Striving to better, oft we mar what’s well. ~ William Shakespeare (King Lear)
The Dems’ much-vaunted and massively
comprehensive “Build Back Better” (BBB) agenda was first discussed by Joe Biden
before his inauguration last January. Since then, it has evolved on a regular
basis. The BBB includes three major pieces: first, the covid-19 relief American
Rescue Plan (ARP) with a $1.9 trillion (T) budget that Congress
passed via reconciliation in March. Second, the American Jobs Plan (AJP); and
third, the American Families Plan (AFP).
I liken the Dems’ process for
passing the Build Back Better legislation to constructing a 271-piece jigsaw
puzzle, filled with oddly, sometimes changing shaped pieces. There are now 220
Dems in the House and 50 in the Senate, plus the vital, tie-breaking Dem VP,
Kamala Harris piece in the Senate, totaling 271. The Dems’ have been wrestling
for months among themselves to design and secure the best AJP and AFP programs.
At times, their conduct seems as if each and every Dem piece claims to be at
the center of the puzzle.
So far, puzzle masters Nancy
Pelosi and Chuck Schumer have been reasonably successful in their initial
rounds of piece placement. Their efforts produced passage of the important ARP package that the president signed into law on Mar. 11. Sen. Schumer succeeded in
the Senate’s passing the AJP on August 10. The AFP is stuck in both branches by
the Dems’ internal struggles. The process has a ways to go before a hoped-for
victory can be realized.
This puzzle-making process is
complicated. The Dems’ Progs and moderates have distinctly different ideas
about what’s best for the AJP and AWP as well as themselves. In no small part
because they likely will face different prospects for winning their Nov. 8, 2022
mid-term elections, depending on the BBB’s final construction and its public reception.
These elections are mentioned now in the media as if they will happen the day
after tomorrow. It’s actually 386 days from today.
The $1.2T AJP, primarily a physical
infrastructure component of the BBB, was passed by a bipartisan majority in the
Senate 69-30 and is now awaiting a contentious and delayed vote in the House. When
the White House first proposed the jobs plan, they budgeted $2.6T expenditures
to be spent over 8 years. Negotiations with Congress reduced this initial
budget by 46% to $1.2T. This budget apparently includes a mere $550 billion of
new funding, whatever that means. Many media outlets now further deflate the
AJP to a $1T effort; apparently for Congress and the media $200 billion (B) is
rounding error. After hearing these numbers, my sense is they’re at best
illusory until the president signs his name on the laws.
This significant budget deflation
in the AJP’s initial fiscal scope isn’t that unusual; it’s an almost normal
part of the thoroughly arcane legislative process as many expenditure bills
wind their way through multiple House and Senate committees to eventual floor
votes.
The Dems’ internecine struggle
between the Progs and their more moderate colleagues regarding the size and
focus of the AFP has occupied media headlines for several months. The Progs
outlined an initial budget of a utopian $6T for their family “infrastructure” support
plan. Such colossal largess never was in the minds of moderates, fearful of
their ensuing mid-term election chances. For a while now, the AFP has hovered
at $3.5T. Progressive Dems’ dreams about such fiscal bounty wax mildly euphoric even at this lower budget level.
Altogether, the BBB plan could total
$6.6T over the next decade. That is a lot of money, no matter how you dice it.
This sum represents $19,800 for each and every US adult and child. The plan covers
everything from free infant preschool and community-college tuition, expanded
Medicare/Medicaid coverage, new electric bike and increased electric vehicle
subsidies, much-reduced greenhouse gas (GHG) emissions to lots of things
in-between.
The scope of the BBB plan is so wide-ranging
that no one really knows its exact content, only its rough cost – to the
nearest hundred billion greenbacks or so. The White House Fact Sheets for the
AJP and AFP list 69 different activities these two programs will undertake.
Unfortunately, such dramatic
programmatic breadth is not accompanied by a comparably large margin for the
Dems’ congressional votes. They have no votes to spare in the Senate versus the
Repubs, and only 3 in the House.
This political headwind has struck
the Dems in the guise of Senators Joe Manchin and Krysten Sinema or as they’ve colloquially
become known, Sen. Mansema. Neither the AJP or AFP will become law without Mansema’s
two Senate votes.
Last week the thoroughly enigmatic
Sen. Sinema took a brief Parisian jaunt in the shadow of the Eiffel Tower,
despite there being no saguaro cactus but surrounded by sublime baguettes. Perhaps
her respite will provide perspective allowing her to explicitly state her AJP
objections.
Sen. Manchin laid down his
political Maginot Line on Oct. 14 when he said he was not in favor of the AJP’s
Clean Electricity Performance Program (CEPP). This program will provide
incentives for electric utilities to increase their annual investments in
renewable power sources, and penalties if they don’t. He also previously
mentioned he’d like to see the AJP’s budget reduced to below $2T. Reducing the
scope and spending for the AFP is thus a reasonable likelihood.
