Joe Biden's $1.9trn Covid stimulus isn't transformative – yet

Much of the support only lasts until September, but the bill could be a foundation on which the president can build a more permanent, radical legacy.

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President Joe Biden has frequently been compared to Franklin Delano Roosevelt. Before he was inaugurated, the 46th president was reportedly studying how the 32nd handled the presidential transition in 1933 for guidance. After he took office, the New York Times, referring to his rapid signing of executive orders and proclamations, noted that Biden’s “fast start” was “copying Roosevelt”.

Now, with the passage through Congress earlier this month of a $1.9trn Covid relief bill – the American Rescue Plan Act (ARPA) – the comparisons between Biden and the iconic New Deal president have reached a kind of apogee. “Biden’s FDR moment? President in New Deal-like push that could cement his legacy,” read one Guardian headline in anticipation of the passage of the stimulus package.

The legislation is indeed significant. Individuals who made less than $80,000 in 2019 will receive stimulus cheques of $1,400. People who have lost their jobs and would otherwise have to pay for their own healthcare through Cobra – a scheme that effectively allows ex-employees to continue receiving the healthcare they were entitled to in their previous employment, with the glaring difference that they must now pay for it themselves – are fully subsidised through to the end of September of this year. Child tax credits were substantially expanded, with families receiving a $3,000 annual benefit for every child aged six to 17, and $3,600 for every child under six for the 2021 tax year. The policy, according to a report by Columbia University’s Center on Poverty and Social Policy, could cut child poverty in 2021 in half – a point that quickly became a refrain among Democrats promoting the bill.

These are noteworthy achievements. But they are also palliative, not transformative, in nature. In this way, they are markedly different from FDR’s New Deal. The Fair Labor Standards Act, introduced in 1938, which established a minimum wage, overtime pay of (at least) time and a half, and youth employment standards, was not set to expire six months after it was passed. Neither was the National Labor Relations Act of 1935, which guaranteed workers’ rights to organise, strike and engage in collective bargaining. Social security, a programme that provides insurance for the retired and disabled, also still exists today.

As it exists now, the Biden administration’s Covid stimulus package does not do any of that. It gives people money with which to try to get through 2021.

The problem with this is that the realities that led the pandemic to be so ruinous for so many aren’t going to end with 2021, just as they did not begin in 2020. The direct payments, the enhanced child tax credit, and the healthcare subsidy for those who pay through Cobra will make a huge difference to many people. But if health insurance shouldn’t be tied to employment in a pandemic, why should it be tied to employment outside of a pandemic? If sending out annual benefits can cut child poverty in half, what sense is there in adopting the programme only to abandon it after a year? Halving child poverty and providing universal healthcare don’t become less worthy or urgent goals once the pandemic is over.

[See also: Why bipartisanship is not a good test of Joe Biden's presidency]

The pandemic didn’t create the inequalities and impoverishment that continue to blight American society. But it brutally exacerbated and exposed them, and the general state of emergency made these other, pre-existing crises more pressing to Democratic lawmakers, who decided to do something about it. (No Republican voted for the bill, but Democrats, using the budget reconciliation procedure, which requires only 50 votes in the Senate, pushed it through anyway.) But doing something to temporarily forestall mass destitution isn’t the same as permanently transforming the conditions that make poverty and inequality so ingrained.

Some Democrats have said that they intend to try to make the child tax credit permanent. While this form of support is commonplace elsewhere in the rich world, it would be revolutionary in the US, effectively providing a guaranteed income to families with children. Biden’s relief bill could be revolutionary in another way, too: if he and the Democrats in Congress build on it to demonstrate that the social contract between government and citizens can be rewritten, to show that the US can, in fact, have a robust social safety net and set of programmes that both level inequities and ensure that every person in the country can live with a baseline measure of dignity.

Earlier this year, Jake Blumgart, writing in the New Statesman, argued that Biden should aim to emulate FDR not only in terms of quantity of spending, but also in reshaping how the state itself functions. So far, Biden has only done the former.

Biden, who achieved his goal of delivering 100 million vaccinations in 100 days, will be the president who got the nation out of a crisis, as FDR was. FDR saw the country through the Great Depression, and this pandemic will, in all likelihood, end, at least in the US, while Biden is in the White House.

But FDR did not only get the country out of a crisis; he also transformed it in the process. Temporary crises present opportunities for long-lasting, radical change – as with the New Deal after the Great Depression, or, in the UK, the creation of the welfare state, including the NHS, in the wake of the Second World War. Biden’s legislation, at present, does not take full advantage of the opportunity provided by this crisis. But it could. Doing so would require more ambition, and more arduous fights in Congress, including with some of the more moderate Democrats (consider, for example, that eight Democrats voted against raising the minimum wage, a measure that was eventually left out of the American Rescue Plan).

But as FDR said in his third inaugural address in 1941: “Democracy alone, of all forms of government, enlists the full force of men's enlightened will.” The pandemic has shown that the US is capable of willing better policy into being. Whether it can will genuine change to come about remains to be seen.

Emily Tamkin is the New Statesman’s US editor. 

She co-hosts our weekly global affairs podcast, World Review

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