Biden, like most new presidents, will get his shot at economics

Biden, like most new presidents, will get his shot at economics
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The new president's economic priority causes political controversy, forcing modifications to pass it along partisan lines.

Sure, that's Joe Biden today — but it also was Ronald Reagan in 1981, Bill ClintonWilliam (Bill) Jefferson ClintonBiden is thinking about building that wall — and that's a good thing Boehner on Clinton impeachment: 'I regret that I didn't fight against it' 'Matt Gaetz wants to date your child' billboard appears in Florida MORE 12 years later, and then both George W. Bush and Barack ObamaBarack Hussein ObamaBiden is thinking about building that wall — and that's a good thing White House races clock to beat GOP attacks On North Korea, Biden should borrow from Trump's Singapore declaration MORE.

That's the way it works, no matter the frustration of those kumbaya Republicans, some editorialists and a handful of Democratic skeptics. Give the new guy a shot; we can come back, if necessary, and fix it.


President BidenJoe BidenFederal Reserve chair: Economy would have been 'so much worse' without COVID-19 relief bills Biden to meet Monday with bipartisan lawmakers about infrastructure Jill Biden gives shout out to Champ, Major on National Pet Day MORE's $1.9 trillion COVID relief/stimulus has flaws. And there will be intense struggles — among Democrats — in the next several weeks, over the exact size and shape, whether any relief goes to undocumented workers and whether to include an increase in the minimum wage.

This will be done without Republicans, who never were seriously bargaining; last month's GOP alternative was too small to meet the current challenges. The Democratic left also has engaged in its share of misrepresentations.

The recent history is instructive.

The Reagan tax cut-focused proposal, the centerpiece his campaign, was opposed by Democrats who decided they could outbid the president. The White House smartly decided to raise them. The result was a huge tax cut.

The GOP contention that those tax cuts worked is undercut by the fact that in each of the next three years the Republicans, led by Senate Finance Committee chairman Bob Dole, approved tax hikes to alleviate the excess. These were considered necessary, although, in a cheap shot, Newt GingrichNewton (Newt) Leroy GingrichMORE, accused Dole of being the “tax collector for the welfare state."


The Democratic left has its distortions. They repeatedly warn not to make the same mistake made by Barack Obama in 2009, when during the financial crisis, he went too small. There was a reason he didn't go bigger: There weren't the votes. It was a stretch to get a little over $800 billion. Republican cooperation was a tease then too; the night before the House approval, White House chief of staff Rahm Emanuel met with 11 congressional Republicans — to no avail: It was a party line vote.

The left also complains about the special attention accorded to moderate Sen. Joe ManchinJoe ManchinBiden to meet Monday with bipartisan lawmakers about infrastructure Biden is thinking about building that wall — and that's a good thing Buttigieg on exaggerated infrastructure jobs estimate: 'I should have been more precise' MORE (D-W.Va.); well, in a 50-50 Senate, that shouldn't be hard to understand. In 1993, the Clinton administration's initial success depended on one reticent Democratic Senator: Bob Kerrey of Nebraska.

Rep. Alexandria Ocasio-CortezAlexandria Ocasio-CortezNew York City's suicide mission should alarm the entire nation Marjorie Taylor Greene rakes in over .2M in first quarter The strategy Biden needs to pass his infrastructure plan MORE (D-N.Y.) criticized Biden for reneging on a vow to provide a $2,000 per person stimulus check by only proposing $1,400. A little math: Six weeks ago Congress passed $600 per person; Biden's proposed $1,400 takes it up to $2,000.

The most substantive critique of the Biden plan ironically came in a column by the eminent Democratic economist Larry Summers. The former Treasury Secretary worried the size of the proposal risked setting off new inflation and crowded out other important domestic investments.

Some of this may reflect personal pique: Caving to pressure from the Sanders-Warren wing's complaints, the Biden campaign foolishly cut him out of an advisory group. Left of center, Summers is one of the smartest policy thinkers on the planet. His column and subsequent defense of it may have been unwise politically, but the substantive points he makes are worthy of debate.

I wish the Biden team had more seriously considered the suggestion of Obama economist Jason FurmanJason FurmanBiden, like most new presidents, will get his shot at economics Our rebounding economy doesn't need more stimulus checks Republicans now 'shocked, shocked' that there's a deficit MORE — in the same IQ league as Summers — for a smaller package but with automatic stabilizers on issues like extended jobless benefits and aid to state and local governments. If the virus were under control and the economy humming in September, they wouldn't kick in; if we’re still struggling, they would.

Two of the thorniest issues are more political than economic. One is whether any relief assistance goes to undocumented workers; the likely result will be it goes to anyone with a social security number, which includes American-born children of undocumented workers. Republicans like Sen. Tom CottonTom Bryant CottonMcConnell, GOP slam Biden's executive order on SCOTUS Overnight Defense: Biden proposes 3B defense budget | Criticism comes in from left and right | Pentagon moves toward new screening for extremists POW/MIA flag moved back atop White House MORE (R-Ark.) would still demagogue against assistance for these children.

The other is boosting the federal minimum wage to $15 from $7.25 an hour. The Senate parliamentarian may rule this doesn't meet the rules under which the bill is being considered — specifically that any measure has to directly affect spending or revenues. It'd be a mistake for Vice President Harris, the Senate's presiding officer, to brush aside any ruling. Some liberals say they won't take a more modest increase to $11 an hour, which is about all they're likely to get.

About a month from today, Congress will pass the relief legislation; I'd guess a little more than $1.7 trillion. If all is going well in six months, it'll be hailed as a success. If not, a failure.

That's the regular order of economic politics.

Al Hunt is the former executive editor of Bloomberg News. He previously served as reporter, bureau chief and Washington editor for the Wall Street Journal. For almost a quarter century he wrote a column on politics for The Wall Street Journal, then The International New York Times and Bloomberg View. He hosts 2020 Politics War Room with James Carville. Follow him on Twitter @AlHuntDC.