Every Single Fucking Dollar of Biden's $4.5 Trillion in Proposed Spending, Ranked
The take from one economish (not a typo)
A disclaimer: I’m not an economist. I studied economics in college and took enough courses for a major, but I transferred and lost some credits in the quarters-to-semesters conversion and ended up just short of a major. So I’m an econ minor, not that that’s still a sore spot 20 years later or anything. My MA is in International Relations with a concentration in development economics, so it’s an IR degree with a lot of econ coursework. I try to keep up with the econ discourse; I subscribe to some stuffy publications that I occasionally guilt myself into reading. I think a good way to put it is: For a comedian, I’m a decent economist.
Joe Biden has proposed $4.5 trillion in new spending and tax cuts over the next ten years -- about two percent of the U.S. economy -- and it’s received less coverage than Bean Dad. There’s been almost no talk of what’s in the two bills; most articles say something vague like “money for families”, which could mean anything from a child care tax credit to a pillowcase full of scratch-off tickets. In the interest of talking about something other than size -- we’re all total size queens these days, our discourse is simply “big good!”/”no, big bad!”, as if what the money’s being spent on makes no difference -- below are the components of the American Jobs Plan and the American Families Plan ranked according to how jazzed I am about each element. The ones that barely cream-cheese my bagel at all are listed first, and the ones that really bubble my Bellini come last.
My method: I’m ranking these according to my assessment of the benefits of that type of spending. I’m not assessing whether Biden is asking for too much or too little; I’m not in a position to assess opportunity costs, nor can I price anything out (I’ve never bought a bridge across the Allegheny River so I don’t know what they cost). Also, I’m ignoring the revenue side of these bills; I wrote an article that captures my thoughts on corporate taxes, and one day I’ll write about how glad I am that capital gains and dividend taxes are being raised (so you’ve got that to look forward to!), but this article is just about spending. Also, I grouped spending according to how it makes sense to me; the categories the White House came up with seemed to mix apples and oranges -- I think they were created for optimal political impact.
So, onward, with the ones that glaze my ham the least coming first...
10. Domestic manufacturing and job training (American Jobs Plan, $405 billion)
Funding to facilitate investments in manufacturing ($52 billion)
Create new office to monitor and fund production of critical goods ($50 billion)
Funding for semiconductor manufacturing and research ($50 billion)
Workforce development infrastructure and worker protection ($48 billion)
Funding to upgrade research infrastructure in laboratories ($40 billion)
Establish Dislocated Worker Program and invest in sector-based training ($40 billion)
Provide funding for “community-based small business incubators” ($31 billion)
Protect against future pandemics through medical countermeasures ($30 billion)
Establish regional innovation hubs and Community Revitalization Fund ($20 billion)
Created “centers of excellence” to support research at Historically Black Colleges and Universities and Minority Serving Institutions ($15 billion)
Funding for workforce development in underserved communities ($12 billion)
Funding for enforcement of workplace protections ($10 billion)
Establish Rural Partnerships Program ($5 billion)
Other ($2 billion)
I’m sorry, America: I just can’t get into this “we’ve got to save the factory!” narrative that you love so much. I mean, I liked it in Tommy Boy, and if Biden was asking for $1 billion to supply little coats to fat guys, I could get behind that. But much of this money just won’t go very far. A lot of this is political stuff -- it’s stuff that plays well in the upper Midwest because that’s the location of three of the six states that actually matter in the Electoral College.
One thing that annoys me about our obsession with manufacturing is that I don’t think most people actually want to work in a factory. I think they like the idea of someone else working in a factory. They like the general concept of burly men in denim doing jobs that require gloves in settings with lots of sparks in the background. I think that’s the main reason manufacturing jobs loom so large in our politics. But if you actually ask someone: “Hey, do you want a job where you stand for eight hours a day attaching Component A to Component B over and over and over again?”, they’ll say “hell no.”
I’m not saying this money will be wasted; it’ll just be spent on things that I feel are less impactful than other things on this list. For example: This part of the bill spends heavily on job training. Now: If you believe that global trade is broadly a good thing (as I do), or if you’re a person who simply knows that global trade is expanding and nobody can stop it (as everyone should), you need to deal with the fact people who work in manufacturing in the developed world are going to be harmed by this change. Which is why I support ways of helping people negotiate that transition. But I like things like enhanced unemployment insurance and other ways of providing cash to help with transitional costs (I think moving should be subsidized) a lot more than, say, job training. Not many ex-factory workers will become system analysts. No matter how much money we spend trying to make it happen, the number of 60 year-olds who go from working at a John Deere plant in Georgia to doing platform integration for LinkedIn will be few.