In response to Sen. Manchin, the
White House is seeking alternative mechanisms to reduce GHG, including creating
a carbon tax. Many economists have long supported a carbon tax, but it has
uniformly failed politically when attempted at the state level.[1]
It’s very hard to see how the administration could support such a tax when the
president has strongly vowed not to raise taxes on anyone making less than
$400,000 and given its singularly unsuccessful political history in the US. Talk
of a carbon tax as a CEPP replacement mostly signals desperation within the
administration.
Sen. Manchin’s complaint about
the CEPP is that it will suffer from a significant free-rider problem, expressing
that he has ”concerns about using taxpayer dollars to pay private companies to do
things they’re already doing.” I suspect Sen. Manchin’s free-rider criticism is
mostly a red herring about green energy policy, given that bituminous coal runs
through his veins.
A growing number of regulated
electric utilities have increased their green power production because of
state-mandated Renewable Portfolio Standards, not federal rules. However, only
38 states have such standards currently.
Last year, renewable power
accounted for 20% of US electric power generation, an all-time high, but still
just one greenish kWh for every five brownish ones produced. The CEPP will provide
uniform, nation-wide incentives and penalties for expanding green/renewable
power’s share of national electricity production.
I’m surprised the president folded
so soon against Sen. Manchin; he should call Sen. Manchin’s bluff on the CEPP. Without
the CEPP, the AJP will suffer diminished projected GHG emission reductions by
as much as 33%. That would represent a significant tragedy of the capitol
commons and beyond in the real US. If the White House agrees to remove or curb the
CEPP in order to pass the AJP, it will also complicate President Biden’s
discussions at the up-coming UN Climate Change Conference (COP26) in Glasgow,
Scotland.
There’s no doubt that furious
closed-door brokering of alternative specifics for the final AJP and AFP will
continue on the Hill and the White House for a while longer. Several pieces of
the BBB puzzle have yet to be placed on the table. I hope the Dems understand
that outlaying ever-larger funds to government agencies does not necessarily
mean citizens’ lives will be ever-better or ever-more equitable. Because of
their scope, these programs will be subject to hefty amounts of unintended
consequences. From their outset, these programs must be appreciated as successful
and effective or blowback will hamper the Dems.
It’s worthwhile remembering that
the total federal budget for last year (FY2020) was $6.6T, the same dollar
amount that the BBB is hoping to spend additionally over the next 8-10 years.
Enlarging the federal governments’ duties – and consequent amplification of
state and local government activities – needs to be done effectively.
Recent expansions in such obligations
have been shaky, include those providing child care and rent relief payments. Fewer
than 60% of families with incomes less than $25,000 properly received their due
monthly child benefits. California barely managed to distribute less than 2% of
its $5.2B of federal rent relief funds during the program’s first 3 months last
year. The CA agency responsible for providing this benefit cited problems with
its anti-fraud procedures. Perhaps the agency believed if it provided an all
too slender amount of relief funds to qualified applicants, they would not have
to worry as much about fraud? Such shoddy implementation results in exasperation,
as well as the public’s downgraded view of government competency.
Unfortunately, there’s been
little if any discussion about how the proposed panoply of significantly large benefit
programs in the BBB will actually be implemented. Polling shows that the
administration’s wobbly implementation of several recent programs is one factor
that has just reduced by more than 20% the public’s support for having the
government “do more to solve the nation’s problems.”
This is not good news for the
Dems. The institutional stress on public agencies that will have
responsibilities for successfully administering these giant, complex programs
will be immense.
Dems, particularly Progs, would
be wise to head such forewarnings. The Dems require strong, positive public
support to extend and broaden their big BBB programs. This can happen by reducing
the number and/or scope of several BBB programs, allowing each one to receive
relatively more funding and attention, even if the top-line budget is reduced
as it likely will be.
Although a majority of the public
has all too little knowledge about specific BBB programs, recent polls say the
most popular AFP programs are universal prekindergarten and reducing Medicare
drug prices, the least popular is free community college.
Assembling the BBB puzzle will
take insight, care and modesty. The Dems should remember Shakespeare’s Learian
lament that demanding perfection can result in gaining next to nothing. They
should consider fewer BBB programs to do better, not all of them and do worse.
[1]
Failures include two ballot attempts by the State of Washington to initiate a
carbon tax. Several other states have proposed carbon taxes, none have been
implemented. The city of Boulder, CO initiated a local carbon tax in 2006; it’s
still in effect. A federal carbon tax is regularly proposed in the Congress,
but no formal carbon tax legislation has ever passed.
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