Mon. Dec 6th, 2021

It took last week’s election shock in Virginia to unblock the Democratic Party’s internal blockade. Friday night’s portion of the dual $ 1.2tn infrastructure account delivered a remarkably upbeat ending to the gloomiest week of Joe Biden’s presidency. The prospect of passing it too $ 1.75 ton “builds back better” bill by Thanksgiving will provide more good news for the beleagured president. Nothing succeeds like success, as the saying goes.

The smaller bill passed a few hours after the most encouraging job report in months – with more than half a million added to payrolls in October. If the recent reduction in Delta infections continues, the US economy is likely to be in a strong position in the run – up to next year’s congressional elections. Although history and recent polls are not on Biden’s side, no iron law says a incumbent’s party should lose control in the president’s first term. George W Bush repelled this trend in 2002.

Political relief set aside, it will take more than one Infrastructure Bill to change this president’s fortunes. By some measures, it is the largest public infrastructure upgrade since Dwight D Eisenhower’s presidency in the early Cold War. The bill includes $ 550 billion in new spending over a decade, making it somewhat less dramatic than its prime number.

Nevertheless, the impact of new money on U.S. roads, railroads, ports, rural broadband, water supply and the expansion of an electric car charging network will begin to be felt early next year. Although it is mostly funded by accounting gimmicks rather than higher taxes, the impact of the bill will help alleviate US inflationary pressures by reducing supply bottlenecks. It will therefore help reinforce the US economy’s post-pandemic recovery.

Passage of the larger bill, however, is far from assured. Unlike the infrastructure package, which was supported by 13 Republican senators, building better is a purely democratic issue. Even then, it will be a struggle to ensure Democratic unanimity, which is required to accept anything in the 50:50 Senate.

Objections from centrists have denied the bill some of its key features, including tightening authority for the Internal Revenue Service to combat tax evasion, new powers for Medicare to negotiate lower prescription drug prices, the right to paid family and medical leave, and tax increases on the upper income groups.

What remains is less than half of the original account and significantly less transformative than the initial promise. It will continue to provide a boost to middle-class families, and women in particular, by funding universal early childhood education and extending child tax credit. That should lift America’s anemic female labor force participation rate by reducing the often crippling burden of childcare. Again, such measures are disinflationary.

The bill will also provide the largest investment in renewable energy in U.S. history. Although stripped of its most efficient provision for climate change, which would have accelerated the electricity sector’s transition to fossil fuels, what remains is substantive.

Would that be enough to put Biden back on track? Since he aimed his credibility at passing both bills, it would be difficult to imagine him doing so without passing the second bill. Biden’s approval ratings began to decline in August during the withdrawal of troops in Afghanistan, which hit its claim to capability. Rising inflation, higher murder rates and a 10-year high in illegal border crossings have fueled public unrest. The best response to voter dissatisfaction is action. Implementing major legislation is exactly what Biden needs to do.

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