Stimulus could change the Biden presidency

Twelve months ago, the US Congress passed the largest package of fiscal relief in national history. It is a measure of the coronavirus pandemic, and of Washington’s prowess in a crisis, that a third such boost is imminent. The US has softened the economic costs of the virus with all the skill that it failed to bring to its actual containment. 

It is no tragedy if Joe Biden’s American Rescue Plan weighs in at slightly less than its initial $1.9tn. The US economy, which shrank less last year than that of some other rich countries, is now growing. Households have unspent cash after a year of restricted access to bars, restaurants and travel — spurring concerns about rising inflation. Then there are questions of equity. Despite some trimming on Wednesday, cheques are expected to be sent to people earning up to $80,000 a year, even as prospects of a higher minimum wage are ailing, much to the left’s displeasure.

Republicans are right that a return to normal life, craved by all, entails a phasing-out of emergency aid. But Biden cannot predict when the pandemic will lift. He might even have to intervene again if infections surge later this year.

No doubt, he should frame his bill as the beginning of the end, at least in intent, not a new standard in economic policy. For now, however, the US still needs the help of its federal government. On the balance of risks, withdrawing it too quickly is much worse than the opposite error.

There is politics as well as economics at work. Almost mystical significance is accorded to the first 100 days of a new presidential administration. If Biden gets his bill (Democrats want it signed by March 14) he will have something bold to show for his early efforts. It could also shape the rest of his time in office.

The previous two Democratic presidents lost Congress at their first midterm elections. For Bill Clinton, it was a botched attempt at healthcare reform that riled voters. For Barack Obama, it was a successful but divisive go at the same thing that cost him. In both cases, their domestic programmes never wholly recovered. If Biden’s stimulus aids the economy without overheating it, he can hope to buck the trend of prematurely neutered Democrats. 

The opposition seems complacent about this prospect. Last March, the fiscal help commanded virtual unanimity in Congress. Last Saturday, not one Republican voted for the Biden bill as it cleared the House of Representatives.

This was despite public supermajorities in its favour, including plenty of conservative voters. “I’m coming from a state where people are saying we need some help,” reports Senator Lisa Murkowski of Alaska, one of the reddest places in the nation. She is almost alone among Republicans in her openness to the bill. As fair as some of its quibbles are, the party must ask itself if it wants to go into 2022 with no credit at all for a hugely popular law. The Democratic midterm campaign would more or less write itself. 

It feels almost subversive nowadays to praise US politics. All the same, Washington has a good story to tell about its economic handling of the crisis. Aid has been timely, creative and often bipartisan, with the perfect never being the enemy of the good. There is an alternate world where none of this was true, and Americans are enduring avoidable hardship.

At a time when democracy is assailed by its enemies as a charter for chaos and sclerosis, the US version has shown efficiency in extreme conditions. As to what might have been, had the pandemic itself brought out the same response, the country is left to wonder.