Is the Era of Austerity Over?

No doubt, Biden’s Rescue Plan will bring a measure of breathing space to hundreds of millions of Americans who live on the economic margins. And its passage — on top of the $2.2 trillion CARES Act last summer, and the $900 billion package last December — does suggest a sea change in how the American political class views the federal budget. Compared to the relentless deficit haggling of the Clinton, Bush, and Obama eras, this is something different. As the left-wing pundit James Medlock puts it, “The era of ‘the era of big government is over’ is over.”

But a key element in this picture, usually elided in Democratic Party victory laps, is the way the events of the long last decade — the financial crash, the slow and unequal recovery, and now the global pandemic — have pushed everything in American politics to the budgetary left. Yes, the Democrats who just voted for $1.9 trillion in deficit finance relief are far more openhanded than they were in 2008. But so are the Republicans who voted for $3.1 trillion of deficit-financed relief just last year.

As the 2017 tax cuts showed, the GOP remains a party of upward redistribution — but it is no longer, in any meaningful sense, a party of “small government” or hardline austerity. This departure is at least as dramatic as any changes in the Democratic position. Remember, in February 2009, as Congress debated Obama’s much smaller stimulus, polls showed that fewer than 25 percent of Republicans supported the package.

But the age of Trump is not the age of the Tea Party. This year, even as Senate Republicans dutifully held the line against Biden’s bill, their own constituents had already abandoned the fight: 70 percent of Republican voters support direct payments of $1,400 or larger, while 60 percent support the overall $1.9 trillion Rescue Plan. Even one of the most “revolutionary” features of the Biden bill, a direct federal allowance for children, claims 60 percent support from Republicans.

In 2009, Republicans responded to the passage of the Obama stimulus by launching an organized activist movement that denounced, at its core, all forms of government spending. This year, even before Biden has signed his bill, Republican senators have already started trying to take credit for its generosity.

The lack of grassroots opposition to the Rescue Plan produced a fundamentally different political landscape in the Senate. As the political scientist Dave Hopkins told the Washington Post, “moderate vulnerable Democrats feel a lot more freedom to vote for a big spending bill in the current moment — because the polls suggest it’s popular, and because the case against Democrats is being made on Dr. Seuss and Mr. Potato Head, not the debt.”

Today’s Republican base, much like professional-class Democrats, has come to view politics chiefly through the lens of culture war, not raw economic interest. Even if some business-class Republicans wanted to gin up a Tea Party–like response to the stimulus, they could see that the new GOP coalition was not behind them. Polls show that white voters without college degrees, the cornerstone of the party’s Trump-era electorate, prioritize $1,400 checks above “bipartisanship” at an even higher level than college-educated whites.

This is an irony worth contemplating. A divided working class may be a disaster for left-wing politics, but it is not necessarily a stumbling block for budgetary largesse. To the extent that class dealignment — and the influx of these working-class voters into the party of Trump — has demobilized Republican resistance to government spending, then it probably has greased the wheels for Congress to achieve a measure of economic redistribution.

But that is a far cry from the idea that Democrats, on their own, have somehow morphed into a party of aggressive social-democratic reform.

Patching a Flat Tire With Cash

To be sure, Levitz, Brooks, and others are right that the Democratic Party’s macroeconomic common sense has clearly evolved in the last decade. An emphasis on boosting employment has displaced a reigning fear of inflation, with real consequences. The size and scope of the Rescue Plan, along with the trillions already spent under Trump, should be enough to give the Left pause before issuing further rebukes about “neoliberal austerity.”

Socialists should be brave enough to recognize a new breed of budgetary liberalism for what it is — and to note its huge improvement on the older breed of punishing deficit politics.

Yet to understand the true contours of this Democratic shift, a little perspective is in order. A good budget bill is not the same thing as “fundamental change,” let alone “big, structural change.” For all the huzzahs about progress toward American social democracy, it is hard to see how anything here even begins to alter the social relations between worker and boss, citizen and state, labor and capital. There is a reason why 170 business leaders, including the CEOs of Goldman Sachs, Google, Lyft, Siemens, Visa, and Zillow (and Vox Media, too!), released a letter supporting the package. The one provision in the House bill that did challenge the preferences of some business leaders, the $15 minimum wage, was dispatched in the Senate without any countervailing pressure from top Democrats.

