Instead of pushing a single colossal spending bill through Congress, President Joe Biden’s advisors are reportedly expected to present a proposal this week that includes $3 trillion in spending aimed at boosting the economy and fighting climate change through separate legislative pieces.
The New York Times first reported that Biden’s economic advisors plan to recommend as much as $3 trillion to narrow economic inequality, reduce carbon emissions, and improve American manufacturing, beginning with an infrastructure bill. They cited people familiar with the plan, along with documents outlining its provisions.
The documents said the proposed package would spend heavily on infrastructure improvements, with nearly $1 trillion in spending alone for roads, bridges, electric vehicles, and more.
The second plan would be people-focused and spend heavily on education and programs to increase the participation of women in the labor force, including free community college, universal pre-K education, and a national paid leave program. Those elements are targeted at encouraging people to reenter the workforce and strengthen the overall economic recovery.
Administration officials said that while details on funding for the package are not yet determined, it might be financed by tax increases on the wealthy. Biden has already indicated that he would include a federal tax hike on high earners in his next big economic package, which would be the first major federal tax hike in nearly three decades.
Insider’s Juliana Kaplan reported Monday that Biden is likely to look at tweaks to the current tax code, instead of a new tax targeting wealth.
But whether Republicans will support one big bill, or a series of legislative pieces, depends largely on funding, and Republican lawmakers have already indicated they will not support a tax hike on the rich.
“I don’t think there’s going to be any enthusiasm on our side for a tax increase,” Senate Minority Leader Mitch McConnell told reporters last week. The Republican opposition to tax increases could prompt Democrats to bypass the GOP using reconciliation, the same tactic used to enact the $1.9 trillion stimulus law, but passing it more piecemeal could win bipartisan approval for certain aspects of the spending.
Groups of lawmakers from both parties have already met with Biden to discuss an upcoming infrastructure bill.
Democrats, like Rep. Peter DeFazio, the chair of the House Transportation and Infrastructure Committee, suggested using reconciliation in a CNBC interview to pass the next bill, but Rep. Sam Graves, ranking member of the House infrastructure panel, said in a statement that it “cannot be a ‘my way or the highway’ approach like last Congress.”
Moderate Democratic Sen. Joe Manchin said in an “Axios on HBO” interview that an infrastructure bill could be as large as $4 trillion if it’s funded by tax hikes but that he would not support reconciliation.
“I’m not going to do it through reconciliation,” Manchin said. “I am not going to get on a bill that cuts them [Republicans] out completely before we start trying.”
The White House did not immediately respond to Insider’s request for comment.
The historic $1.9 trillion American Rescue Plan just passed the House of Representatives for a second time, sending it to President Joe Biden’s desk to be made law as soon as this week.
The package is the first major legislation of Biden’s presidency – and it enjoys widespread support. A new Morning Consult poll found that 75% of voters support the package, including 59% of Republicans. In fact, poll after poll has shown the popularity of going big with the package.
Since he emerged as a serious candidate for president in 2016, Sanders has loudly advocated for the United States to join the ranks of developed countries that have embraced social democracy.
The stimulus is chock-full of social-democratic ideas: Putting cash into Americans’ pockets, beefing up their unemployment benefits, and providing a child tax credit, to name just a few.
Although Sanders defines himself as a Democratic Socialist, there’s a big difference between “socialism” and social democracy, as the developed countries Sanders admires so much include pro-market democracies, often Scandinavian ones.
“I think we should look to countries like Denmark, like Sweden and Norway, and learn what they have accomplished for their working people,” Sanders said in a 2016 CNN debate.
The final American Rescue Plan does indeed echo some of those countries.
So it’s not surprising then that Sanders has thrown his support behind the legislation, calling it the “the most significant piece of legislation to benefit working families in the modern history of this country” in a tweet.
In fact, FDR’s “New Deal” agenda of the 1930s was a sea change in American politics, injecting the government into American life in unprecedented ways. But it stopped short of establishing a modern welfare state along the lines of those that emerged in Western Europe. Democrats tried again under President Lyndon Johnson’s “Great Society” of the 1960s, but that also fell short of the party’s dreams amid social unrest and the Vietnam War.
