Can Biden get his mojo back?

ONCE upon a time in America, long before the age of political polarisation, pundits would have been celebrating President Joe Biden’s recent legislative and policy triumphs as “historic”, predicting that one day he would be compared to some of the most successful White House occupants.

Indeed, following the lead of President Biden, Democrats on Capitol Hill announced last week that they have produced what could turn out to be the biggest climate bill in, well, world history.

And by the way, as part of the legislation they fashioned – just a few days before lawmakers left Washington for their summer recess – the Democrats included provisions to lower the cost of prescription drugs; extend subsidies under the national healthcare plan also known as Obamacare; establish a corporate minimum tax of 15 per cent; and close a loophole that some taxpayers used to lower their tax rates.

This would all cost a lot of money: US$433 billion in new spending, including US$385 billion to combat climate change.

The news stunned lawmakers and journalists, who for close to 2 years had been arguing that the president’s original Build Back Better spending bill was dead on arrival after a key Democratic senator, Joe Manchin, vowed not to vote in favour of the legislation and thus denied the Democrats the majority they needed to pass it.

Hence the conventional wisdom in Washington until last week was that, with his favourability rating continuing to fall in the opinion polls, President Biden would not be able overcome the loss of his political momentum – leading to huge Democratic losses in the coming mid-term elections, and costing the president’s party control of the House of Representatives.

One reason for the growing sense that President Biden was a political loser stemmed from the fact that he had entered office with high public expectations, with many Democrats comparing him to President Franklin Delano Roosevelt (FDR), and his ambitious social-economic plans to the New Deal programmes of the 1930s that helped the United States overcome the Great Depression.

Indeed, the original size of the Build Back Better plan was US$3.5 trillion – a gigantic spending programme that included provisions related to social policy, climate change and infrastructure, and would have involved a huge increase in the tax rate on corporations and the wealthy.

After the price of the bill was lowered to US$2.2 trillion, it was passed in the Democrat-controlled House of Representatives along partisan lines, 220 to 213. But lacking a winning majority in the divided Senate, the bill remained stuck there, with Senator Manchin expressing strong opposition to many of its spending provisions. More specifically, against the backdrop of rising prices, the senator from West Virginia argued the expansive fiscal plan was bound to increase inflationary pressures.

But the continuing legislative stalemate on Capitol Hill seemed to have diverted attention from President Biden’s decision to de-couple infrastructure-related provisions from the Build Back Better bill – and his triumph in getting a, well, historic US$1.2 trillion bipartisan infrastructure bill passed in the Senate.

That victory in the Senate came after the latter had already embraced President Biden's US$2 trillion stimulus package aimed at reviving the economy in its recovery from the pandemic.

Those successes demonstrated that while President Biden may not have been a new FDR, after serving several decades on Capitol Hill, he could play the role of an effective deal maker, a pragmatic centrist parliamentarian – as opposed to the hopes of the left-leaning members of his party, who imagined him to be a progressive ideologue who would preside over the largest redistribution of wealth since the Great Deal.

The latter was not going to happen, not only because the White House lacked the necessary votes on Capitol Hill, but also because most Americans were opposed to that costly social-economic experiment.

So while the media was already writing his political obituaries, President Biden and his aides were working behind the scenes to try to persuade progressive Democrats that the revolution of which they were dreaming was not going to happen, while lobbying Senator Manchin to accept a trimmed-down spending plan that should nevertheless be regarded as a major achievement on many levels.

On the climate change front, the new legislation will boost the development of clean-energy technology while providing support for workers in industries that use oil and coal – like the miners in West Virginia – as the American economy attempts to reduce its dependence on fossil fuels The bill will also help reinforce the US position as a global leader on climate change policies.

With the legislation dubbed the Inflation Reduction Bill of 2022, President Biden and the Democrats hope to convince voters that it will respond to the challenge of inflation by raising more than US$300 billion in tax revenue to reduce the federal deficit.

The announcement of the new deal comes after two other wins by President Biden: a modest bipartisan gun control bill, passed in response to public revulsion over horrific mass shootings; and more significantly, Congress’ passage of the Chip and Science Act that aims at revitalising the American semiconductor industry.

The US$280 billion Chip and Science Act passed with the support of many Republicans despite that party’s strong opposition to the notion of “industrial policy”, and despite many progressive Democrats rejecting the idea of providing government support to large corporations.

Directing investment into workforce training and basic science research around the country, the Act is seen as part of efforts to strengthen America’s global technological position in the face of competition from China, which is why it was earlier dubbed the China Competitiveness bill.

While President Biden has not succeeded in fulfilling his pledge to bring a divided nation together, his legislative wins should be welcomed by the public as examples of how reaching compromises and making deals can help get things done in Washington.

According to opinion polls, most Americans support a major provision of the new spending bill that lets the federal government negotiate with drug companies to get lower prices on prescription drugs, as well as raising taxes on corporations and the wealthy in order to finance basic social-economic programs.

Granted, it is not clear if the Biden Administration’s success in pressing forward its policy agenda – through a breakthrough in the climate agenda, subsidising chip manufacturers and making prescription drugs cheaper – will make a political difference when inflation remains the main issue troubling American voters and when, as some economists argue, the American economy is entering a recession.

But there are some indications that the Democrats may be starting to close the wide electoral gap with the Republicans as the mid-term elections get closer.

The Democrats also hope that the ruling by the US Supreme Court to overturn the constitutional right to abortion could have an impact on moderate Republican and independent voters, as will the continuing love affair between the Republicans and former President Donald Trump. But whether that and President Biden’s recent wins can avert Democratic losses in November remains to be seen.