Is This the Way to Set Up New Social Programs?

As Democrats scramble to come up with a bill of social and climate-related programs that can pass, two big questions seem to dominate.

First, while normally you would think that government should decide what it needs to do and then come up with a way to pay for it, that is not what Democrats are doing.  Rather, they are figuring out how much they want to spend first.  Actually, it’s not how much they want to spend.  It’s what number sounds good politically.  $3.5 trillion was too high for some people.  Joe Manchin said $1.5 trillion was okay, but that’s too low for the progressives.  So they will probably come up with some number in between, though apparently closer to $1.5 trillion than $3.5 trillion.  Still, their first question isn’t what to do; it’s how much to spend. 

The second question is even more bizarre.  The taxes for the bill are coming in over a ten-year period; i.e., we will be paying for whatever is in the bill over ten years.  But a lot of Democrats, including apparently the President, aren’t going to be giving us programs that last ten years.  They want to give us a lot of programs, but just for a few years each, while still paying for them for a full ten years.  On the other hand, some Democrats want to do fewer things, so they can actually keep them in place for all, or at least much, of the ten-year period.  An article in The Wall Street Journal explains the situation:

“Democrats have differed over how to trim the size of the package, with progressives pushing for the party to reduce the duration of many of the bill’s different programs and preserve them all, even if just for a short duration. Centrists and top House Democrats have favored focusing resources on a smaller number of programs for the long term.

Democrats said that Mr. Biden endorsed the progressive approach during the meetings on Tuesday.

‘I think he is with us that we need to invest in as many of those transformational areas as possible, even if it means for some of them a shorter amount of time,’ Rep. Pramila Jayapal (D., Wash), the chairwoman of the Congressional Progressive Caucus, said.

‘I favor the other approach, I think we should have few programs that we do well but the reality is we’ve got a math problem,’ said Rep. Mike Thompson (D., Calif.), who attended the meeting with moderate Democrats.  ‘I think shorter duration is what’s going to be.’”

I would assume the progressives’ theory is to put a whole bunch of programs in place for a year or two and hope they will be so popular that Congress will be forced to figure out a way to continue them.  Obviously, there are a number of issues with this.  Is setting up programs for a year or two in the hopes they might be extended really the way to do social reform?  I understand the theory of paying for things like a bridge or highway over a ten-year period.  I don’t understand the theory of paying for one or two years of a social program over ten years.

In the excerpt from The Wall Street Journal, Representative Mike Thompson said: “I think we should have few programs that we do well but the reality is we’ve got a math problem.  I think shorter duration is what’s going to be.”  Actually, it’s not a “math problem”; it’s a political problem: Democrats want to have European-style social programs, but they don’t want to pass European-style taxes, especially a broad-based VAT, to pay for them.  And so, they are going to pass programs that last two or three years and that we pay for over ten years.

Of course, this ignores the question of what happens if Republicans win back the House and/or Senate in 2022 or the presidency in 2024.  How are they going to continue those programs then?  If they programs were put them in place with a real funding mechanism now, it could be harder to end them. 

I don’t know what is going to happen, but if President Biden gets his way and we set up social programs for two or three years that we pay for over ten years – well, that is not a sign of a serious country.