Biden’s spending plans aim to bail out US capitalism

US President Joe Biden’s spending plans have been hailed by some as a dramatic turn to the left. Bernie Sanders’ campaign manager Faiz Shakir even praised his efforts as “investment in working people on a scale that we have not seen since FDR” and the New Deal of the 1930s.

But they are designed above all to restore business profits and the US’s economic power, still hard hit from the COVID crisis that has produced more than half a million deaths. Even as vaccinations roll out and businesses reopen, there were still 8.4 million fewer jobs in March than before the pandemic.

Just as importantly, Biden wants to quiet discontent at the massive inequality that produced the explosive Black Lives Matter protests and the growth in support for democratic socialism and figures like Bernie Sanders.

The US never fully recovered from the previous 2008 economic crisis, with the bitterness it produced fuelling the rise of Donald Trump. Even sections of the billionaire class recognise this.

As the bosses’ Financial Times admitted before last year’s presidential election: “There have been times since the 2008 crash when popular resentment of inequality, especially among the young, has threatened to spill over into demands for total systemic change.” Biden’s spending plans, it wrote, might, “avert a larger reckoning further down the line”.

His $US1.9 trillion COVID relief bill, which passed Congress in March, may sound huge. But it is little different to the hundreds of billions of dollars Scott Morrison has pumped into the Australian economy during the pandemic to avoid economic collapse. Biden’s measures include $US1400 one-off stimulus cheques and $US300 a week to fund unemployment payments until September, simply to avoid cuts to existing payments.

Also included were $US70 billion to fund vaccination and testing and $US170 billion to assist schools and universities to reopen.

Despite the talk of helping working class people, the measures are simply temporary cash injections to keep people’s heads above water until the pandemic passes, not efforts to reduce entrenched inequality.

The plan for a $US15 minimum wage, which would have permanently lifted millions of workers out of poverty, was abandoned completely after opposition from within the Democratic Party.

Biden has also announced an enormous $US2.26 trillion infrastructure and climate spending plan, designed to deliver millions of jobs.

And he wants to increase the corporate tax rate to pay for it, reversing tax cuts made by Trump, although only partially.

More spending on education, child care and welfare is still coming that could take his total plans to near $US7 trillion over a decade.

But given the size of the US economy, the figure could be far larger. Democratic Socialist Alexandria Ocasio-Cortez says that $US10 trillion is necessary to fund the climate transition needed.

There is money to boost the take-up of electric cars, rebuild crumbling bridges and roads, and retrofit housing for energy efficiency, among many other measures.

But while the package would upgrade the electricity grid, paying for renewable energy itself is being left entirely to business.

Brett Hartl of the Center for Biological Diversity called it an “industry-friendly plan” that “squanders one of our last, best chances to stop the climate emergency” and “won’t even come close” to meeting climate goals.

How much of this actually goes ahead will depend on whether it can get through the Senate—and even gain the support of conservative Democratic Party senators. Still, on paper it is the most ambitious plan of its kind since at least President Lyndon Johnson’s “Great Society” programs of the 1960s.

But like Biden’s stimulus bill, the spending is designed as a shot in the arm for US businesses. It would shovel billions in contracts to corporations and, as the White House’s own fact sheet declares, aims to “position the United States to out-compete China”.

Reasserting US imperial power after the embarrassment and unpredictability of Trump’s presidency is among Biden’s central aims.

After just a month in office, he launched his first bombing raid, killing 22 people in an attack on Iranian-backed militants in Syria. He has declared, “America is back, ready to lead the world”.

Even as he announced the final withdrawal of troops from Afghanistan, ending one of the US’s “forever wars” after 20 years, Biden made it clear this was “to focus on the challenges that are in front of us … to shore up American competitiveness to face the stiff competition from an increasingly assured China”.

His administration has continued military exercises in the South China Sea and gone out of its way to send a strong signal of its support for Taiwan against any Chinese efforts at a takeover. Biden and the Democratic Party remain loyal servants of US capitalism.

By James Supple


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