The instructive popularity of Biden’s ‘New Deal’ for the middle class
What President Biden’s gigantic new spending plans amount to is a New Deal for the Middle Class.
There are two kinds of government spending — public works and social welfare. Public works spending involves benefits that are available to everyone and that people cannot provide for themselves — things like a clean environment, strong national defense, fast highways, convenient airports and good schools. Social welfare spending is targeted by need. It helps disadvantaged people get things that people who are better off are able to provide for themselves, such as food, housing and health care.
Public works spending is much easier to sell politically, as long as people see a genuine need. Former President Trump horrified many conservatives when he talked about an ambitious program of public works — but it probably had little to do with his ideology (he didn’t really have one) and more to do with his megalomania. Trump very likely saw infrastructure the way Roman emperors saw arches and coliseums — as a tribute to himself.
President Biden’s public works program has a strong social welfare component: not just traditional improvements like roads and bridges, but also investments in the work force, including proposals for paid family and medical leave for workers, child care, universal pre-kindergarten and free community college.
Those sound like classic social welfare programs aimed at helping the poor. The Biden Administration argues that they are aimed at helping the struggling middle class by improving job skills and facilitating greater labor force participation, particularly for women. Today, unlike 50 years ago, families need two wage earners to maintain a middle class standard of living.
Diane Lim, who writes the Economist Mom blog, told the Washington Post, “Republicans say these program are just social welfare spending and that’s wasteful. The way to push back on that is to explain that there’s a lot of supply-side human capital that will be freed up if caregiving is subsidized.” As it is in other major industrial countries.
The overwhelming majority of Americans call themselves middle class. What do they mean? Ask them. (I have.) They say, “Neither rich nor poor.” A voter put it this way: “If I know I’m not rich and I don’t think I’m poor, I must be middle class.” That self-definition has powerful political implications.
Middle class people are suspicious of government programs that are explicitly aimed at helping the poor, like Lyndon Johnson’s War on Poverty in the 1960s: “If these programs are aimed at helping the poor, they won’t help me.”
At the same time, middle class Americans tend to be O.K. with taxing the rich. The rich are “not me.” Hence Biden’s insistence that he won’t raise taxes on people earning less than $400,000 per year. Middle class people know “That’s not me” either. FiveThirtyEight reported on April 30, “Any way you slice it, all of Biden’s economic proposals — and his mechanisms for paying for them — are popular.”
Biden’s policies are clarifying the difference between the two parties. Since at least Ronald Reagan, Republicans have rallied behind the idea that the president’s main job is to promote economic growth. If the economy is growing, people can solve problems for themselves; they don’t need government to do that.
Back in the 1988 presidential campaign to elect Reagan’s successor, Democrat Michael Dukakis spent a lot of time talking about “the middle class squeeze.” Dukakis’s answer was more government programs. He seemed to be saying to voters, “You’ve got a problem? We’ve got a program.” Dukakis had a program to deal with college tuition expenses, a program to help with child care costs, a program to provide health insurance for all employees and a program to encourage affordable home mortgages. Many of them were cleverly designed to be “self-financing.”
Republican candidate George H.W. Bush, Reagan’s vice president, said to middle class voters, “You’re in a financial squeeze? Here’s what we’re going to do for you. We’re going to keep this economic recovery going.” It worked. In 1988, middle class voters didn’t want programs. They wanted prosperity.
Bottom line? Republicans believe economic growth is sufficient. Democrats believe growth is necessary but not sufficient.
We’ve learned in the past 20 years that growth alone can worsen economic inequality and leave disadvantaged groups even farther behind.
That’s where government comes in. In his speech to Congress, President Biden talked about public investment in infrastructure, education and scientific breakthroughs in space and in medicine — investments that only the government can make. He promised that a better educated work force with more working women and minorities would make the country more productive and more competitive. It wasn’t just social welfare. It was investment in human capital.
In the Republican rebuttal to Biden’s speech, Sen. Tim Scott (R-S.C.) accused Biden of dividing the country: “The actions of the president and his party are pulling us further and further apart.” That may be true of some of Biden’s policies, but it is not true of his temperament. President Biden’s speech to Congress was not all about himself. The president spent no time attacking his critics. In a Morning Consult-Politico poll taken after 100 days in office, 53 percent of the public said President Biden has done more to unite the country, while 35 percent said he’s done more to divide it. Unlike you-know-who.