com/article/155704/new-deal-wasnt-intrinsically-racist
I thought it was a pretty bold plan but it needed to be. In the past the democrats have actually done little to live up to their own standards and that is why the republicans got them four years ago. If you are going to be a democrat then act like it and stop all of this moderate foot dragging that got them defeated four years ago. Biden is attempting to be the first honest president who is attempting to do what he plans. Will he get any of it done, I have no idea. The fact is it depends on the republican voters. Will they continue in the cult of Trump mold or will they actually think for themselves at the next voting cycle. I do not have much hope but it is not on Biden’s back to make it happen. It depends on the voters as it always does. That is a big problem with our so-called democracy. It is not really a democracy at all and anyone who thinks it is, needs a course in civics. The manipulation by so-called media and social media determines the voter mentality today and tends to drive it down and more tribal than ever. Overall I am not optimistic about the future of the country.
I thought it was a decent enough speech. He did on occasion make his pitch, for example around immigration, and then essentially say “if you can’t agree to everything, pass the stuff we all agree on and we will work on the rest separately”, possibly a good ploy to not let the perfect cancel the good. Or perhaps a tacit admission of his inability to get everything (or anything?). He’s been there long enough to know that reality.
As you note, its a nice change to have an office holder in that position who seems to respect the job.
I doubt Biden has given up on bipartisanism but it has given up on him for now. He’s making the pitch to citizens of both parties so he’s hoping that this will put pressure on GOP politicians. I doubt it will work fast enough (or at all) as most GOP voters are watching Fox News. Actually, last night’s speech was his best chance at taking the message to voters so it will be interesting to see if it has any effect. My guess is it won’t. In the current political environment, even JFK would have a hard time budging anyone.
As others note, Biden just doesn’t have the votes. Do they have some trick they’re going to pull or are they just running on wishful thinking? Perhaps they’re waiting for the GOP to implode which they are doing slowly. Not fast enough to help Biden I’m afraid.
Is the deficit spending proposed around $5 trillion? How much of that is offset by taxes? I expect that only a portion of it would be.
I understand part of the tax increase is wiping out “carried intererest”, which was an extraordinary gift to hedge funders. In essence, they paid, I believe, around 13% percent rate on earning from hedge funds…as opposed to what most people pay on earned income with a top rate of 35% or so….
That’s a good question…the ‘proof in the pudding’ isn’t how the administration represents it’s economic package, but what the more sober OMB analysis of the package turns up. We’ll probably get that within a week or two.
The smart money is probably on a conclusion that predicted increases in revenue will not cover the increased in proposed spending. For most administration budgets (Dem and GOP), that’s the case. But the size of the shortfall or whether there will be a shortfall in this case? Who knows.
Only a small portion will be covered by new taxes. However, if the US doesn’t recover quickly from a deep recession like the Covid-19 one, a good chunk of economic growth can be permanently lost (the economy doesn’t rebound all the way to its pre-recession trend). After such a loss, tax revenue will be lower year upon year, for any given set of tax rates and rules. There is fiscal danger from spending too little in a recession, as well as from spending too much.
Where the sweet spot is, I have basically no idea.
If all the plans fail to pass except for spending for significantly mitigating global heating, I’d count it as a win.
I thought it was so refreshing – measured, calm, ‘unoriginal’ (as some apparently complained), solid, progressive. It was a breath of fresh air after the last four years of spittle-spraying hate.
Refreshing is a good word. And wasn’t it refreshing to see Speaker Pelosi and Vice President Harris behind the President instead of Speaker Ryan and Vice President Pence? Talk about a contrast!
Indeed! I had forgotten about sad-muppet Paul Ryan until I saw the comparison picture. Maybe I’m foolish, but I’m enjoying the feeling of cautious optimism. Doesn’t hurt we’re having one of those spectacular sunny, spring days in the South Sound.
The 1.9 trillion dollar ten year cost of the program is not that large. Less than $200 billion per year added to a $4.5 trillion annual Federal budget. Trump’s tax cuts for the rich cost more.
It’s interesting he makes such a big point about $400k being the cutoff for tax increases. There is such a big gap from “struggling to get by” to $400k, and there are a whole lot of people who are very comfortable in that gap. Why not a small increase starting at $200k? That’s still a very good living, and would easily put those earners in the top 10% or so.
Going from 1.8% ticked off voters to >10% ticked off voters would probably cost a few House and Senate seats.
Possibly more importantly, there are probably a fair amount of blue urban districts (Manhattan, SF, LA, etc.) where $200k/year is simply middle class due to costs of living. I’m guessing he’s trying to avoid taxing those folks any more, even if the notion of $200k being “middle class” seems ridiculous to folks outside of those large city areas.
I suppose you’re right, and I suppose those $200k jobs are probably clustered in those high cost of living areas. Still, you’d think a 1% increase could be swallowed pretty easily by people making $200-$399k.
