By some measures, President Biden’s “Build Back Better” plan is larger than the New Deal Franklin Roosevelt enacted during the Great Depression. Voter reaction: Bring it.
Biden’s overall plan is actually three separate packages, each in the neighborhood of $2 trillion in spending or more. Congress already passed the “American Rescue Plan” ($1.9 trillion) in March. Shortly after that Biden unveiled his “American Jobs Plan” ($2.7 trillion) and this week he released his “American Family Plan” ($1.8 trillion). Biden would finance much of this new spending by raising taxes on businesses and the wealthy, so in theory it wouldn’t add that much to the national debt.
Add it all up, and Biden wants to spend 27.5% of GDP on his economic plan, according to new research by policy analyst Bruce Mehlman. That’s the biggest spending package, outside of war, in U.S. history. The New Deal was only 12.6% of GDP, and the Marshall Plan that helped rebuild Europe after World War II was only 5.2%.
That’s an imperfect way of measuring a policy proposal, because GDP is an annual measure of economic activity while Biden’s program (like the New Deal) would roll out over several years. But it’s a basis for comparison. Even if Congress cuts the AJP and AFP in half, the package would still amount to some 18% of GDP, 50% larger than the New Deal.
Do we really need such massive spending? By conventional measures, no. The economy grew at a 6.4% pace in the first quarter, and total GDP will soon reach pre-pandemic levels. We’re still 8.4 million jobs below the pre-pandemic levels of February 2020, but hiring should be strong through the end of the year. Some employers can’t find enough workers and instead of weak demand, the economy now suffers from supply shortages that are pushing up prices.
Biden, however, thinks he has a chance to revamp the economy in ways that will ameliorate gaping wealth inequality while better situating the United States for future competition with China. His jobs plan would entail massive spending to convert the economy from carbon to green energy and root the technologies of the future on U.S. soil. His families plan would provide unprecedented financial help to working parents and substantially strengthen the social safety net. What’s so bad about that?
Nothing at all, voters seem to be saying as they take it all in. An April 26 Monmouth University poll found that 68% of voters support Biden’s infrastructure spending plan, with just 29% opposed. The same poll found 64% support for more health care and child care spending, as in Biden’s families plan. In a Reuters-Ipsos poll, 73% said they approve of the economic priorities Biden laid out in his first address to Congress on April 28.
Such polls also find that around one-third of Republicans like what Biden is proposing. That’s not a majority, but it shows that Biden is succeeding to some extent at one of his key political goals: Winning over Independents and some Republicans who supported Donald Trump, because they felt he paid more attention to working-class people falling behind than Democrats did. Biden will never win the nativist Trump base, but he doesn’t have to. Pulling even a small portion of GOP-leaners away from the party would be a big win for Biden and his fellow Democrats, and possibly help them retain or expand control of Congress in the 2022 midterm elections.
There’s worse news for Republicans: The Reuters-Ipsos poll found that 51% of all voters and 40% of Republicans reject the “trickle-down” economic theory that backed the 2017 Trump tax-cut law. Only 30% of Republicans back the idea of trickle-down economics. Since the Republican answer to Bidenomics is the same old small-government, low-tax mantra, they seem to be firmly on the wrong side of what voters want.
Congress will not pass everything Biden is asking for. But if they pass half of it, it will still represent a major and perhaps historic shift in government priorities. Biden has structured his families plan in particular so that it will deliver direct aid to millions of homes and leave Republicans struggling to explain how this government overreach is bad for families. Most Americans don’t care if taxes go up on businesses and the wealthy, and the nation’s elite have the resources to adapt and continue thriving. Biden is offering millions of others a taste of that, and it should be no surprise that they want it.
Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips, and click here to get Rick’s stories by email.
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