(Bloomberg Opinion) -- The conventional wisdom is that politicians focus on the short term at the expense of the long term — that they’re obsessed with the latest polling and the next election instead of the future of the country and the next generation. That may be true, but still: President Joe Biden and congressional Democrats could use a healthy dose of short-term thinking right about now.
Their time and attention are currently consumed by fraught negotiations over the exact size and scope of the bundle of initiatives they call the Build Back Better agenda, which the White House describes as an ambitious plan to make “a more sustainable, resilient, equitable, and prosperous future.” Progressive politicians and activists are correct that this package addresses many legitimately important issues — climate change, child poverty, long-term health care, education and so on.
But their list, while compelling, is all-encompassing. And the swing voters who made Biden president are almost by definition less attached to the idea that longstanding features of American society are in acute crisis and in need of redress. On the other hand, they probably remember Biden vowing last October that he was “going to shut down the virus,” or House Speaker Nancy Pelosi saying in February that the American Rescue Plan, the Covid stimulus and relief bill that became law last March, was an opportunity to “crush the virus.”
Of course, Biden campaigned on “building back better” in addition to addressing the public health emergency. But most people would say that, to build back better, you first need to build back, period. And so far, the job’s not done.
First, the economy. The American Rescue Plan has done an enormous amount of good in terms of helping needy families get on their feet and giving schools financial flexibility as they reopened this fall. Without it, there’d be more hardship and more public institutions in financial distress.
That said, in their zeal to avoid the perceived mistakes of former President Barack Obama’s 2009 stimulus, Democrats made some new mistakes this time around. They pushed a lot of money out to consumers very quickly, and consumers continued the pandemic-era pattern of buying more goods and fewer services. That’s led to snarled ports and inflation.
This was for the most part unexpected. Even after the American Rescue Plan passed, the professionals at the Federal Reserve expected 2.4% inflation in 2021, settling down to 2% in 2022, paired with a blistering 6.5% real growth this year and a robust 3.3% next year. Alas, the Fed now expects inflation of 4.2% this year (which seems optimistic given some of the market data on rents), with inflation staying modestly above its target of 2% in 2022 and 2023.
Interest rates remain fairly quiescent, so it wasn’t a problem to spend $1.8 trillion. But in retrospect the critics who said at the time that the stimulus should have been slower were correct.
The basic fact is that American Rescue Plan didn’t work out as well as hoped, which helps explain Biden’s current political problems, not only with the public but also with moderates on Capitol Hill. If it had, that would have earned the White House further benefit of the doubt. That some of the criticisms of the plan proved correct does the opposite.
To be fair, one reason the plan has been disappointing is a factor beyond presidential or congressional control: the rise of a much more transmissible new variant of the virus.
I don’t consider myself an especially cautious person with regard to Covid. But my family isn’t going to travel for the upcoming long weekend, because if our unvaccinated son gets sick (or his parents get a breakthrough case) we’d have to keep him out of school for a prolonged quarantine. Some people, more cautious than me, are still avoiding most indoor activities. Meanwhile, other less cautious people are annoyed by the persistence of mask mandates in large portions of the country.
The delta variant is obviously not Biden’s fault. But last fall and winter he left the impression that his administration would get serious and defeat the virus in a way that his predecessor’s never did. It’s now clear that’s not going to happen — some form of Covid may be endemic. It’s a huge disappointment, especially to Biden’s supporters.
So what can Democrats do? Obviously they can’t rewrite the American Rescue Plan or undo Delta. But there are steps they could take to address the issues that are top of mind in 2021.
There’s a lot that could be done to boost global vaccine supply, for example, ranging from tasking the Food and Drug Administration to work with Chinese manufacturers to certify the Sinovac and Sinopharm production facilities to deploying quarter-doses of the Moderna vaccine to effectively quadruple supply. Biden could also push Pfizer and Moderna to share mRNA know-how with the World Health Organization’s vaccine technology transfer hub in South Africa.
Domestically, Biden’s biggest virus policy failure is on testing. Cheap, rapid Covid tests are ubiquitous in Europe, but in the U.S. they’re expensive and in short supply. U.S. consumers are largely limited to the product of one company, not because nobody else can make a rapid antigen test but because nobody else (including U.S. companies that are selling tests in Europe) can get FDA approval. The agency’s position is that these tests are medical device and should be regulated as such. That’s at odds with the reality of life, which is that a rapid test is broadly useful — you can have everyone take a test before the wedding and make sure grandma’s safe — in ways that slower PCR tests are not.
On inflation, the actions are less obvious; what’s done is done. Last spring’s stimulus cannot be retroactively reduced. But the situation at West Coast ports is a complicated coordination problem involving labor unions, shipping companies, port authorities and truckers. The whole country has a stake in its resolution. The White House doesn’t have formal authority to force all the players to work together, but it has some influence and could play a convening role.
Similarly, the White House is (belatedly) considering rolling back some Trump-era tariffs on steel, which would reduce price pressures in a few sectors. It should apply that logic more broadly. If the White House thinks the China-specific tariffs are geopolitically significant, fair enough. But removing non-China tariffs would heighten the impact on China while simultaneously delivering some relief to consumers.
At this point, Democrats are overcommitted to enacting some version of their Build Back Better agenda. They can’t now just abandon ship. So the best way forward is to get a bill passed one way or the other, as soon as possible, so they can pivot back to things that are actually on normal people’s minds.
Maybe the grim ideologues who hold sway over political parties view a public health emergency or a burst of inflation as mere distractions from the larger and more important long-term project of remaking society. Much of the country, however, sees things the other way around. The politicians should leave aside their grandiose plans for America’s future and focus on the here-and-now problems that that their constituents care most about.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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