Tax increases are always painful not because some objective amount of tax is too high, but because most people live the lifestyle they can afford. When their money goes up, they don’t stash away the extra, they get a bigger house. Nicer car. More vacations. So in some sense it doesn’t matter if you’re making 10k or 100k or 1M, any tax increase is probably going to cause you an unexpected and unplanned for budget problem.
I should say I’m not opposed to Biden’s tax increase. I wouldn’t be opposed even if he dropped the floor down to where I was personally affected (a looong way down from $400k…). I’m just pointing out that the unwise state of “oh crap, I’m overstretched, how am I going to afford this tax increase” is not a problem limited to the poor or middle class.
I have not done this (I have had a few indulgences of course). As my salary went up, I increased my 401(k) contributions and the savings for my son’s college fund such that my income that I saw in my paycheck stayed about the same.
Eventually, I hit the maximum for 401(k) contributions and have adjusted each year to hold it there. This was over decades. As a consequence, we will have choices in retirement.
I realize not everyone is fortunate enough to be able to do such things.
I will also say that my wife and I have worked our asses off. I’ve worked full time (the last 40 years) plus run a home-based business (the last 20 years). And we have lived a modest lifestyle. For instance, we’ve always driven used Toyotas (white ones!). Our house is 2500 sq-ft. We eat out perhaps once a month. We don’t have a boat.
It’s very easy to get above 200K with two professionals working and older than age 40, almost anywhere in the USA. We are there (for now, soon to change with retirement).
As always, we are the ones (middle class folks) to shoulder the burden. The 2017 law was my biggest tax increase in my lifetime. This will be another increase; but not for long for us.
And: At least I support the goals of this increase!
I support progressive taxation. I live in a notoriously “high tax” state. I am not interested in paying for corporate welfare (or for other people’s student loan bills*).
* We had student loan debts and paid them off over decades. I am in favor of the first two years of community college being made tuition-free.
This is right on the money.
I grew up in the midwest, where 200K would indeed be a very nice living.
But now I live in Westchester County in New York, and 200K a year, especially for a family, only gets you a solid middle class life at best. It is nowhere near rich. In particular, housing costs are ridiculous, such that even small “starter homes” built in the 1950s regularly cost upwards of 900K. Your mortgage and property taxes alone will soak up a good chunk of that 200K (pretax mind you) yearly income.
As such, a wealth tax starting at that 200K limit would unfairly penalize many people who, due to their high cost of fixed living expenses, actually don’t have that much disposable income.
Well, as agreeable as these proposals are, in reality what we really need is a massive program to blunt the progress of climate change. This is the most important of all problems.
It’s hard to convince people who are hungry of that.
Right, you need to wait until their house gets washed away by a storm surge that rides on top of rising sea levels. Or burned up in the massive firestorms that are stalking California and Australia. Then they’ll probably be convinced. Unfortunately, at that point it’s kind of too late to prevent the bulk of the problems.
Since the 1980s, top marginal federal tax rates in the US have, with some zig-zags, generally been pushed down, and other special tricks (such as the “carried interest” gimmick for hedge fund managers) have favored the very rich. Their hirelings in government, the Republican Party, will fight like Kilkenny cats to protect these indulgences. Nonetheless, some of the zig-zags mentioned above—such as during the Clinton administration—show that it is possible, under some conditions, to increase the tax burden of the wealthy. But to bring this about, the Democratic Party will have to increase its microscopic majorities in the Senate, particularly, and in the House. Maybe in 2022, if President Biden’s ambitious proposals achieve broad popular support, and the Republicans in the states permit voters to turn out and vote.
Rich Hall had a “comedy” take on Biden’s first 100 days (and other US current affairs) for BBC Radio 4: https://www.bbc.co.uk/programmes/m000vhl7
The fundamental questions to ask of republicans should be out there loud and clear for all to look at and answer. Why do democrats not even try? Try a few of these –
Why do you like making laws in the states to make it harder to vote.
Why do you like that your party gave the rich a nearly 2 trillion dollar tax break and did nothing else for four years. I shouldn’t say nothing, they tried like hell to take away what little health care the democrats provided. Do you approve of the insurrection performed by the republican white nationalist on Jan. 6. What plans in the democrats agenda hurts you. Be specific. Did you like the way Trump sucked up to Putin for 4 years. There are many more but just work on those for the moment.
I was happy with the speech, which I just heard as a recorded version today.
Uncle Joe is the left-middle moderate sort of guy we thought he was.
I am in favor of virtually everything he proposed (which will include higher taxes on me, I’m sure).
As someone above noted, the Dems do need to hire James Carville to do their marketing.
I really didn’t like the speech. It felt like a speech to roughly 50 percent of the country, with no interest in negotiation. I don’t think it’s accurate or fair to say “There’s no reason to talk about negotiating with Republicans, because they’re so awful and won’t negotiate with us”.