Not everything in this bundle is low-impact. A few things are obviously pandemic-preparedness, so that’s probably money well spent. There’s also an effort to secure “critical” goods, which I assume means medical supplies and seminal manufacturing components, which is probably a response to China’s aggressive efforts to corner the market on essential goods. So fair enough. The fat probably comes from the items that are heavy on the NGO-sector feel-good horseshit words: “community based”...”innovation hubs”...”centers of excellence”. These items could probably be trimmed, but they also probably won’t be because of Joe Manchin and the Electoral College.
9. Construction and maintenance of government buildings (American Jobs Plan, $155 billion)
Upgrade and build new public schools ($50 billion)
Improve public housing ($40 billion)
Child Care Growth and Innovation Fund and tax credits to encourage companies to build childcare facilities ($25 billion)
Modernize VA hospitals and clinics ($18 billion)
Upgrade community colleges ($12 billion)
Modernize federal buildings ($10 billion)
There’s absolutely nothing wrong with this spending; there are just things further up this list that have higher multipliers (“high multiplier” = the money you put in brings a lot of money back). This spending is like buying clothes: You have to do it at some point. You could always say “I’ll just stretch things a little longer,” but if you do that forever, you’ll be going to weddings in a “Fun Run 2006” t-shirt and a torn-to-shit pair of jorts. Some of our buildings are the equivalent of a Fun Run 2006 t-shirt and a torn-to-shit pair of jorts. Might as well fix ‘em now.
8. Health care ($600 billion total; $400 billion in American Jobs Plan and $200 billion in American Families Plan)
Expanded home care services under Medicaid ($400 billion)
Enhanced Obamacare premium subsidies from American Rescue Plan made permanent ($200 billion)
This is also worthy spending, it’s just that, uh... -- how do I put this? -- ...old people are a classic low-return investment. If you get my meaning. That doesn’t mean that we shouldn’t spend on them -- we should! The $400 billion will support better end-of-life care, and the $200 billion will help the Obamacare marketplace be a better option for the ever-growing blogger/Uber-driver/cam girl sector of the economy. Few people who receive home care under Medicaid will go on to found Fortune 500 companies, but this is the government stepping into a market blind spot to improve quality of life, so that’s all to the good.
I think it’s worth taking a moment to reflect on the fact that a little more than a year ago, the hot topic in the Democratic primary was a Medicare for All plan that would have cost tens of trillions of dollars. For the record: If I could design a health care system from scratch, it would be similar to British-style nationalized healthcare, so actually a step beyond Medicare for All-style nationalized insurance. But I’m also a realist, and I know that 78 things would need to change before NHS-style healthcare could happen, and 61 of them are impossible, and Medicare for All faces similar odds, so what the fuck were we even talking about? Why did we spend months acting like half the Democratic field were characters in an Ayn Rand novel for only supporting a public option? We’re not going to get Medicare for All; we’re not going to get a public option -- not right now, anyway. It’s going to take a pandemic, historically low interest rates, two miracles on the same day in Georgia, and as many blowjobs as Joe Manchin requests just to get this $600 billion. We might as well have been debating “would you rather have laser vision or a talking horse?”
7. Housing (American Jobs Plan, $146 billion)
Build over a million housing units and eliminate zoning and land use policies ($126 billion)
Incentivize the building of $500,000 homes for low and middle-income buyers with a Neighborhood Homes Investment Act tax credit ($20 billion)
There’s one thing in here I love and one thing that’s pretty “meh”. The thing I love is money to incentivize less-restrictive zoning. I wrote a whole article about how this is going to be the Summer of Zoning, the bottom line being that restrictive zoning leads to inflated living costs, higher carbon emissions, lower class mobility, racial segregation, longer commutes...just everything bad. If you told me “we’re either going to tighten zoning laws or release a million deadly cobras into the city,” I would lobby hard for the snakes.
The thing that’s pretty “meh” is the Neighborhood Homes Investment Act tax credit. I’m not going to spend too much time on it because it’s not the end of the world, but basically it’s money to incentivize building in blighted neighborhoods. So, there are some positives there: An abandoned property can really drag down a neighborhood. But this strikes me as money to build houses in places where nobody wants a house. I’m pretty sure this is mostly another Electoral College thing; God how I wish I could abolish the Electoral College in exchange for tolerating a certain number of snakes.
