The reason Biden’s agenda is in jeopardy

The Democrats’ two-track plan for getting U.S. President Joe Biden’s legislative agenda through Congress is threatening to become a four-way train wreck among moderates and progressives in the House and Senate.

While they debate the who, the how and the when, the real trouble is the why.

Making laws is always messy, and the details, timing and logistics of these particular bills may be especially so. But it would be a mistake to say this is the main problem. The sticking points are not the allegedly unreasonable stance of Arizona Sen. Kyrsten Sinema or which chamber should go first. The problem is a lack of vision: What is the guiding principle of this legislation?

It’s tempting to think of this as merely a messaging issue. Early on, the White House cast its “Build Back Better” plan as an investment in “human infrastructure,” a catchy but unhelpful phrase. Another way to define the goal is to judge the package by size rather than rhetoric, and on that score the biggest single priority is extending the expanded child tax credit, which was included in last spring’s American Rescue Plan and began sending out checks to millions of families in July.

The House’s bill allocates to $535 billion, or roughly 15% of the $3.5 trillion total, for a four-year extension of the program, which has been hailed as huge success in reducing child poverty by left-of-center think tanks. That’s only half of the $1.1 trillion that would be required to fully fund it over the 10-year budget window. Moreover, Senate Democrats are looking to reduce that $535 billion to $330 billion.

If poverty reduction were the guiding principle behind the Build Back Better plan, then maybe negotiations could start with the assumption that the child tax credit, and similar direct assistance programs, be fully funded. Negotiators could then add other measures according to Congress’s appetite for spending and how effectively they served the goal of poverty reduction.

That this isn’t happening is a sign that poverty reduction isn’t really at the core of the Build Back Better plan. Indeed, there is no core vision. This creates an unstable situation: Everything is up for grabs and no one can plausibly argue that their preferred initiative is truly central to the overall success of the proposal.

Contrast this with the Republicans’ process for 2017’s Tax Cuts and Jobs Act. Yes, President Donald Trump said the goal was simply to “cut, cut, cut” taxes. But House Speaker Paul Ryan had a clear vision of what he wanted to do: Simplify the tax code by broadening the base and lowering rates on the individual side and attracting investment to the U.S. by modernizing the code on the corporate side.

There were roadblocks. Trump single-handedly shot down Republicans’ attempted transformation of business taxation (he said it was too hard to understand), in the process increasing the cost of the bill by more than $1 trillion. Sen. Ron Johnson of Wisconsin attempted to sabotage the effort because so-called pass-through businesses were getting smaller tax cuts than corporations were, which was not an oversight but part of the plan.

In both cases, certain factions of the GOP had to bend on their principles. Fiscal conservatives had to vote for a bill that increased the debt. Advocates for greater simplicity had to stomach the monstrosity that became Section 199A of the tax code.

Because Republicans had some guiding principles, however, there was a way to judge the demands of the various factions. A strategy for mitigating the damage could be hammered out and the caucus could move on.

It may be too late to rally Democrats around a guiding principle, and there is no guarantee it will make the legislative process any easier. On the other hand, it probably can’t get much worse.

In that spirit, here is a suggestion for how Democrats can justify their $3.5 trillion: Reframe it as a down payment on America’s future — and the hodgepodge of spending initiatives as time-limited pilot programs.

Tell the American people that the unprecedented challenge presented by the pandemic is going to require everyone to be open to new ways of doing things, new opportunities to invest end and new threats to guard against. Assure them that the president and congressional Democrats are prepared to do the same — and so they aren’t signing America up to any open-ended commitments. Instead, they want to give the American people the chance to see these programs in action and then decide, together as a nation, which to keep and which to discard.

Karl W. Smith is a Bloomberg Opinion columnist. He was formerly vice president for federal policy at the Tax Foundation and assistant professor of economics at the University of North Carolina. He is also co-founder of the economics blog Modeled Behavior.