Yahoo Finance This week in Bidenomics: Stuff your plan, man
Joe Biden has plans. Most Americans don’t know what they are. They don’t seem to care what Biden’s plans are, either.
The annual State of the Union spectacle highlights the disconnect between political America and the rest of the country. TV networks run the speech live and commentators assess its historic significance. Most ordinary people find something else to do.
Biden’s presidency reflects this disconnect more than most. Unemployment is at historic lows and most other indicators show a solid economy. Biden has signed several major bills into law, including infrastructure and green-energy spending most Americans say they support.
Yet Americans are in a dismal mood, and Biden can’t talk them out of it. As Biden ticked off his accomplishments during his Feb. 7 State of the Union speech, Gallup released data showing the percentage of Americans saying they’re worse off than a year ago jumped from 41% at the beginning of 2022 to 50% at the beginning of 2023. That’s a material downgrade in Americans’ sense of their own well-being. Gallup has been asking this question since 1976, and the only time Americans were gloomier was during the depth of the Great Recession in 2008 and 2009.
Inflation certainly explains some of the dismay. But inflation has fallen consistently since peaking last June at 9%, and it seems likely to drop further in 2023. Gas prices, which heavily affect consumer psyches, have dropped from $5 last June to a manageable $3.45 or so. Home prices are coming back to earth. So are rents. Egg prices caused a momentary freakout but they’re coming down, too.
Something else is bumming people out, and Biden hasn’t figured out what it is. He says he wants to run for reelection in 2024, and analysts view his SOTU speech as a warmup for a possible ’24 campaign. If so, Biden’s reelection bid is already underwhelming.
Some elements of the plan Biden keeps touting are holdovers from his first two years as president: A surtax on billionaires. Free preschool for all 3- and 4-year-olds. Two years of free community college for anybody who qualifies. A permanently beefed up child tax credit.
There’s nothing inherently wrong with any of these ideas—except that voters are hardly clamoring for them. These were all part of Biden’s “build back better” plan that failed in Congress in 2021. BBB didn’t fail because Republicans killed it. Democrats controlled both the House and the Senate at the time, and there weren’t even enough votes among Democrats to pass these items.
Especially revealing was Biden’s effort to make the broader child tax credit permanent. Democrats did expand that tax break, as part of the American Rescue Plan that passed in March of 2021. The expanded credit went into effect for six months, and put hundreds or thousands of extra dollars into the pockets of parents who qualified. Democrats thought voters would demand that Congress make the benefit permanent, but no such demand materialized. The expanded credit expired at the end of 2021. Pffft.
Other element of the build back better program did end up in the Inflation Reduction Act Democrats were able to get through Congress in the summer of 2022. But the biggest provisions were green-energy programs and a couple of small tax hikes to help pay for them. None of the major social-welfare provisions that were in BBB made it into the green-energy bill. So Biden is touting them now, as if they’re unfinished business. More like unwanted business.
There are some new elements to the Biden plan. But reduce your expectations. Biden is now taking on “junk fees” such as credit-card penalties and unadvertised hotel-bill add-ons. Okay, great, everybody would love to save a few bucks in annoyance charges. What else?
Well, Biden has laudable goals to improve mental-health treatment, reduce opioid deaths, defeat cancer and beef up research on new Covid variants. Perfectly fine. But if Americans aren’t aware of Biden’s big infrastructure bill or the largest package of green-energy provisions in American history, they’re not likely to take note of smaller-ball items, even if they can help real people in real life.
Then there are the usual go-nowhere partisan-warfare parts of Biden’s plan, such as “comprehensive immigration reform,” which Congress comprehensively dismisses year after year after year. Biden wants to ban assault weapons, as does virtually every Democrat and many others who wonder why gun lobbyists are always able to kill this common-sense move. You’ve heard it all before.
As everybody in Washington knows, Congress isn’t going to pass any of Biden’s wish-list ideas now that Republicans control the House for the next two years. That leaves Biden with two goals: Try to impress voters with pragmatic ideas that make Republican priorities look wild by comparison and tee up hot issues that might excite voters if he does run again in 2024.
But junk fees? Is that what will be new about the next Biden presidential campaign? Much of the other stuff he’s already tried. Where he's succeeded, voters don’t seem to know it. Where he failed, he failed because voters didn’t care as much as he hoped they would. Biden certainly doesn’t lack a plan, but for now he does lack voters who are behind everything he wants to do.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman
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