6. Water Infrastructure (American Jobs Plan, $111 billion)
Upgrade and monitor drinking water supplies ($56 billion)
Replace all lead pipes and service lines ($45 billion)
Monitor PFAS substances (toxic chemicals) in water ($10 billion)
Now we’re getting into the really good stuff. My time working at EPA convinced me that lead is an underrated menace; it poisons people so that they -- in medical terms -- “just ain’t right”. But lead poisoning is so subtle that we often don’t know that it happened. Whatever your shortcomings -- bad temper, short attention span, serial arsonist -- you can blame it on lead and you’re probably not entirely wrong. There’s even some evidence that lead poisoning may be a significant cause of crime. I managed to get a piece about lead on Last Week Tonight, so watch that if you’d like to learn more, but please don’t watch the ender with The Muppets -- I hate the ender. I got rewritten by fucking Elmo. There’s a lot of bad blood between me and Sesame Street.
One caveat: It might not be cost-effective to remove literally every lead pipe in the country. For starters: We often don’t know where lead pipes are, and sometimes it won’t make sense to tear apart the city trying to find them. Also, some lead pipes are rarely used, and many are in private homes, and not all are “leaching” (releasing lead into the water) all that much. Which is to say: Removing 90 percent of the pipes might solve 99.8% of the problem. At which point we’d probably be better off spending money elsewhere.
5. College support grab-bag (American Families Plan, $306 billion)
Tuition-free two-year community college ($109 billion)
Increase Pell Grants for low-income students ($80 billion)
A program to improve community college completion and retention rates ($62 billion)
Two years of subsidized tuition for students at Historically Black Colleges and Universities, Tribal Colleges and Universities, and Minority Serving Institutions from families making less than $125,000/year ($39 billion)
Teacher training ($9 billion)
Grants to HBCUs, TCUs, and MSIs ($5 billion)
Aid for health care workers pursuing graduate degrees ($2 billion)
Well well well, money for community colleges. And who do we know who works for a community college? That’s right: THE PRESIDENT’S WIFE!!!
Looks like the grift is finally paying off, Jill! It’s an old scam: Teach community college for 28 years, establish trust, wait for your husband to get elected president, and then CASH IN!!! And it almost worked! But as much as I respect the long con, I can't get behind $109 billion for the Jill Biden slush fund.
In all seriousness, though: We should invest more in community colleges. Too many people get liberal arts degrees from four-year colleges; the economy of the 21st century doesn’t require this many Icelandic Folklore/Trampoline double-majors. At the same time, we need more people who know a trade; if your pipes are leaking, calling a Jazz Composition major won’t help, but calling a plumber will. And that plumber will make decent money.
I’m also glad we’re increasing Pell Grants. I’m not a fan of the “make college free for everyone!” approach -- that’s such an obvious giveaway to the rich and upper-middle class. I’d much rather make college affordable for everyone, and let the rich continue to buy spots in college for their dullard kids on a $1 million-per-IQ-point-below-90 basis.
I can’t really assess the effectiveness of this $62 billion plan to improve graduation and retention. My wife used to teach at a college with lots of low-income students and she feels there are programs that can help. Also, I could pull on the philosophical thread of whether it makes sense to subsidize tuition at HBCUs but not other schools -- why does a student at Grambling deserve money but a student at LSU doesn’t? -- but at the end of the day this is money going to students who need it so whatever.
4. Expanded Earned-Income Tax Credit from American Rescue Plan made permanent (American Families Plan, $125 billion)
I love the Earned-Income Tax Credit. Inclusionary zoning and the Earned-Income Tax Credit. You’d better believe I’m a lot of fun at parties!
If I could design a tax system, its main features would be highly progressive income taxes at the top and highly progressive negative income taxes at the bottom. Which is to say: That first dollar you earn would be heavily “enhanced” -- maybe your first dollar actually gets you $1.75. As a person makes more money, the subsidies would gradually fade out, but it would always make sense to get a better job; it’s not a program that steeply fades out at a certain income level, which discourages career advancement. Negative income taxes also let the market operate; they carry fewer tradeoffs than distortionary “front-end” policies like the minimum wage. They incentivize work; they’re a partial antidote to the labor shortages we’re seeing during this moment of very-generous unemployment insurance. They involve less red tape than programs you have to apply for. Negative income taxes are just really, really, really good policy, and the EITC is a negative tax.