Sanders, now the chairman of the Senate Budget Committee, has led a generation of progressives in seeking to rekindle FDR-sized ambitions in the party. At least one economist has called for a “New New Deal” to address the pandemic’s recession and economic devastation. It’s not the first time the New Deal has been evoked in modern politics. Leading progressive Rep. Alexandria Ocasio-Cortez named her plan to address climate change the “Green New Deal.”
For some Western European countries, that idea is already a reality: Germany and Sweden both have universal child benefits and Luxembourg boasts a monthly family allowance, while Denmark has a slightly lower quarterly one.
Another provision, as reported by The Washington Post, is $5 billion to disadvantaged farmers, something Black farmers stand to benefit from.
An analysis from the Tax Policy Center found that the bill could ultimately give the poorest 20% of Americans a 20% boost in income.
Some major progressive initiatives are still missing from the package
A federal minimum wage hike (which would’ve been the first one since 2009) didn’t make it into the package. It’s something long championed by Sanders, and an issue Biden ran on as well, but Biden and Senate Democrats ultimately respected the parliamentarian’s decisionnot to include it in the Senate version of the bill.
There’s also the issue of student-loan debt relief. The legislation includes a tax exemption on student-loan forgiveness through 2025, which could set the stage for student loan forgiveness. But while leading Democrats – including Senator Elizabeth Warren – have called for $50,000 in student loan forgiveness, Biden has said he may cancel up to $10,000.
The package also contains an important provision for unemployment, extending it through September, but cutting it from $400 to $300.
Millions of Americans will no longer live in poverty because of the act, according to a new analysis from the Urban Institute. That study finds that the plan would reduce the projected annual poverty rate in 2021 by over a third – meaning that the number of Americans living in poverty would shrink by around 16 million people.
“This legislation is about giving the backbone of this nation – the essential workers, the working people who built this country, the people who keep this country going – a fighting chance,” Biden said in a statement.
He added: “On Friday, I look forward to signing the American Rescue Plan into law at the White House – a people’s law at the people’s house.”
Americans across the nation have been watching in horror as frigid conditions have cut power to millions of Texas homes and thrown people into desperate circumstances. They’re now wondering: Could that happen here?
The answer is “yes.” Texas faced a similar winter energy crisis in 2011. Just last year, California cut power to millions of people to prevent wildfires sparked by live power lines. Floods and hurricanes have disrupted power supplies for many Americans in recent memory as well.
The hard truth is that our energy system is more fragile than it should be. With climate change bringing more extreme weather, that’s only likely to get worse. In order to prevent a catastrophe, we need to fix three key vulnerabilities in our current system.
First, we’re dependent on too few centralized power plants that produce most of our energy, and we rely on transmission lines to carry it long distances to our homes. Problems with just a few of those power plants or transmission lines can quickly affect millions.
Second, extreme weather events are becoming more frequent. The infrastructure we built 30 or 50 years ago isn’t equipped to handle more common or severe deep freezes in Texas, increasingly abundant wildfires in the West, or today’s wetter, more powerful hurricanes.
Third, our energy system’s dependence on fossil fuel is adding more climate change-causing pollution to our air, which will cause even more extreme weather in our future. And as the events in Texas showed, fossil fuels can be unreliable when you need them most.
What happened in Texas should be a wake-up call, and it must spur elected officials, regulators and utility companies to build a better and more resilient system.
Preparing for the next Texas-sized disaster
What might a more resilient energy system look like? And how do we make this a reality?
First, US communities need to produce more of our power locally, and redesign the grid so that problems in one area are less likely to cause outages far, far away. Rooftop solar, energy storage technologies such as batteries, electric vehicles, and community “microgrids” all have a role to play.
Rooftop solar panels can be a difference-maker in extreme weather because they produce energy very close to where we use it. Meanwhile, more batteries in our garages, basements, or in our electric vehicles, allow us to store energy for later. Local energy generation also allows us to actually use much more of the power we produce, since at least 67% of the power we generate from fossil fuel power plants is lost through escaped heat and we lose even more when that power has to travel long distances over inefficient lines.
