Rebuilding the Democratic Coalition

Rebuilding the Democratic Coalition

While some have argued that the Biden administration’s industrial policy offered too much to the private sector, these bills were designed to serve multiple constituencies.

Whatever you think about Joe Biden, the achievements of Bidenomics deserve celebration. The Biden administration bucked economic orthodoxy by boosting household income, which successfully lowered the child poverty rate, including for nonwhite households. And it initiated supply policies to address shortages in the global economy while promoting workers’ rights. The three major industrial policies that form the centerpiece of Bidenomics embedded social protections, labor interests, and environmental justice into American economic policy. In the process, the Biden administration has begun to rebuild coalitions with groups that were abandoned by past Democratic administrations.

When Biden came into office in 2021, the world was still in the middle of a global pandemic with enormous economic repercussions. In response, Democrats implemented an unprecedentedly large fiscal stimulus package, which included additional weekly payments of $600 and later $300 to those receiving unemployment insurance. In defiance of Democratic economic advisors like Larry Summers and Jason Furman, who argued that this spending risked increasing inflation, the Biden administration passed still more fiscal stimulus, as well as enhancing the Child Tax Credit to directly support low-income households. This material support reduced child poverty.

The Biden administration also entered the White House determined to reverse Trump’s attacks on the environment and labor. The Trump administration weakened hundreds of pollution regulations, including emissions standards reporting requirements and waste dumping regulations for coal mines. It appointed anti-union members to the National Labor Relations Board, which subsequently rolled back numerous Obama-era protections for workers, including the right to organize at franchises and requirements that legal settlements in favor of workers provide “full remedy” for violations.

The Biden administration’s three major industrial bills use a mix of carrots (private incentives, public investment, and low-cost lending) and sticks (tax enforcement, hiring requirements, and stringent environmental standards) to sustainably promote domestic industry and reduce carbon emissions. The Bipartisan Infrastructure Law provides $550 billion over five years to support improvements and construction of transit infrastructure, including roads and bridges, public transit, and rail service, as well as water sanitation and environmental remediation, particularly for rural and nonwhite communities. The CHIPS and Science Act offers more than $280 billion to increase resilience to global shortages of intermediate goods, chiefly semiconductors used in myriad products (like cars and refrigerators) and essential integrated services like healthcare and communications. It also supports domestic workers through explicit labor standard requirements for the provision of child care. The Inflation Reduction Act (IRA) offers more than $400 bil...