President Biden isn’t kidding. Despite a two-decade slide in Americans’ trust in government, Biden is proposing a sharp increase in the government’s role in the US economy and American society.
Biden’s first presidential budget, which the White House unveiled May 28, would normalize federal spending close to the extraordinary levels reached due to emergency aid packages Congress passed during the coronavirus pandemic. Federal spending in 2019, the last full year before the pandemic, was $4.4 trillion. Last year, federal spending rocketed to $6.6 trillion. Biden’s budget calls for $6 trillion in spending in fiscal year 2022, which begins Oct. 1. Using 2019 as a baseline, that’s a 36% increase.
Biden’s 2022 budget includes numerous new or expanded programs he has already outlined in his American Families Plan and American Jobs Plan. Among the costliest are tax credits for parents, child care subsidies, universal pre-school for all American kids, and health care subsidies. Biden’s infrastructure plan would provide hundreds of billions of dollars for roads, bridges, power systems, green energy and electric-vehicles. Biden wants to raise taxes on businesses and the wealthy to pay for some of this, but annual deficits would still exceed $1.3 trillion per year for the next decade.
Do voters want this much government? Biden plainly thinks they do, and there’s some evidence he’s right. The White House sent out a memo this week citing one poll showing 62% approval of how Biden is handling the economy, and another showing 57% approval. Those marks are about 15 points higher than Donald Trump earned at the same four-month point of his presidency. Some polling shows lower approval ratings for Biden, but still net-positive.
There are also warning signs for Biden. In a recent Quinnipiac poll, only 38% of voters think Biden’s policies are helping the economy, while 35% think they’re hurting. Republican governors in at least 24 states have announced an early end to federal jobless benefits of $300 per week, which is supposed to run through the first week of September. Ending those benefits is turning out to be popular, with 54% of respondents in the Quinnipiac poll saying they agree with the move. Only 38% think ending benefits early is the wrong thing to do. Americans seem to be buying the narrative that generous jobless aid is keeping people from looking for work.
It seems fair to say Americans are ambivalent about the bigger government Biden thinks will be good for them. Trump’s surprise election in 2016, driven by anti-elitist populism, demonstrated that millions of Americans feel traditional institutions have failed them. Biden’s defeat of Trump in 2020 hasn’t changed that, which means Biden has a lot of convincing to do.
The president’s budget is mostly a wishlist that never makes it through Congress intact. Biden’s is no different. With extremely narrow majorities in both houses of Congress, Biden’s fellow Democrats will pass some of what Biden is asking for but not all. Then Biden will have to convince voters it’s worth sticking with his plan—through the 2022 midterm elections, and beyond.
Biden’s first two sweeteners came in March, when Congress passed the $1.9 trillion American Rescue Plan (ARP) with no Republican support. That provided most adult Americans an additional $1,400 stimulus payment, while also extending the jobless aid program into September. The ARP would not have passed if Republicans controlled one chamber of Congress or the White House, so voters can squarely thank (or blame) Democrats for that.
A third enticement will roll out in in July, when around 40 million families will start to receive child-tax credits, in advance, as a monthly payment from Uncle Sam. This was also part of the ARP, and it expires at the end of 2021. Biden wants to make this giveback permanent. So voters will get a taste of it this year and decide if they want more.
Congressional Democrats are working now on many other Biden priorities. A safe assumption is they might pass half to two-thirds of the infrastructure, green-energy and social-welfare spending Biden wants by the fall. Even if it falls far short of Biden’s ask, it will still be a marked boost in spending akin to Lydnon Johnson’s Great Society programs and maybe even Franklin Roosevelt’s New Deal.
Democrats know well they face a narrow window of opportunity and need to make voters feel tangibly better off, soon, if big government has a future. Soaring deficits and rising inflation or other economic speed bumps will give Republicans ammunition to blame Biden’s swelling government for [fill in the blank]. Biden will need a powerful counter-narrative. His budget lays out the vision, but reality is harder to shape.
Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips, and click here to get Rick’s stories by email.