Another way to build energy resilience is to use less energy in the first place. Energy efficiency improvements can reduce stress on the grid at times of high demand, and better-insulated homes, schools and offices are more comfortable in any weather.
State leaders could cut energy waste by requiring utilities to hit energy-saving targets by helping their customers use power more wisely. The utilities can use a medley of approaches, including behavioral programs that put smiley faces on the bills of the most efficient customers, rebate programs for efficient appliances such as electric heat-pumps, and giving customers access to free energy audits, weatherization services and low-cost financing.
Paradoxically, even as we produce and store more of our energy locally, we should reinforce our ability to share electricity across the country. Texas’ standalone grid left it unable to receive sufficient help from other parts of the country as its own power plants were going offline. Even the most self-sufficient areas will need to get help sometimes – and that’s what good neighbors do.
From wildfire-ravaged California to hurricane-hit Puerto Rico, utility planners are learning from their experiences. They aren’t blindly replacing the same flawed centralized energy systems. Instead, they are deciding to daisy-chain together local microgrids, heavily powered by solar, which can function independently and as a network. Under this set-up, if there’s a problem in one area of one local network, it stays contained, and those who have surplus power can come to the aid of areas that have high demand.
Let’s be clear: improving the resilience of our energy system also requires moving away from fossil fuels. Renewable energy is necessary to reduce the disruptive impact of climate change, and studies have shown that it is possible to build an energy system that runs on clean energy and keeps the lights on. And, unlike fuels such as gas and coal that are inherently finite, renewable energy sources will always, well, renew.
As 29 million people huddle in the cold in Texas trying to keep warm, governors, state lawmakers, and regulators should pay close attention to what went wrong, and recognize that simply doubling down on the same failed approaches that put the state at risk will only serve to set us up for the next disaster. A cleaner, safer, more resilient energy system is possible. With smart planning and decisions, we can make it a reality.
Johanna Neumann is the senior director of Environment America’s Campaign for 100% Renewable Energy. Environment America is a national network of 29 state environmental groups with members and supporters in every state.
President-elect Joe Biden appeared to acknowledge environmental “activists” in his statement commemorating the five-year anniversary of the Paris Agreement but did not mention the Green New Deal.
Biden, in the statement released Saturday, reaffirmed that the US “will rejoin the Paris Agreement” when he steps into office and identified goals to address climate change and environmental issues, including achieving “net-zero emissions no later than 2050.”
“We’ll listen to and engage closely with the activists, including young people, who have continued to sound the alarm and demand change from those in power,” the statement said.
Although his statement referred to “activists,” Biden did not mention the Green New Deal, which has been rallied by young climate activists like those in the Sunrise Movement. The group last month protested alongside Ocasio-Cortez and Markey in front of the DNC headquarters pushing for the incoming Biden administration to keep his commitment to address climate change, The Guardian reported.
A spokesperson for the Biden-Harris transition team did not immediately respond to Business Insider’s request for comment.
Prior to the election, Biden stopped short of fully adopting the “Green New Deal,” and instead noted in his plan for climate change that “the Green New Deal is a crucial framework for meeting the climate challenges we face.” Meanwhile, the “Biden-Harris plan” for climate change, shared on the Biden-Harris transition website, also makes no note of the Green New Deal.
“Some elements have a good chance of passing,” Ocasio-Cortez said via her Instagram. “Others are a toss up (like ending fossil fuel subsidies) and others almost definitely won’t (for example GND makes a nod to Medicare for All.)”
Meanwhile, depending on the outcome of the upcoming Georgia senate runoffs, Biden could be the first president since George H.W. Bush to step into office without his party controlling both chambers of Congress. Progressive climate activists have expressed skepticism that this may pose a barrier to implementing Biden’s climate agenda, Business Insider’s Eliza Relman reported.
Without that, the upper chamber would stay under GOP control, and “we don’t have the power of the purse in the same way,” a progressive climate activist told Business Insider.