I will leave the wise political analysis to others. I don’t know why Senator Joe Manchin apparently decided to go back on an explicit promise he made to President Joe Biden. Naively, I thought that even in this age of breaking standards, honoring a deal you just made would be one of the last standards to be met, as a reputation for keeping your word when given is useful even to very cynical politicians. I’m also not sure what, if anything, can be saved from the Build Back Better framework.
What I do know is that there will be huge human and, yes, economic costs if Biden’s moderate but crucial spending plans are abandoned.
Failure to adopt a decent social program would condemn millions of American children to poor health and low incomes as adults, because that’s what growing up in poverty makes. It would condemn millions more to inadequate medical care and financial ruin if they fell ill, as this is what happens when people do not have adequate health insurance. It would condemn hundreds of thousands of people, perhaps more, to unnecessary disease and premature death from air pollution, even without the increased risk of climate catastrophe.
I am not speculating here. There is overwhelming evidence that children in low-income families who receive financial assistance are healthier and more productive than those who do not when they become adults. Uninsured Americans often do not have access to necessary medical care and face unaffordable bills. And studies show that policies to mitigate climate change will also deliver major health benefits from cleaner air over the next decade.
By the way, it’s not clear how many Americans realize how far behind other nations we are in meeting basic human needs. For example, I still meet people who think that we have the highest life expectancy in the world, when in reality we can expect to live between three and five years shorter than the citizens of most countries. European countries.
There are also, by the way, large and growing gaps between US states. In 1979, life expectancy in West Virginia was only about 14 months shorter than in New York; by 2016, the gap had widened to six years. And yes, Manchin’s home state would benefit enormously from the social spending his Democratic senator seems determined to block.
The weakness of the American social safety net also has economic consequences. It’s true that we still have a high gross domestic product per capita – but that’s largely because Americans take far fewer vacations than their overseas counterparts, which means they produce more because they work more hours. In other ways, we are lagging behind. Even before the pandemic, Americans in their early working years were less likely to have a job than citizens of Canada or many European countries, probably in part because we aren’t helping adults stay in the labor market. work by offering them childcare services and parental leave.
But can we afford to improve our life? One answer is that other rich countries seem to be doing very well. Another answer is that Manchin’s objections to the proposed legislation evaporate under scrutiny.
Manchin said the Congressional Budget Office had determined that the cost of the bill was “over $ 4.5 trillion.” No, this is not the case. This was an estimate of the spending Republicans demanded – not the considerably smaller impact on the deficit – assuming everything in the legislation would be made permanent, which is not what the draft says. of law. And if Congress voted to expand programs like the Child Tax Credit, it would likely vote for income offsets as well. The budget office’s analysis of the legislation as it is actually drafted – which found it to be roughly deficit neutral – is a much better guide to its likely budgetary impact than this rigged assumption.
As for Manchin’s claim that we have “crushing” national debt, it is perhaps worth noting that federal interest payments as a percentage of GDP are only half of what they were under. Ronald Reagan, and if you adjust for inflation – as you should – they’re basically zero.
What about inflation? The spending proposed in Build Better is spread over several years, so it wouldn’t do much to increase aggregate demand in the short term – adding to the deficit for the first year would only amount to 0.6% of GDP. , which is not the case. enough to make a big difference to inflation in any model I know of. In addition, the Federal Reserve has just made it clear that it is ready to raise interest rates if inflation does not come down, so government spending should count even less.
As I said, I will not attempt to analyze Manchin’s thought processes, and I will leave it to others to speculate on his personal motives. What I can say is that the letter he published explaining why he said what he said on Fox News does not sound like a carefully crafted policy statement; it doesn’t even read as a coherent ideological manifesto. Indeed, he feels rushed – a bag of Republican talking points hastily trotted in an attempt to justify his brutal betrayal and pose as a victim.
Sorry but no. America – not a senator who takes the heat for a broken promise – is the victim in this story.