How Bidenomics Can Unite America | Opinion

A quarter century ago, I and other members of Bill Clinton's cabinet urged him to reject the Republican's proposal to end welfare. It was too punitive, we said, subjecting poor Americans to deep and abiding poverty. But Clinton's political advisers warned that unless he went along, he jeopardized his reelection.

That was the end of welfare as we knew it. As Clinton boasted in his State of the Union address to Congress that year, "The era of big government is over."

Until last Thursday, that is, when Joe Biden signed into law the biggest expansion of government assistance since the 1960s—a guaranteed income for most families with children, raising the maximum benefit by up to 80 percent per child.

As Biden put it in his address to the nation, as if answering Clinton, "The government isn't some foreign force in a distant capital. No, it's us, all of us, we the people."

As a senator, Biden had supported Clinton's 1996 welfare restrictions as did most Americans. What happened between then and now? Three big things.

First, COVID. The pandemic has been a national wake-up call on the fragility of middle-class incomes. The deep COVID recession has revealed the harsh consequences of most Americans now living paycheck to paycheck.

For years, Republicans used welfare to drive a wedge between the white working middle class and the poor. Ronald Reagan portrayed Black, inner-city mothers as freeloaders and con artists, repeatedly referring to "a woman in Chicago" as the "welfare queen." At a time when Americans were putting more hours into paid work than ever, women were particularly susceptible to the message; they had started streaming into the workforce in the 1970s in order to prop up family incomes amid stagnating wages and later the decimation of male factory jobs. And the tension between the working class and the poor was easily exploited: Why should "they" get help for not working when "we" get no help, and we work?

By the time Clinton campaigned for president, "ending welfare as we knew it" had become a talisman of so-called New Democrats, even though there was little or no evidence that welfare benefits discouraged the unemployed from taking jobs. (In Britain, enlarged child benefits actually increased employment among single mothers.)

Yet when COVID hit, public assistance was no longer necessary just for "them." It was needed by "us."

The second big thing was Donald Trump. He, too, was a master of the us vs. them mentality, and he replaced economic Reaganism with narcissistic grievances, claims of voter fraud, and cultural paranoia. But he also obliterated concerns about government giving away money. The CARES Act, which he signed into law at the end of March, gave most Americans checks of $1,200 (to which he attached his name). When this proved enormously popular, he demanded the next round of stimulus checks be $2,000.

But Trump's biggest giveaway was the GOP's $1.9 trillion tax cut in 2018, the benefits of which went overwhelmingly to the top 20%. Despite promises of higher wages for everyone else, nothing trickled down.

Meanwhile, during the pandemic, America's 660 billionaires—major beneficiaries of the Trump tax cut—became $1.3 trillion wealthier. They could take this increase in wealth, divide it up, and give every American a $3,900 check—and still be as rich as they were before the pandemic.

President Joe Biden
President Joe Biden Alex Wong/Getty Images

But the real game changer here is the breadth of Biden's plan. Under the COVID relief bill the President signed into law last week, more than 93 percent of the nation's children—69 million kids—receive benefits. Americans in the lowest quintile will see an increase to their incomes by 20 percent; those in the second-lowest will see a nine percent increase; those in the middle, a six percent increase.

Rather than pit the working middle class against the poor, this bill unites them in its sheer expansiveness. And you can see this in how it's polling: Over 70 percent of Americans support the bill, including 63 percent of low-income Republicans, who represent a quarter of all Republican voters. Younger conservatives are particularly supportive, presumably because people under 50 have felt the brunt of the four-decade slowdown in real wage growth.

Given all this, it's amazing that zero Republican members of Congress voted for it, while 278 voted for Trump's tax cut for corporations and the rich.

The political lesson is that today's Democrats, who enjoy popular vote majorities in presidential elections, can gain political majorities by raising the wages of both middle class and poor voters, while fighting Republican efforts to suppress the votes of likely Democrats.

The economic lesson is that Reaganomics is officially dead. It's clearer than ever that conservative economists arguing that tax cuts for the rich create job-creating investments, while assistance to the poor creates dependency are simply wrong.

Bidenomics pushes exactly the reverse: Give cash to the bottom two-thirds and their purchasing power will drive growth for everyone. This is far more plausible. We'll learn how much in coming months.

Robert B. Reich is an American political commentator, professor and author. He served in the administrations of Presidents Gerald Ford, Jimmy Carter and Bill Clinton. Reich's latest book, The System: Who Rigged It, How We Fix It, is out now.

The views in this article are the writer's own.