Biden’s First Year: Signs of a New Progressive Approach, and the Same Congressional Obstacles

At the time, we were optimistic. The new administration had passed the critical American Recovery Plan and announced plans to make economic investments that met the scale of the COVID-induced economic crisis. We were also excited that many of the appointments and executive orders from the new administration suggested a new approach to structuring government programs—one that centered racial equity, worker power, and direct spending—and directed a new and badly needed focus on care work and climate change.

A year—or really 265 days—later, we remain optimistic about the Biden administration’s approach to governing but are more concerned than ever about the threats facing our democracy, including the antidemocratic structures of our governing institutions. Where the administration has been able to act, we have seen a new vision for a progressive economy emerge; although, to be clear, there is still much more it can and must do to move this vision closer to a reality. On the other hand, where the administration’s proposals have run into the Senate and the courts, we have seen progress stymied.

A New, Progressive Approach to Economics

The most exciting advance we have seen in the last year has been a new vision for the macroeconomy—one that centers full employment as a goal, that views rising wages as a feature not a bug, and that acknowledges the government’s responsibility for ensuring markets work for the public, not just corporations. 

This approach has been a success. The December 2021 jobs report showed that over the year, the civilian labor force rose by 1.62 million workers, employment rose by 6.09 million, and the average hourly wage rose by $1.40.

Biden has been clear that his goal is not just to get us back to the pre-pandemic economy, but to make the economy better in qualitative and quantitative ways for more people. And he has continued to insist on investing in the economy even as prices have risen—a welcome departure from past administrations that would have tried to bring down prices by slowing the growth of the economy. Instead, the Biden administration has been clear that fixing supply chain issues and addressing corporate concentration alongside continued investments can bring down prices while growing the economy. Continuing to grow the labor force and raise the employment rate is particularly important for Black and brown workers. While the unemployment rate has fallen to 3.2 percent for white workers, it remains at 7.1 percent for Black workers, still unacceptably high. 

At the same time, the new administration has appointed new leadership at the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and other independent agencies, which have begun to build new structures to rein in unchecked corporate power. We have seen this leadership in action as the SEC, for example, has issued new rules to limit stock buybacks and the FTC has prioritized investigations of concentrated corporate power at some of the country’s largest retailers in response to the continuing pandemic supply chain disruptions.  

The administration too has taken corporate concentration and supply chains seriously, with a welcome new emphasis on all-of-government’s responsibility for shaping markets to serve the broader public. One of the best examples of this is the historic adoption of a Green Steel Deal, which moved away from the neoliberal strictures of the World Trade Organization (WTO) and established a new rulebook for trade that centers concerns about climate and worker power.

It is also worth celebrating the administration’s successful negotiation with governments around the world of something unthinkable just 10 years ago: a new global minimum tax rate of 15 percent to curb corporate tax avoidance.

Policies Centering Racial Equity Still Need Structure

In its earliest days the Biden administration also issued executive actions signaling a new, progressive approach to racial equity. On his first day, the president signed an executive order committing to advance racial equity through the whole of the federal government. Under the order, the Domestic Policy Council (DPC) and the Office of Management and Budget (OMB) will work with other agencies to identify and remove barriers to opportunity for underserved communities. 

Only a week later, the administration issued another executive order specifically addressing the climate crisis. It included provisions to direct a significant realignment of federal climate and clean energy investments toward a goal of targeting 40 percent of overall benefits of investment in support of our most at-risk communities on the front lines of climate change. This concept, known as Justice40, has been a magnet for unprecedented race-forward climate advocacy, including some success in putting a Justice40 stamp on the Build Back Better proposal.

While both executive orders signaled a promising new approach, the details of their execution—the new structures they will build—are still emerging. For example, questions remain about how frontline stakeholders will be engaged to ensure that climate investments reach and are controlled by their communities. As Justice40 enters its second year, moreover, there is growing concern among advocates about issues of transparency and accountability in the implementation of the program, in addition to concerns about insufficient funding relative to the scale of community needs in the face of climate change.  Further, even with substantial investments, a just clean energy transition also requires concerted regulatory and other administrative actions to directly limit continuing fossil fuel extraction and combustion, with a priority on emissions reductions benefiting environmental justice communities.  

Meanwhile, one action the Biden administration has not taken to advance material equity despite its ability to act without Congress is student debt cancellation. With the stroke of a pen, the Biden administration can cancel the outstanding $1.6 trillion in federal student debt. Doing so would correct decades of policy choices that have shifted the cost of higher education onto individual students, choices that have disproportionately affected Black and brown students and helped exacerbate and perpetuate the racial wealth gap. The administration should take immediate action to cancel student debt.

Congress’s Rules Are an Obstacle

It’s vital that the Biden administration act quickly where it can address its priorities—from racial equity to the climate crisis—because Congress has proven it cannot.

While Congress passed the American Rescue Plan quickly and a substantial infrastructure bill worth celebrating, the administration’s signature Build Back Better Act has of course been stuck. Thus, we are far from the scale of investment we need to address the climate crisis, promote true racial equity, and build a more broadly equitable economy.

In addition, the stalling of Build Back Better has allowed some of the most significant achievements of the American Rescue Plan to lapse, including the Child Tax Credit expansion, a near-universal benefit for families that dramatically reduced child poverty and hunger. This lapse is tragic on its face, but also raises broader challenges to the important goal of restoring Americans’ trust in government. The government should help stabilize families’ incomes across periods of crisis like the pandemic, but we can’t restore Americans’ faith in the government to play this role if the resources it provides vanish because of politics.

Other efforts to significantly restructure the economy have also been lost in congressional negotiations. The Biden administration’s initial proposals to tax corporate profits and wealth would have promoted equity and constrained corporate power. But Congress has thus far bent to corporate lobbyists and refused to move forward on making these new policy proposals law.

We Need to Focus on Democracy

The obstacles Congress poses to the administration’s broader agenda speak to the desperate need to reform our institutions to promote and reflect a multiracial democracy. The filibuster is blocking a range of policies with broad support, including, notably, voting rights legislation. The failure to end the filibuster in the first year, despite broad support across the Democratic Party, has left the Biden administration in constant negotiations with two senators in a caucus of 50.

The filibuster is of course only one of the many grave threats to American democracy. The very composition of the Senate itself is deliberately skewed to give disproportionate power to America’s smallest and whitest states. The courts have been seized by a conservative minority that is systematically taking apart our civil rights laws. And there is an active antidemocratic movement seeking to further curtail voting rights in most states. In the coming year, we need to reckon with these facts, meet these threats head-on, and restructure our institutions to be truly democratic, or much of our progressive economic agenda will continue to stall.