WASHINGTON – Donald Trump has promised to fix US infrastructure as president. He promised to take on China and increase American production. He said he would reduce the budget deficit and get the rich to pay their fair share of taxes.
But after two years as President, it is Joe Biden who is delivering on those promises. He jokes that he created an “infrastructure decade” after Trump merely managed a parody of “infrastructure weeks.” His legislative victories do not bring him votes from Trump loyalists or increase his overall approval ratings. But they reflect an important linchpin in the government’s handling of the economy at a time when many Americans fear recession and broader national decline.
Gone are blanket tax cuts. No more unrestricted trust in free trade with non-democracies. The Biden White House has committed more than $1.7 trillion to the belief that a mix of government aid, targeted policies and bureaucratic expertise can lead to long-term growth that lifts the middle class. This reverses the previous government’s view that cutting regulations and taxes boosted business investment, which flowed down to workers.
With new legislation, Biden is taking the risk that the federal bureaucracy will not be able to successfully implement and deliver on his promises, even after he leaves office.
This is a tricky one, since Trump himself has learned that global crises like a pandemic can quickly ruin the foundations of an economic agenda, causing businesses and voters to shift their priorities. There are few guarantees that the economy will behave over 10 years as government forecasts expect it to, while Biden’s policies are likely to be questioned by the new Republican majority in the House of Representatives.
Biden and his team say Americans are already seeing the upside, with announcements of new computer chip factories and around 6,000 ongoing infrastructure projects.
“There is an industrial strategy that actually uses public investment to encourage more private capital and more innovation in the historical tradition of everyone from Alexander Hamilton to Abraham Lincoln to John F. Kennedy,” said Brian Deese, director of the White House National Economic Council. “The results speak for themselves.”
Trump’s supporters see little overlap with Biden, although the funds for infrastructure, computer chip production and scientific research have been passed on bipartisanally.
“The Biden administration’s agenda is 180 degrees different,” said James Carter, policy director at America First Policy Institute. “More regulation, higher taxes, no border controls and a war on fossil fuels. They are two different administrations with two different approaches. One is the free market, the other is big government.”
In public, the current and former presidents appear almost bound to one another. On the eve of Biden signing the $280 billion semiconductor and research bill, FBI agents searched Trump’s home to recover classified documents, overshadowing the White House event. Similarly, ahead of the November midterm elections, Biden labeled Trump a threat to democracy while Republicans campaigned by pounding the president over worrisome inflation rates.
Biden advisers are quick to say the president is delivering on his own campaign promises rather than delivering on Trump’s pledges. But one of Biden’s first steps as president in 2021 was to provide $1,400 in direct payments to Americans as part of his coronavirus relief package. Coupled with the $600 payments in a pre-Biden aid package, the sum equaled the $2,000 Trump had asked for on the twilight of his presidency, though he couldn’t get it through Congress.
“I want to avoid the premise that Joe Biden somehow took Donald Trump’s ideas and legislated them,” Deese said. “What President Biden has done is have taken the campaign agenda that he fought for and actually implemented it.”
For all of this, Americans give Biden bad marks for the economy. Inflation has fallen from a 40-year high this summer, but consumer prices are still 7.1% higher than a year ago. The Federal Reserve is raising its benchmark interest rate to lower inflation, which it forecasts will lead to a rise in unemployment next year.
According to a new poll by The Associated Press and NORC Center for Public Affairs Research, three in four Americans describe the economy as bad, with nearly the same percentage saying the US is on the wrong track.
Biden asks for patience.
“I know it’s been a tough couple of years for hard-working Americans and for small businesses too,” Biden said in a comment on inflation on Tuesday. “But there are bright spots across America where we’re starting to see the impact of our economic strategy, and we’re just getting started.”
Trump supporters blame Biden’s separate $1.9 trillion coronavirus aid for triggering inflation, even though it included about $400 billion worth of direct payments, which the former president said Americans are getting they should receive. They argue that the US economy would be stronger if Biden took steps e.g. B. Allowing all companies to fully fund their investments in new equipment instead of targeting support to the technology and clean energy sectors.
But even excluding the recession caused by the pandemic, Trump’s economic record has been far from sterling as promised growth never materialized. Manufacturers began shedding jobs in 2019 ahead of the spread of the coronavirus, rather than the steady revival Trump promised. Annual budget deficits have worsened under Trump, but they have improved under Biden as pandemic aid has been halted.
Biden tells Americans his policies will boost the US economy over the next decade. Its $52 billion in computer chip manufacturing has led to a series of groundbreakings in Arizona, Idaho, New York, North Carolina, Ohio and Texas that will last for years. The idea is that state aid reduces risk and makes it easier for these companies to invest in areas where global demand exceeds available supply.
Chris Miller, a Tufts University professor and author of the book Chip War, said the stimulus represented a fraction of the cost of building the facilities. Miller said the benefits of the investment will spill over to companies that sell commodities to chipmakers, as well as potentially to auto, electronics and home appliance makers that increasingly rely on chips.
“The chip funding makes it clear that there will be significantly more fab building and chip production in the US,” he said, “giving chip industry suppliers more clarity that there is greater demand for their products.” than usual, which encouraged them to invest as well.”
Despite any economic concerns, manufacturing has improved under Biden, with factory employment totaling 12.9 million jobs, the most since December 2008. Just as Biden has boosted domestic investment, he has also expanded the Trump administration’s efforts, with China to compete and maintain the tariffs of its predecessor.
The Biden administration has restricted exports of advanced computer chips and semiconductor equipment, arguing for national security reasons that China is using the technology for surveillance and hypersonic missiles. It has also formed deeper partnerships with Australia, Japan, South Korea and several European countries to counter China’s growing influence.
Kurt Campbell, Biden’s “Asian czar” on the White House National Security Council, said many of Trump’s State Department initiatives on China were “followed up” during Biden’s presidency, and said at a panel in April that “in many ways it is the highest tribute” to the previous government.
But Steve Yates, a senior fellow at America First Policy Institute and former president of Radio Free Asia, said Biden has not shown he attaches the same importance to China as Trump.
Yates cited evidence that Biden’s national security strategy identifies the US as sharing an interest with China in addressing climate change. He said China will use this priority to its advantage, as Biden’s willingness to cooperate on climate change will prevent him from taking Trump’s stance against Beijing.
“We just have a weak hand,” Yates said.
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