American Rescue Plan: ‘There is nothing to fear but fear of deficits itself’

Look, count me among the leftists disappointed if not angered at the casualness with which Joe and the Manchins swatted away the $15 minimum wage from the American Rescue Plan. Even a “compromise” at eleven bucks an hour does little to nothing for a languishing service sector, to quote that ubiquitous COVID-era martial metaphor, “on the front lines” as much as doctors and nurses.

But as the details of the Biden bill become clear I may have reason to chill out. As Eric Levitz explains in a must-read post, the last time the federal government spent hundreds of billions on children, unemployment benefits, unionized workers, cities and municipalities, and indigenous communities was when Lyndon Baines Johnson sat in the Oval Office. And for once the Democrats understand human nature as well as they have read their GOP adversaries: once given money, people want more. I suspect the expansion of ACA benefits will not stop at temporary, for starters — and these benefits would expire in time for the 2022 midterm elections, for which Democrats better not be stupid enough to avoid campaigning on.

What we see, even in embryonic form, is the end of Reaganism, or, rather, the end of Democratic Leadership Council-approved “third way” politics, aka Clintonism. Levitz:

Democrats (finally) abandoned the policy of starving America’s poorest children to punish their jobless parents.

The American Rescue Plan reflects a similar leftward revision in the party’s approach to social welfare.

For a quarter-century, whenever Democrats proposed new safety-net programs, they filled them with holes large enough for the very poorest to fall through.

In response to the Reaganite backlash against the urban poor in general and mythical “welfare queens” in particular, the party decided the only politically viable way to raise the living standards of low-income Americans was to condition federal aid on labor-force participation. Thus, the various tax credits the party has used to mitigate child poverty over the past two decades have all included phase-ins that require recipients to earn a certain amount of labor-market income to qualify for help. For example, as of last year, the poorest 10 percent of U.S. parents were ineligible for the child tax credit because they made too little to qualify.

From the day Bill Clinton ended welfare as we knew it, progressives have been decrying the senseless cruelty of this policy: Using child poverty as a tool for promoting work wasn’t just morally reprehensible but self-defeating. Giving unconditional cash assistance to poor families makes their children more likely to hold full-time jobs as adults.

Or, as Levitz wrote pithily, “Ignore the Beltway’s fetish for bipartisanship and deliver big, clear gains to the American people.”

Let’s not ignore the racialized part of the discussion. The number of former Barack Obama allies who’ve dismissed the former president’s own kickstart efforts in 2009 startles me. They’re not wrong. But Joe Biden given credit for compensating for his predecessor’s mistakes nauseates me a bit.

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