That’s the wonky way to frame my argument. Here’s the less-wonky way: People who work at Wendy’s deserve to make a decent living. Have you ever worked at Wendy’s? I have. It sucks. There are so many hot things -- I averaged about one second-degree burn per eight-hour shift. I also always came home feeling like I’d walked through a grease tornado. And then -- worst of all -- there’s you fucking people, the customers, who stand in line for ten minutes and still don’t know what they want, who fail to comprehend the meaning of the sentence “pull through to the second window”, and who ask for a Mountain Dew refill by holding their cup aloft like a medieval lord demanding a fresh flagon of mead. If you’re working a job like that, you deserve to get by, and a hefty EITC can go a long way towards making that happen.
There are only two things I don’t like about the EITC: 1) You can only collect it at the end of the year, and 2) Not everyone who’s eligible for it gets it (about 20 percent of eligible households don’t claim it). A challenge for policy-makers going forward will be to make taxes more frequent and more automatic -- the child tax credits in this bill are a pretty good model. But even with those shortcomings, an enhanced EITC is an under-the-radar policy that will help a lot of people.
3. Good ol’ fashioned infrastructure and R&D (American Jobs Plan, $656 billion)
Modernize bridges, highways, and roads ($115 billion)
Funding for high-speed broadband ($100 billion)
Modernize public transit ($85 billion)
Improve passenger and freight rail ($80 billion)
Safeguard critical infrastructure ($50 billion)
Funding for the National Science Foundation ($50 billion)
General R&D ($35 billion)
Improve airports ($25 billion)
Fund for projects that are beneficial to the regional or national economy ($25 billion)
Improve road safety ($20 billion)
Something about reconnecting neighborhoods ($20 billion)
Improve ports and waterways ($17 billion)
Funding for the National Institute of Standards and Technology ($14 billion)
Other ($10 billion)
Research at HSBCs & MSIs ($10 billion)
This isn’t spending; this is investment. Infrastructure is classic high-multiplier stuff; Moody’s estimates the GDP multiplier of infrastructure spending at 1.5 (which is very good!). If we had recently come through a period of high infrastructure spending, one could argue that new spending would have a lower return, but the reality is that infrastructure spending as a percentage of GDP has been low for a while. Matt Yglesias argues that we should lean away from roads and bridges and towards broadband and water infrastructure, and I take his point. I haven't run a granular analysis of specific projects; we should certainly prioritize those that deliver the most facilitative bang for the buck.
Some Republicans are arguing that high-speed broadband isn’t infrastructure. I think that’s insane. Infrastructure is systems that support functionality; in 2021, that definitely includes broadband. I honestly can’t believe Republicans are dragging their feet on this now, post-2020, a year in which half-paying-attention to a video conference while clicking through a Buzzfeed list about “Which Duck Tales Character Are You?” became a staple of the modern workplace. There’s actually a near-perfect parallel for broadband expansion: The Rural Electrification Act. In the '30s, this bill brought electricity to hillbillies, bumpkins, shit-kickers, and yokels across this great nation, thus allowing them to distill moonshine and ogle their cousins after sundown. No-one today would question whether electricity is infrastructure, nor will anyone in the future question spending that brings our much-deserving hayseeds into the era of HD porn and half-assed video chats with Grandma.
2. Low-carbon infrastructure (American Jobs Plan, $782 billion)
Tax credits for clean energy (about $400 billion)
New rebates for the purchase of electric vehicles and incentives to building 500,000 charging stations across the US ($174 billion)
Invest in power infrastructure ($100 billion)
Support clean energy manufacturing with federal procurement ($46 billion)
Climate change research and development ($35 billion)
Establish Clean Energy & Sustainability Accelerator ($27 billion)
The White House almost seems to be downplaying how much low-carbon infrastructure is in this bill -- the American Jobs Plan divides these line-items between several categories. If the green provisions of this bill are being downplayed, that just demonstrates the insanity of our politics; Republicans are so committed to never doing anything about climate change that they’re allergic to infrastructure spending that also happens to mitigate climate change. And that's true even though high-carbon fuel sources are definitely on their way out -- recall that we just had a President who is more into coal than Quentin Tarantino is into feet, but even he couldn’t keep coal production from dropping. I view spending in this category as infrastructure “plus” -- it has all the positive effects of regular infrastructure, and it has the added benefit of helping us make a transition that we need to make anyway.
