If Manchin means what he says, he should vote for the Democrats’ spending plan
Sen. Joe Manchin (D-W.Va.) has not been shy lately. On everything from the filibuster to voting rights, Manchin has taken very public stands in opposition to the overwhelming majority of his party. Most recently, he called on Democrats to “pause” their push for a bill that would spend a total of $3.5 trillion on public investments. He is not against it in principle, he says, but he worries that it is being rushed. Hence the call merely to pause.
People can be forgiven, however, if they think they are hearing more of a “no” than a “maybe later” from the West Virginian. He has opined in print and gone on talk shows and said flatly that $3.5 trillion is too much. There is, however, reason to hope that Manchin means it when he says that he is open to good-faith arguments in favor of the Democrats’ bill. If he is, those arguments will be impossible to deny.
Part of the problem in figuring out what Manchin is truly thinking is that he finds it politically useful to speak in sound bites that a less forgiving audience could mistake for empty cliches. He talks about spending “trillions upon trillions” of dollars, for example, and he publicly frets that such spending will ignite inflation. Manchin would have us think that this new plan is a rush to suddenly dump trillions more dollars onto an economy that is already awash in largesse.
But none of that is true. Not even close. Happily, however, the true story is exactly what Manchin says he wants.
Although it is usually described as a $3.5 trillion bill, few people bother to point out that the funds would be spent not in one year but over the next decade, during which time the economy is projected to produce about $288 trillion dollars of goods and services. If the spending bill is “trillions and trillions,” then gross domestic product over those 10 years will be “trillions and trillions and trillions and… .” Moreover, the bill itself covers roughly half of its cost with progressive tax revenues.
This is not a stimulus bill and it is not big enough to overheat a still-staggering economy in the short run or the long run. If those were Manchin’s only concerns, we would be home free.
Again, I am stipulating here that Manchin means what he says. Once one moves past the political sloganeering and the misleading arithmetic, his only serious concern – which is where the “pause” comes in, a strategic pause, no less – is that we simply do not know whether the money that Democrats want to spend will have a positive effect on the economy.
And here is the key to Manchin getting what he wants. In an op-ed earlier this month, he wrote that, “We must allow for a complete reporting and analysis of the implications a multitrillion-dollar bill will have for this generation and the next.” That is, he asks the very good question that all policymakers should ask about this kind of bill: Is it investment or is it merely live-for-today consumption — or worse, pure waste?
If it is investment, Manchin would seem to be on board. After all, if I knew that, say, I could borrow $100,000 and use it to buy an investment that would more than cover the principal and interest on my loan, my children would know that my savvy decision had just increased their net inheritance. They would not say, “But you borrowed money and that’s always bad!” Instead, they would say, “Thanks for smartly leveraging the opportunity to make us richer years from now. You’re not as out of it as we thought you were!”
So Manchin is asking the right question: Is a bill that is touted as an investment plan actually going to be used for investment spending? And if the proposals in the Democrats’ bill were brand new ideas that had never been proposed or studied, Manchin would be right to say that we should take the time to be sure about what we are doing.
The good news — no, the great news — is that we already know that the Democrats’ proposals are winning investments. Economists and other policy analysts have spent decades studying the effects of various types of public investments and it turns out that investments in people are even better than investments in roads and bridges, as important as those are, too.
This country has underinvested in people, especially children, for so long that almost everything we could spend money on is low-hanging fruit. Even estimates at the low end of the return on spending for early childhood education, for example, show that $1 spent today returns at least $4 in the future, though there are some estimates that run as high as 1-to-12. And that is just one element of the spending in the Democrats’ bill.
We know that spending on roads is good for the economy in part because it allows people to spend less time getting to and from work. We also know that allowing workers to spend less time dealing with their children’s day care needs is good for the economy, which means that the caregiver support provisions in the Democrats’ bill are simply good economics, not “mere” social policy.
There was a time when we did not know that taking time out of the day for “mental health breaks” would actually increase our productivity at work. Now we do. Similarly, there was a time when we did not yet know that malnutrition during childhood caused cognitive problems that harmed the economy in the future. Now we know that, too, so it is smart economics to spend money today to allow children to grow up to become fully functioning, productive adults.
If Manchin means what he says, then, the best available research tells us that the spending in the Democrats’ bill will do exactly what he wants it to do: improve the economy and help future generations. There is no need to pause. The research is already done and the answers are clear. You should take “yes” for an answer, Senator!
Neil H. Buchanan is an economist and law professor who holds the James J. Freeland Eminent Scholar Chair in Taxation at the University of Florida.