Moreover, this is not just a budget bill, it is expressly a one-year emergency relief bill. All big goodies in the Rescue Plan — the checks, the unemployment boost, the state aid, the child allowance — will vanish by the end of 2021, if not before. In a few months, Democrats may choose to extend the spending, or they may choose not to. Nothing in the bill forces their hand, one way or another, or creates a political constituency able to force their hand.

It has become a custom of liberal journalism to compare every Democratic president who passes a bill to Franklin Delano Roosevelt. (In 2009, remember, Michael Grunwald wrote a whole book declaring the Obama stimulus The New New Deal.) This is simple hyperbole. The Wagner Act of 1935, after all, paved the way for the massive expansion of unions, effectively resetting the balance of power between capital and labor for decades; the Social Security Act, meanwhile, established the foundations of a permanent welfare state; public jobs programs put millions to work and revolutionized the functions of government in the service of the public good. Nothing in the Biden agenda even aspires to this kind of structural transformation.

A more relevant comparison is the previous peak of American budgetary liberalism, the Great Society of the 1960s. The flawed achievements of that era fell far short of what socialists and labor leaders demanded, but nevertheless produced important and lasting welfare programs like Medicare, Medicaid, and food stamps.

It may be true, as both Sanders and the New York Times declare, that the Rescue Plan is the best bill for working families in “a generation.” But in so many ways, that says much more about the last generation than the bill itself! Nothing in this one-year emergency relief package measures up to the antipoverty measures of the Great Society.

The real question is what comes next. Will the one-year child credit actually become a permanent family allowance program? What will be the fate of the Protecting the Right to Organize (PRO) Act for labor, or the voting rights bill H.R. 1, both of which require a fierce fight — and some kind of procedural reform — to get through the Senate? Will Democrats feebly accept defeat on the minimum wage, or will they return to the battlefield? And what are the prospects for health care, where even the mildest of structural reforms, a public insurance option, now seems to be on the back burner?

Even this full suite of reforms, today considered the edge of what is possible, would fall far short of social democracy, or Roosevelt’s economic bill of rights: a living wage, a decent home, medical care, and a good education for all Americans. Yet it would, in fairness, represent something closer to “fundamental change” — a new peak of budgetary liberalism that could set the stage for further struggles to come.

But none of that has been achieved yet — and there is reason to be skeptical.

The Case for the Working Class

Since 2019, at least, the Jacobin-style case against class dealignment is not simply that college-educated voters are “pulling the Democratic Party to the right.” That’s not just a caricature, it’s a misreading. The argument from the Left, rather, is that the disappearance of class politics from the electoral system will make truly structural change much more difficult to achieve.

Yes, an affluent, suburbanized Democratic Party is willing to support some deficit-financed welfare programs, from Medicaid expansion to child tax credits. But is it able to tax its base — heavily! — in order to fund the much larger reforms that a social democratic society would require, like single-payer health care? Is it able not simply to “support,” but actually to sacrifice and struggle for working-class priorities, like the minimum wage, the growth of labor unions, or a job guarantee? The evidence so far, in Congress and in deep blue states, is not especially cheering.

None of this means that we should simply cluck our tongues at Biden’s Rescue Plan. It brings real relief to hundreds of millions of Americans and offers a lifeline for struggling state and local governments. But dressing up an emergency budget bill as “fundamental change” does not advance the cause. If Democrats are to turn the tide and win durable majorities — in statehouses and the Senate — they need to take much bigger risks on structural reforms that would improve the lives of working-class constituents for the long haul. They need new permanent programs that win the loyalty of working people and engender a thicker sense of social solidarity.

Given the disposition of the Senate, and the uncertain priorities of Democratic leaders, the harsh truth may be that the best of Bidenism is already in the rearview mirror. Make no mistake, the stimulus bill is an important step in the right direction — and if it is just the start of a historic legislative blitz to strengthen the working class, I will join the chorus of voices praising our new suburban alliance for social democracy.

But as things stand today, the opposite alternative seems just as likely. If the Rescue Plan goes down in history as “the signature Democratic bill of 2021,” as Chris Hayes has already called it, then this new era of budgetary liberalism will fall far short of its predecessors.