My rule on climate change policy is that I strongly prefer things that drive innovation; most of the things on this list check that box. My reasoning is that because most future GHG emissions will come from the developing world, and because we can expect the developing world to use whichever technologies are cheapest, GHG levels won’t plummet until the most cost-efficient technologies are clean ones. One of the problems I had with the Green New Deal is that it wouldn’t have come close to solving climate change; we would have spent insane amounts of money deploying technology that’s a generation or two removed from what the world needs, and the effects on innovation would have been minimal. Most of the items on Biden’s list encourage development by providing infrastructure that new technologies require.
Which brings us to the 500,000 charging stations. It’s the low-carbon element of Biden’s plan that’s gotten the most attention, partly because Biden went to a Ford plant for an A-plus photo op -- check out Mr. Cool Shades out for a cruise:
The logic behind this spending makes sense: People are hesitant to buy electric cars because it’s hard to find places to charge them, so overcoming that barrier will expand the EV market. And yet I can’t claim to be completely over-the-moon about the fact that this is the big, headline, 12-figure climate change investment; I feel a bit like someone told me “You’re getting one item off the menu at Ruth’s Chris!” and then added “It’s a Sprite!” Okay...thank you? I mean, I like Sprite. My hesitancy comes from the fact that some people think the future of electric vehicles will be “battery-swapping” technology instead of charging stations. I don’t know who’s right. If people are completely sure that these charging stations will be used, then I’m on board, but I’d hate to go all-in on a technology that will immediately become a white elephant.
1. Childcare support (American Families Plan, $1.2 trillion)
Child tax credit expansions from American Rescue Plan are extended and made fully refundable ($450 billion)
Create a national family and medical leave program (American Families Plan, $225 billion)
Subsidies for child care and funding for child care providers (American Families Plan, $225 billion)
Free Universal Pre-K for three and four year-olds ($200 billion)
Child and Dependent Care Tax Credit from American Rescue Plan is made permanent ($80 billion)
Expanded summer EBT (food stamps) for children ($25 billion)
Expanded free meals for kids in high-poverty areas ($17 billion)
Healthy foods incentive demonstration program ($1 billion)
Something about using food stamp eligibility to help people getting out of prison re-integrate into society (cost unknown)
God I wish I’d invested in a kid two years ago -- those things are soft-fontanelled gold mines. My sister-in-law just had her second; it’s like she got in on the ground floor at Google.
If you consult the multipliers in Moody’s Analytics -- and yes, I’m the type of person who evaluates things like “a child being able to eat” by consulting the multipliers in Moody’s Analytics -- you’ll see that the only spending that rivals infrastructure in terms of multiplier effect is spending on children. Nothing (that Moody’s looked at) has a higher multiplier than food stamps. This makes intuitive sense; the more kids have healthy food, stable homes, and attentive parents, the more likely they are to become high-functioning, capable adults, a.k.a. the high-productivity worker drones that drive our economy. It’s also true that juggling a child and a career is one of the major pressures of modern life; this money helps solve that puzzle. People always say that children are our future -- that was bullshit until right now. If we spend this money, then the children will be our future, because we will have invested the capital to actually produce some good ones.
We’ve spent so little on child care over the years that we’re likely to get outstanding value-for-money with this spending. A family leave program is long overdue and should help close the wage gap (especially if dads actually use their leave, as they should). Help with child care is also key, because society frowns on tying your child to a stake in the backyard while you go to work. And the fact that we could cut child poverty more than in half seems really worth doing; using the snakes-tolerated-to-societal-good-achieved metric I introduced earlier, my back-of-the-envelope math says that cutting child poverty in half is worth 6.1 trillion snakes!
We should take a moment to recognize something kind of remarkable about these bills: They represent investments in things that will pay off way down the road. Politicians usually spend on things that will pay off immediately and make the ruling party popular; there was a moment last year when I worried that “everyone gets a check with the president’s name on it!” would become fiscal policy standard operating procedure. But most of Biden’s proposed spending takes the long view; the main effects of infrastructure take a few years, and investments in people take even longer. I’ve been pretty candid about the stuff I’d pare back (the manufacturing stuff), but on the balance, this isn’t sugar-rush spending to help Democrats win the midterms; this is -- in my humble opinion -- mostly substantive stuff that will pay off down the newly-paved road.