Not So Fast on the Biden Jobs Plan Act—Let’s Get It Right by J.E. Dean

In the next few weeks, a lot will be written about President Biden’s American Jobs Plan Act. This $2.3 trillion bill is omnibus legislation intended to address a variety of national problems. These problems include our crumbling infrastructure, climate change, underpayment of workers who care for seniors, and the need to be more competitive with China. To pay for solutions to these problems, the bill also raises taxes for “big corporations” and for “wealthy individuals.”  

A draft of the bill does not yet appear to be available. When it surfaces, it will be yet another 800-page monster, the type of bill that our elected representatives tend to vote for or against without reading all of it. And because Republicans are already lined up against the bill, primarily because of the size of the spending and the imposition of new taxes, civil, bipartisan debate of the type that can lead to improved legislation is unlikely to occur. 

Democrats are likely to use a legislative process known as “reconciliation” to try to pass the bill in the Senate despite the 50-50 split between the parties. It is hard to fault Majority Leader Schumer for resorting to this approach given no signs of any Republican compromise. The reconciliation process, however, was not intended to facilitate the passage of massive new programs. As a result of the availability of this “legislative shortcut,” incentives for Democrats to work with Republicans are eliminated or at least reduced.  Schumer’s likely decision to use reconciliation also will “justify” Republicans simply voting against the bill and hoping that once it gets enacted, problems with it will surface.

“Problems” are likely if a bill of the size and complexity of Biden’s proposal, including dozens of new programs, is enacted. It is hard to get dozens of new spending programs “right” when they are all enacted and funded at the same time. The new spending in the bill could also trigger inflation. If it does, will additional “emergency” legislation be needed to clean up the mess?  And what if Republicans are right that raising corporate taxes will decrease rather than increase American competitiveness?

Based on what we know now about what is in the bill and how Congress will consider it, asking questions is warranted. Not asking questions is irresponsible. Because of the size of the bill, which will be followed by a third trillion dollar plus bill, asking questions is imperative. And if acceptable answers are not found, changes should be made, or enactment of the legislation should be reconsidered.

Dozens of questions should be explored regarding the bill. Here are a few examples:

At the top of the list is “Will this bill trigger inflation?”  There are no simple answers here. Modern Monetary Theory, or MMT, suggests that it may be possible to address pressing priorities such as climate change, infrastructure, and social justice and not trigger inflation.  Others are not so sure. Reducing the risk of igniting inflation means reducing the cost of the bill or finding trillions of dollars in new taxes. Given the unlikelihood of enactment of the full Biden tax plan, a reasonable compromise might be to pare down the bill, something progressives will not like.

Do the electric vehicle provisions in the bill, with a price tag of $174 billion, make sense? The bill calls for more funding to promote electric cars than to repair bridges and roads. ($115 billion).  Given that multiple manufacturers already are aggressively entering the electric car market, do we need the Federal government to build charging stations? The summary of Biden’s proposal includes the point that workers building the cars must receive a good wage. How do you make that happen? The bill also states that low-income people should have the wherewithal to drive electric cars. Do you force manufacturers to sell these electric cars at affordable prices or subsidize them?  In either case, does this make sense given the entire car market already is heading towards electrification?

Other questions relate to the diverse programs that look like campaign promises being fulfilled. A case in point:  Provisions in the bill proposing $400 billion to support improved elder care. A major part of this proposal is to raise wages for home health workers serving seniors. While it is unclear how the bill would accomplish this other than by giving states and local governments money to subsidize wages, the bill also requires that home health workers get the right to union organization. Many of us support unions, but the summary of the bill makes it sound as though these workers might not have a choice not to join a union. That may not be good for the workers, but why pick a unionization fight in a spending bill?  Maybe this fight should have been fought elsewhere?

Mark Twain once said, “He who asks is a fool for five minutes, but he who does not ask remains a fool forever.”  I do not want to feel foolish if the American Jobs Plan proves to be a mistake. Support for repairing our infrastructure, addressing climate change, and promoting racial and social equity should not be mistaken as a license to pass massive legislation without doing everything possible to “get it right.” 

J.E. Dean of Oxford is a retired attorney and public affairs consultant writing on politics, government, domestic policy, and occasionally goldendoodles.