Manchin’s “concern” about the national debt is only worthy of an eye-roll

 

Joe Biden’s Build Back Better plan may or may not be inching toward some kind of resolution, but then we hear that Joe Manchin is still “uncertain” that he will support a $1.75 billion spending bill because of his “concerns” about the national debt. But his “need” to review the bill’s “impact” on the debt is no less worthy of an eye-roll than any other complaint by “conservatives” about spending more than you take in, when it’s only an “issue” when the Democrats are in control. It’s no “big deal” when Republicans are in control, and you never hear Manchin complaining at those times.

For some historical perspective provided by the website The Balance, debt-to-GDP was 44 percent even with FDR's New Deal on the eve of World War II. Immediately after the war, debt-to-GDP was 119 percent, the highest it would be until the pandemic, and the country didn’t fall apart. Debt-to-GDP had fallen to under 40 percent under LBJ even with his war on poverty and the Vietnam War. Debt eventually shrunk to 31 percent of GDP by 1974, then doubled that by 1992. It “shrunk” to 55 percent of GDP in Bill Clinton’s last year in office; up to this point, debt has been kept under "control" because tax rates were still high enough to keep the country underneath the 77 percent that the WTO had marked as a "red-line" for a nation's debt. Most of the debt was created not by social spending, but by war.

Debt-to-GDP  then rose to 82 percent by 2009 thanks to the Iraq War, tax cuts and the Great Recession. The percentage of debt to GDP went up a couple of points a year until 2020, when during the pandemic the debt-to GDP went up 22 percent, lower only than the 23 percent jump in 1944.  The national debt rose a record $5 trillion in 2020, to 129 percent of GDP. Most of this deficit spending was specifically targeted for short-term economic relief incurred by business lockdowns during the pandemic; it wasn’t meant to institute long-term benefits.

Biden’s original $3.5 trillion spending bill was aimed to institute new programs and policies; while it sounds like a “lot,” much of it was to be instituted over many years, meaning that it would not add significantly to the debt (currently at $28.2 trillion) in the short-term, and its effect on the deficit limited over time, depending upon how much of it is actually paid for through new tax provisions. Unfortunately, many people simply do not understand that the clean energy proposals are not simply money poured into a hole; they have long-term beneficial impacts in both energy self-sufficiency and maintaining a livable environment, which needs to be done now, and not when it is too late because of short-term concerns about elections.

Guaranteed paid family and sick leave is—for now—axed from the spending bill, thanks to Manchin, who obviously has some quirky ideas about what “need-based” means. The Los Angeles Times notes that only nine states mandate that all employers provide both paid family and sick leave. Only 23 percent of private-sector employees have access to unpaid parental leave, and that is only at the discretion of the employer. The 1993 Family and Medical Leave Act only covered employees of large companies; if you are employed part-time or with a small business—meaning 45 percent of workers—you have no such right, unless the employer voluntarily allows it.

What social relief programs are still left? The so-called “expanded child tax credit” was part of the pandemic relief bill, and would under the current spending proposal be only good for another year, unless extended by Congress. Even for that fig leaf, Manchin is demanding work requirements and a cap on income. As Harold Gleckman in Forbes noted, Trump’s tax cutting allowing household’s earning up to $400,000 the benefit of the child tax credit was patently absurd, but Manchin’s limit of $60,000 is much too low. His insistence for work requirements to receive any child tax credits would leave many more in abject poverty, and encourage not just the hiding of income to qualify, but report “phantom” income to have enough to qualify for the credit.

What else is there in the spending bill that will “transform” America? No free community college, by there will be free pre-school for all children ages 3-4. If family paid leave somehow makes it in, it will likely be by which employers are paid subsidies which they in turn pay to private insurers to administer. This is like giving Medicare taxes to private insurers to run as a “for-profit” enterprise, in which private insurers decide who gets what, when—and more importantly—if.

There will be funding to prop-up the ACA, and Medicaid expansion for 2.2 million uninsured people in 12 Republican states that have blocked it.  $150 billion for an affordable housing proposal is still possible, down from an initial $330 billion. Bernie Sanders and Nancy Pelosi still are holding out hope that some drug pricing plan can be worked out, with Kyrsten Sinema still the principle problem. Nobody should hold their breath about the inclusion of some kind of dental provision in Medicare, with or without a voucher program.

The bill as it stands includes $555 billion in clean energy investments, electric vehicle and clean energy tax credits, gives aid to communities disproportionately affected by pollution for mitigation efforts, electric mass transit and ports, and offer grants to local communities to convert buildings to green energy. It would also create something called the Civilian Climate Corps, a New Deal-like workforce that envisions training up to 300,000 workers in “green” jobs.

Of course what is not in there was probably the most ambitious proposal: the Clean Electricity Performance Program, which Manchin opposes because he claims that it will create change “too fast” in his state—as if this country doesn’t embrace needed climate mitigation fast enough. Here, the country has been presented with a golden opportunity to be a world leader, and instead of utilities having incentives to transition to clean power, Manchin must protect his stock portfolio, and that of his son, in “dirty” energy, which outstrips that of any other senator.

How will all of this be paid for? Manchin did support a slight cut into Trump and his  buddies corporate tax giveaway, even though Trump himself never seems to have made enough “profit” to pay a dime in taxes in many years. Sinema, naturally, did not support even a token “cut” into the tax cut. But it appears that she does support a minimum tax on billionaires, although that is currently not in the bill. What is for now is a surtax on multimillionaires and a minimum tax on large corporations.

To be honest, this is getting very tiresome, although at least it appears that something is going to get done. But something much greater could have been done, and complaints about the “Better” plan being too “costly” is simply partisan fear-mongering that holds no water, and is simply more of the same short-sightedness that has plagued this country for a long time.