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U.S. Politics:
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Build Back Something, Part 1: There Will be no Whole Enchilada


In February, both President Joe Biden (D-The New Deal) and Sen. Joe Manchin (D-The Industrial Revolution)  said they are willing to try to rescue at least some of the ideas in the Build Back Better (BBB) social program initiative. In this article we’ll look at what went wrong, focusing mainly on the objections of Sen. Joe Manchin (D-Industrial Revolution). To be clear, BBB is dormant, or worse, because no Republicans will sign on. But as a key swing vote, Manchin is a target for persuasion (and for anger among progressives). And the recent public statements by both suggest there’s a path to a smaller, more targeted initiative this year.

Where Manchin Missed the Mark

In December’ Manchin shared a dubious list of other things that Congress should be focusing on right now, and that’s clearly an effort to shift the focus to someone–anyone!--else. But Manchin made some important points on specifics of the bill that should be considered by the President and his allies if they decide to keep pushing the ideas in BBB.


Manchin gave four reasons he believes now isn’t the time for Build Back Better. First, it would make inflation worse. Second, it would increase the national debt. Third, we’re in a time of (unspecified at the time, but maybe he knew something?) geopolitical unrest, and fourth, it would distract us from dealing with COVID. Manchin said “that’s where our attention needs to be directed to immediately.” Though I’ve heard nothing from him or his 534 colleagues about any one of these items in the months since he said that. “Immediate” must mean different things in different environments.


As to Manchin’s “immediate” concerns, we can dismiss the last two immediately. There will be geopolitical unrest forever, and having more people in community college or driving electric cars can’t make it any worse. And Congress made it pretty clear early in 2021 that the American Rescue Plan Act was its last word on COVID.


It’s possible that BBB as it stands (well, lies dying) could cause inflation, because it would put money into the hands of people who will spend it, like parents  and child care and home care workers. And it’s paid for largely by people who don’t spend all their money, like individuals making over $10 million and corporations with revenue over $1 billion. But according to the Congressional Budget Office (CBO), the most that will be spent in a single year is $252 billion in 2025. That’s just over one percent of our current gross domestic product, so it’s hardly a path to the $9 loaf of bread. Further, most of the spending is years out, when inflation should be tamed by the end of COVID relief and supply chain issues.


Nor do we need to be concerned about BBB’s impact on the debt. CBO says that BBB will add $367 billion to the debt over ten years.  That’s less than two percent of the current $28.4 trillion national debt. As to both inflation and debt impacts, BBB is a fraction of the American Rescue Plan Act, or ARPA, (which Manchin voted for) and which is spent $1.1 billion in 2021 alone.


Where Manchin Got it Right


I give credit to Manchin for raising both general and specific concerns about the construction and content of Build Back Better. 


Manchin objected to the short extension of the Child Tax Credit based on its high income limits. It’s a legitimate point that is worth debating; surprisingly, some conservatives disagree with Manchin, making an argument about tax fairness. There’s also a legitimate policy debate to be had on Manchin’s insistence on work requirements for this credit. I don’t buy the arguments in favor of work requirements, but they are a basis for negotiation . The credit increase is important and worth fighting for, but Biden and proponents will have to address and likely accept some of these objections to get the bill debated, much less passed.


Manchin didn’t like the fact that most of the programs created or expanded in Build Back Better were funded for only one or a few of the ten years authorized by the bill. That means it would cost a lot more to fund them permanently and then there likely would be a big increase in the national debt (from $770 billion if all the spending and taxes were made permanent to about $3 trillion without the tax increases). The bill also leaves a confusing trail of on-again off-again programs that would be a nightmare for social program participants and providers – and a bonanza for tax attorneys. 


Manchin didn’t like the climate change and alternative energy funding in BBB either. That is likely just another part of his long history of defending his state’s coal industry, but he also questions the value of clean energy incentives. On this point, he’s absolutely right. They will pay people to do what they were going to do anyway, effectively throwing money into the wind (without generating any electricity). A recent study shows that a Chinese program to subsidize energy efficient cars 1) mainly helped people who were already going to buy such vehicles anyway, 2) shifted purchases away from other equally efficient vehicles, and 3) cost three times what it saved in fuel. In other words, it’s a classic example of the government picking winners while coming out the loser. The inefficiency and ineffectiveness of targeted subsidies is one of the few things that both liberals and conservatives can agree on. They are only loved by re-election conscious politicians, amounting to one of the more poorly disguised forms of legal bribery in our political system.

Building Something Soon?

The president says he wants to try BBB again in several pieces, which could work out better than the megabill approach. It can also balance the ideas of progressive and moderate Democrats, not to mention bring a few Republican ideas and possibly senators into the fold. That will be just enough time for me to develop some options. Build Back Better including a lot of important and transformational ideas, many of which would help a Americans, strengthen our economy, and make us stronger for decades. If Biden and Manchin are on the same page, some of these may even get passed by Congress!

BBB Part 1
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