Increasing taxes on capital gains, corporate income, and so forth will lead to fewer jobs–regardless of how many times President Biden said the word “jobs”. Corporations are not the embodiment of evil. I’m so glad Pfizer had enough money to do the herculean task of rapidly developing the Covid vaccine. So glad Moderna could do so as well. Higher taxes on corporations will mean they have less to invest in new factories, products, and in hiring new employees. They will pass along the higher cost of doing business to customers–to us.
Republicans need to work with Democrats. Democrats can’t and shouldn’t do all they’re threatening to do in Biden’s speech, but Republicans can’t just fold their arms and refuse to even discuss these things. I think this speech and the tenor of Biden’s administration thus far will guarantee the Democrats lose the House and Senate in the midterms.
“Higher taxes on corporations will mean they have less to invest in new factories, products, and in hiring new employees.”
Maybe but lowering their taxes didn’t have the opposite effect so I’m skeptical. While the availability of money is a factor in business, it is wrong to pretend that it is all that matters. Most medium and large companies can get the money when they need it. An educated, healthy workforce probably matters at least as much.
If I were the Dems, I would try to get voters off this idea that the only thing government can do is raise or lower taxes. There are certain things that only governments can do and are worth paying for. The benefit received should always be part of the discussion. Otherwise it’s like going into a store and telling the salesperson that you don’t care what you’re buying, you only care what it costs. Makes no sense.
That’s right. Businesses create jobs when there is more demand (or they anticipate a demand) for their product or service, not for any other reason.
70% of the US economy is consumer spending. Squeeze the middle class and you get stagnation. See: Japan for most of the last 30 years.
Trickle down has not worked, period. It’s been conclusively disproved over the last 40 years. We gave the rich the money and they kept it. Surprise, surprise.
+1
I think that after four years of supporting Trump, it is not Biden’s job to reach out the the Republicans.
Of course, corporations, like people, are taxed on profit, not income (taxable income for individuals). So what is taxed is what is left AFTER investing, paying salaries, and so on.
Only in some ideal, perfect world would the Republicans do penance for giving us Trump. Biden should “reach out” to Republicans but only if they want to negotiate in good faith. Right now, the GOP’s response to that reaching out is lacking. Biden is going on a tour to promote his agenda. Presumably he will ask voters to call their reps in Congress to get them to support it or come to the table. I doubt it will work but I guess it is worth a try.
Corporations are taxed on profit but many who profit greatly pay low or no taxes. That has to stop.
‘Higher taxes result in fewer jobs’ – read Krugman in today’s NYT for an alternative view, in which he cites most of western Europe as examples of countries with higher rates of taxation, and which have also created more jobs.
“Trickle down economics doesn’t work” YES! That’s all I needed to hear. Finally, democrats are attacking Reagan’s legacy of a hollowed out middle class, a decline of unions and income inequality. Obama never said anything so bold, even though he knew trickle down was a failed system.
“….trickle down was a failed system”
I agree with all you said, except perhaps one word just above. Calling the bullshit of ‘trickle down economics’ a system is like calling astrology a science. Krugman has said as much, him being very capable of analysis.
But this discussion is for USians and I’m not one, so I better shut up.
I don’t see why, you sound more sensible than a lot of my fellow USians.
I thought it was a good speech, and fairly well delivered, but I remain very skeptical of how many of those proposals will actually turn out, should they be enacted.
My biggest concern is that estate taxes will be modified in such a way that it just will not be possible to keep family farms like ours running. The tax burden would mean that all such enterprises would eventually be sold to developers, subdivided, and bulldozed. I also doubt that the big donors for the democratic party are going to be actually end up paying significantly more taxes.
I also watched the rebuttal speech, and Sen. Scott made a significant factual error. He stated that “America is not a racist country”. The amount of racist name calling he received after his speech shows that his claim might need some modification.
Either Biden does not know the truth or finds it too hard to say from a political standpoint. Climate change is far more serious than he or anyone in his administration is saying. This is a new ballgame and unlike climate cycles in the last 800,000 years. The CO2 we have already put in the atmosphere is huge and here to stay, permeate. See, https://www.reddit.com/r/dataisbeautiful/comments/ct9ifm/oc_co2_concentration_in_atmosphere_over_last/
President Biden laid out policies to aid children and the elderly; to provide 4 more years of education for all. The Republicans seem to be hellbent on making the rich richer, or at least not suffer any financial loss.
What would 🌀Jesus🌀 do? Haha – I hope Republicans have a tortuous coming to terms with their party. And that Independents move more with Democrats.
A lazy billionaire content with earning only 2% on his first billion, makes something like 20 million a month in interest. The super wealthy, largely supported by (now weak) infrastructure paid for by tax payers, need to give it up for the sake of educating and caring for the entire population.
Apparently, according to the GOP, Hank would elect Voldemort (POTUS 45) to lead the USA!
I favor progressive taxation. And spend it on educating people. It’s much cheaper in the long run to prepare a person for a good job rather than for a prison cell.