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WASHINGTON (AP) — When Bill Clinton talked about how to build a bridge to the 21st century, it had to be built with balanced budgets, welfare recipients who found jobs and expanded global commerce.
Three decades later, President Joe Biden is facing the harsh realities of the 21st century and his approach has been the exact opposite: borrow to spur growth, deliver government aid without imposing labor and bring global supply chains back to the states. -United.
This shift in Democratic policy reflects the unique crises caused by the pandemic, as well as decades-old trends such as rising economic inequality, the downward slope of interest rates that has facilitated borrowing, and the pitfalls of globalization. as factories moved out of the Midwest. White House aides compare the scope of Biden’s political ambitions to those of Franklin Delano Roosevelt after the Great Depression.
All of these factors came together in Biden’s $1.9 trillion relief package that his administration is now selling to voters nationwide. And even grander designs are yet to come for an infrastructure package and investments in workers that Biden will likely detail in a speech Wednesday in Pittsburgh.
“The underlying goal of how to deepen, broaden and secure America’s middle class has changed over time,” says Heather Boushey, a member of the White House Council of Economic Advisers. “What happened in 2020 was this huge unmasking of all these fragilities and vulnerabilities in our economy.”
Biden’s relief package — which comes on top of roughly $4 trillion in aid already approved to deal with the fallout from the coronavirus — is an effort to bolster the social safety net that many in his own administration had helped sewing during Clinton’s second term.
White House Chief of Staff Ron Klain held the same position for Clinton Vice President Al Gore. Treasury Secretary Janet Yellen was Clinton’s chief economist. Gene Sperling, who oversees the release of relief money, was then director of the National Economic Council. Deputy Chief of Staff Bruce Reed had served as head of Clinton’s Domestic Policy Council.
At the time, the Clinton administration seemed to have found a winning formula. The 1996 welfare overhaul, signed at the height of a re-election campaign, aimed to end welfare as a right and move welfare recipients into jobs, while the globalization offered the possibility of greater profits for employers.
“We are beginning a new century, full of enormous possibilities,” Clinton said as she accepted the Democratic nomination that year in her “Bridge to the 21st Century” speech. “We must give the American people the tools they need to make the most of their God-given potential. We must make the grassroots marketplace of opportunity and responsibility accessible to all Americans, not just a few.
The US economy looked strong after Clinton’s re-election. Records were set in the percentage of Americans working. The federal budget showed a surplus of $236 billion in 2000. American companies could access new markets thanks to trade pacts and China’s admission to the World Trade Organization.
But the stock market bubble of Internet companies burst at the end of the Clinton era. Factories quickly moved to China, while aid to retrain the newly unemployed was never fully delivered as planned. The seeds of inequality emerged after house prices ballooned in the years that followed and then plunged, triggering a financial crisis in 2008 followed by an extremely slow recovery.
Democratic voters have also evolved since the peak of Clintonism in the 1990s. They have become more diverse, more likely to have a college degree, and more likely to live in an affluent city or suburb. This progress was easily ignored until Donald Trump won the presidency in 2016 on a promise to scrap trade deals, declaring that the government had stiffened the public and promising to return the country to an old blue-collar identity.
“It happened without the Democrats really integrating it into their politics until Trump came along and he was the wake-up call,” said Elaine Kamarck, senior researcher of governance studies at the Brookings Institution who served in the Clinton White House. “Democrats were slow to realize this, but Biden was not. Biden was probably the best at it.
Celinda Lake conducted polls for the Clinton and Biden campaigns. Clinton was a young man of 46 when he became president, the first baby boomer to take the reins of national leadership. Baby boomers, on the other hand, had practically grown up with Biden in one office or another. A man of experience in a crisis, he spent 36 years in the Senate and eight years as Barack Obama’s vice-president.
“It was the opposite choice in terms of leadership – in 1992 they went for the next generation, the new thing,” Lake said. “In 2020, they went for the stable leader.”
At 78, Biden recalls a former Democratic party that believed great government was not inherently bad government. Child tax credits from its relief program help families without imposing work requirements. Its $1,400 direct checks go to each partner in a earning couple up to $150,000, expanding the social safety net beyond the poor to 158.5 million households.
Pandemic relief is entirely financed by debt, which is made possible by interest rates near historical lows. Despite the growing national debt since Clinton’s presidency, the federal government spent a smaller share of gross domestic product on debt service last year than during the Clinton era. This has so far allowed the government to borrow such large sums, although long-term debt pressures remain.
The Biden administration is now challenging China, which has never embraced the values of democracy as trade advocates once believed. The White House has made it a priority to ensure the United States has a steady supply of vital goods such as computer chips, a sector increasingly dominated by China. A shortage of chips is choking auto production around the world, making it a threat to American manufacturing jobs.
Robert Lawrence, a Harvard University professor who served on Clinton’s Council of Economic Advisers, doubts factory jobs can all come back because automation has reshaped the economy. But he sees the Biden administration pursuing new policies to help workers.
“If you think of Biden, we’re going back to big government and we’re going back to a new form of social welfare — that includes the middle class,” Lawrence said. “These are truly revolutionary changes.”
Al From, founder and former CEO of the centrist Democratic Leadership Council, said the Clinton era was also about helping workers and reflected that time when welfare was addictive and investors viewed US debt as excessive. Even though Biden’s politics seem to break with this era, the values are the same.
“You have policies trying to achieve the same goals,” From said. “They may be different, but they are consistent with the long-term principles of the Democratic Party.”
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