Progressives are now heavyweights of the Democratic Party | Gary Gerstle
The stench of defeat hung on the Democrats’ failure to pass any of their major infrastructure bills through Congress in the last week of September. House Speaker Nancy Pelosi had pledged September 27 to be the date she would put the smallest bipartisan infrastructure bill passed by the Senate to a vote. This was going to happen, she said, even if no progress was made to meet the key demand of progressive Democrats: to pass the broader reconciliation infrastructure bill at the same time. But Pelosi held no votes that day or even this week, although she swore with increasing frequency (and apparent desperation) that a vote was imminent. The week ended not with a dramatic roll-call, but with many Democratic and gleeful Republican predictions that the collapse of the Democratic regime and, with it, Biden’s presidency, was at hand.
Treating this fateful week as the moment when Biden’s presidential promise faded may be too hasty a conclusion, however. The difficult challenge Pelosi faced was to unite Democrats around a second infrastructure bill that was much bigger and more ambitious than the first. Passing this second bill was never going to be easy, and not just because the Democrats had a slim majority in the House and the lowest majorities in the Senate. It is also true that a bill of this size and scope does not have a clear precedent. We hear a lot about the remarkable achievements of FDR, which passed 15 separate bills in the first 100 days of its administration of the New Deal in 1933. The Democrats’ Second Infrastructure Bill, if it had passed , would have been equally remarkable. It is best understood as an attempt to compress the equivalent of Roosevelt’s fifteen separate initiatives into one giant bill.
It’s exhausting to just read the list of the main provisions of the second infrastructure bill: universal preschool, subsidies for child and elderly care, a school canteen program, paid medical leave, extension of Medicare (and Obamacare and Medicaid), massive investments in a green economy, additional investments in physical infrastructure, a Civilian Climate Corps (modeled on FDR’s Civilian Conservation Corps), affordable housing, Native American infrastructure, a support for historically black colleges and universities; and an expanded green card program for immigrant workers and their families. We have heard a lot about how the filibuster distorts American democracy and the obscure process of “reconciliation” which in a few cases allows for a “workaround”. We have heard much less about how Democrats, under difficult political circumstances, pulled two voices from the Senate to achieve a legislative breakthrough on a scale that rivals FDR’s legendary 100 days.
And despite expert claims to the contrary, the Democrats’ breakthrough attempt is not yet dead. It is true that the reconciliation infrastructure bill no longer has any chance of reaching a spending level of $ 4 billion. If such a bill passes, it will probably be in the range of $ 1.5 billion to $ 2 billion. The many major initiatives currently contained therein may need to be reduced by a third. It will disappoint Bernie Sanders and Alexandria Ocasio-Cortez and their supporters, who initially laid eyes on a $ 6 billion package. Yet the story offers a different perspective. The Biden administration could still deliver a package of programs in its first year totaling $ 5 billion: about $ 2 billion for a reduced reconciliation infrastructure bill; $ 2 billion for the already approved US bailout; and the billion dollars for the bipartisan infrastructure bill that is sure to pass the House at some point. This 2021 “shrunken” package as a whole would still rival (as a percentage of GDP) government spending during the most expensive years of WWII. It would be more than five times the size of Obama’s economic stimulus package in 2009.
The ambition of Biden’s spending program reveals how far American politics have come since the Great Recession, when Obama relied for economic advice on a group of economic advisers drawn from the neoliberal world of Robert Rubin and Goldman Sachs, and Wall Street more broadly. personalities such as Timothy Geithner, Lawrence Summers, Peter Orszag and Michael Froman. Elizabeth Warren had not then launched her political career, and Sanders was a lone voice in the Senate. They were certainly not considered heavyweights of the Democratic Party. They are now. That Biden finally sided with the progressives during the week of September 27 is a sure sign of their influence.
The influence of progressives is also evident in Biden’s decision, in the days leading up to the expected vote on the bipartisan infrastructure bill, to appoint Saule Omarova as controller of the currency. Omarova, a law professor at Cornell University, is a radical who wants to democratize and nationalize finance in America in a way never before achieved. In her legal writings, she argued that the Federal Reserve should be turned into a people’s bank where Americans keep their deposit accounts (rather than in private banks, as is currently the case). This newly configured Fed, in its vision, would also establish a “national investment authority” responsible for directing Federal Reserve capital to projects that serve the public interest. Omarova may not receive confirmation from the Senate; even if she does, she might just be a pawn in Biden’s campaign for Jerome Powell to be reappointed as Fed chairman. But by appointing Omarova, Biden sparked a conversation already underway about how to restructure the Fed in a way that makes it a less cloistered institution serving elite interests and both more transparent and more responsive to democratic will.
Omarova is hardly a singular figure in Biden circles. Stephanie Kelton, professor of economics at Binghamton University and former Democrats’ chief economist on the US Senate Budget Committee, argued in a widely read book (The Deficit Myth) that governments can sustain much larger deficits than prescribed by conventional economic theory. Significant government spending, properly targeted, she argues, will not slow economic growth but will strengthen a “people’s economy”. Lina Khan, appointed by Biden to chair the Federal Trade Commission, believes social media and e-commerce giants like Amazon wield the kind of monopoly power that hurts both America’s economy and democracy. She authorized the FTC to scrutinize the practices of these corporate giants with the aim of either breaking them down or subjecting them to much stricter public regulation than they have known before. More generally, it aims to restore a regime of public regulation of the power of private companies that FDR and its New Dealers did so much to bring about – and that the Reagan Revolution did so much to shatter. The bipartisan fury directed at Facebook during Congressional hearings last week suggests that Khan’s views may have broad popular appeal.
It is still too early to know which of these progressive views and the guiding proposals that flow from them will prevail. Democrats operate in a much more hostile political environment than that which Roosevelt faced in 1933, when he enjoyed large majorities in the House and Senate. If they fail to push through versions of the two infrastructure bills this fall, Democrats will seriously damage their chances of maintaining their majorities in the House and Senate in 2022. But it’s also true, as this is the case with the populist mobilization that Trump has engendered. on the right, that the new progressivism is not going to go away any time soon. We have entered a new political era, in which the principles and strategies that guided the party under the Clinton and Obama eras are no longer sufficient.