White House moves to reshape role of US capitalism

The White House is pushing an infrastructure bill that could reshape the discussion around capitalism as it seems to reestablish the federal government as a primary driver of how the economy should grow and function.

In addition to traditional infrastructure projects, Biden’s $2.25 trillion American Jobs Plan would make government investments in broadband, electric vehicles, climate change, elderly care, child benefits, housing and developing future technologies. 

It would redefine classic infrastructure projects to include investments in workers and families paid for by tax hikes on corporations.

The ambitious proposal effectively transforms the relationship between the government and the private sector, making radical changes to key sectors of the economy that could be felt for years down the road.

It places a big bet on the ability of the federal government to drive sustained economic growth at a time when confidence in institutions is low. 

And it will almost assuredly open Biden up to attacks from Republicans that he’s undermining traditional American capitalism and implementing a socialist agenda — after a heated election where cries of “socialism” were central to former President Trump’s campaign.

“Every corner of the country is going to be touched by this in some way,” said Mark Zandi, chief economist at Moody’s Analytics.

“It takes a whole different perspective on government,” Zandi added. “Ever since Ronald Reagan it’s been about government dysfunction, we need smaller government, less government. … This is the complete opposite. It’s saying government and only government can solve the problems we have because they’re so large and beyond any one of us. Infrastructure is a collective problem.”

Experts say a sizable infrastructure investment is badly needed as other countries make advances in high-speed rail and other modes of transportation, and pockets of the country still lack access to broadband when the internet is a necessity to participate in the economy. Biden’s plan also goes beyond traditional investments in roads, railways and bridges to include support for caregivers, affordable housing care and research and development to address climate change.

The White House views the proposal as a “once-in-a-generation opportunity” to make lasting investments in each of those areas, principal deputy press secretary Karine Jean-Pierre told reporters on Wednesday.

And the administration has made clear it will seek to address systemic issues tied to the capitalistic structure of the economy such as economic inequality, reliance on fossil fuels and racial and gender disparities through the American Jobs Plan and a subsequent package.

“No one making under $400,000 will see their federal taxes go up. Period. This is not about penalizing anyone,” Biden said Wednesday in Pennsylvania, explaining his proposal to pay for the package by raising the corporate tax rate. “I have nothing against millionaires and billionaires. I believe in American capitalism. I want everyone to do well.”

Biden is expected sometime in April to outline a second phase of his Build Back Better push that focuses on human infrastructure like health care and child care through tax credits, drug pricing and free tuition for community college.

Progressives have even pushed Biden to go bolder, citing the window of Democrats controlling the White House and both chambers of Congress.

“While President Biden’s proposal is a welcome first step, more must be done to improve on this initial framework to meet the challenges we face,” Rep. Pramila Jayapal (D-Wash.), head of the Congressional Progressive Caucus, said in a statement, calling it imperative “to enact the transformational policies that we were voted into office to deliver.”

Some progressives roll their eyes at comparisons between Biden and former President Franklin Roosevelt, whose New Deal to pull the U.S. out of the Great Depression is viewed by many as a framework for what Biden is trying to do.

They say the infrastructure package is fine but that the realities of politics and Biden’s moderate leanings have resulted in a bill that falls well-short of being a transformational reimagining of capitalism.

“If we are thinking more broadly about building more progressive power among voters, we should pocket the wins and use the debate to sketch out the full mosaic of a just economy, why rebuilding the country is not just about bricks and mortar but includes winning real wages for people by reinvigorating the labor movement via the PRO Act, ending the insanity of a wasteful health care system and of course, saving the planet,” said Jonathan Tasini, a progressive strategist. 

But many mainstream Democrats believe the American Jobs Act could prove to be equally as popular as the COVID-19 relief bill, which has boosted Biden to high job approval ratings more than two months into his second term.

The ambitious plan, which would likely require Biden to go through the budget reconciliation process in Congress, would fundamentally shift the way the economy operates. And that has opened Biden up to attacks from the right.

Led by Trump, Republicans are already casting Biden’s plan as a socialist takeover and his presidency as a tax-and-spend nightmare that is certain to sink the fragile economy.

“This legislation would be among the largest self-inflicted economic wounds in history,” Trump said in a statement. “If this monstrosity is allowed to pass, the result will be more Americans out of work, more families shattered, more factories abandoned, more industries wrecked, and more Main Streets boarded up and closed down — just like it was before I took over the presidency 4 years ago.”

Freedomworks, a conservative advocacy group, acknowledged the need to improve the nation’s infrastructure but said “an injection of trillions of dollars in federal funds for leftist agenda items, immediately after passing yet another multi-trillion ‘stimulus’ package, is fiscally reckless.”

Democrats are brushing off the attacks, describing it as standard GOP talking points trotted out whenever popular new programs are put in place.

“It’s pretty clear Republicans are going to say socialist to anything,” said Joel Payne, a Democratic strategist.

“I mean, Republicans tried to call Joe Manchin a socialist,” he added, referring to the West Virginia Democratic senator who opposes calls to eliminate the filibuster. “So it’s clearly a tactic they’re going to use. But they have been trying to label Joe Biden a socialist for the last two years and it’s not sticking.”