Biden’s stimulus shows he’s governing like Bernie

Joe biden bernie sanders
Joe Biden greets Sen. Bernie Sanders before the Democratic presidential primary debate at Drake University on January 14, 2020 in Des Moines, Iowa. Scott Olson/Getty Images
  • The House just passed the $US1.9 ($2) trillion stimulus bill, sending it to Biden’s desk to be made law.
  • The package provides direct relief to workers and families in ways that could cut child poverty.
  • In these and other ways, it’s positively Bernie-esque – even though it comes from President Biden.
  • Visit the Business section of Insider for more stories.

The historic $US1.9 ($2) trillion American Rescue Plan just passed the House of Representatives for a second time, sending it to President Joe Biden’s desk to be made law as soon as this week.

The package is the first major legislation of Biden’s presidency – and it enjoys widespread support. A new Morning Consult poll found that 75% of voters support the package, including 59% of Republicans. In fact, poll after poll has shown the popularity of going big with the package.

The elements of the package that make it so popular are strikingly similar to policies long favored by one of America’s most popular senators: Sen. Bernie Sanders of Vermont.

Since he emerged as a serious candidate for president in 2016, Sanders has loudly advocated for the United States to join the ranks of developed countries that have embraced social democracy.

The stimulus is chock-full of social-democratic ideas: Putting cash into Americans’ pockets, beefing up their unemployment benefits, and providing a child tax credit, to name just a few.

Although Sanders defines himself as a Democratic Socialist, there’s a big difference between “socialism” and social democracy, as the developed countries Sanders admires so much include pro-market democracies, often Scandinavian ones.

“I think we should look to countries like Denmark, like Sweden and Norway, and learn what they have accomplished for their working people,” Sanders said in a 2016 CNN debate.

The final American Rescue Plan does indeed echo some of those countries.

So it’s not surprising then that Sanders has thrown his support behind the legislation, calling it the “the most significant piece of legislation to benefit working families in the modern history of this country” in a tweet.

-Bernie Sanders (@SenSanders) March 6, 2021

What’s so historic about this stimulus?

Throughout the 2020 campaign, Biden inspired comparisons to (and name-checked) another president who took office during a massive, unprecedented downturn: Franklin Delano Roosevelt.

In fact, FDR’s “New Deal” agenda of the 1930s was a sea change in American politics, injecting the government into American life in unprecedented ways. But it stopped short of establishing a modern welfare state along the lines of those that emerged in Western Europe. Democrats tried again under President Lyndon Johnson’s “Great Society” of the 1960s, but that also fell short of the party’s dreams amid social unrest and the Vietnam War.

Sanders, now the chairman of the Senate Budget Committee, has led a generation of progressives in seeking to rekindle FDR-sized ambitions in the party. At least one economist has called for a “New New Deal” to address the pandemic’s recession and economic devastation. It’s not the first time the New Deal has been evoked in modern politics. Leading progressive Rep. Alexandria Ocasio-Cortez named her plan to address climate change the “Green New Deal.”

AOC
Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez hold a news conference to introduce legislation to transform public housing as part of their Green New Deal proposal outside the Capitol November 14, 2019 in Washington, DC. Chip Somodevilla/Getty Images

With his stimulus, Biden promised to “go big.” The resulting bill spends money a lot like Sanders’ beloved Scandinavian countries.

It includes a one-year provision to expand the child tax credit, where parents could receive up to $US3,600 ($4,671) per child. The Democrats want to distribute that in monthly checks.

As Insider’s Hillary Hoffower and Joseph Zeballos-Roig reported, that measure could be key in halving child poverty – and revolutionize the government’s relationship with parents. Some Democrats want to make it permanent. Biden is one of them.

For some Western European countries, that idea is already a reality: Germany and Sweden both have universal child benefits and Luxembourg boasts a monthly family allowance, while Denmark has a slightly lower quarterly one.

The bill also has funding for some of those who have been left behind or systemically excluded from prior economic policy (including the New Deal). It contains the largest-ever investment – $US31.2 ($40) billion – for Native American communities, who have also been disproportionately impacted by the coronavirus pandemic.

Another provision, as reported by The Washington Post, is $US5 ($6) billion to disadvantaged farmers, something Black farmers stand to benefit from.

An analysis from the Tax Policy Center found that the bill could ultimately give the poorest 20% of Americans a 20% boost in income.

Unemployment line
People line up outside Kentucky Career Center prior to its opening to find assistance with their unemployment claims in Frankfort, Kentucky, June 18, 2020. Bryan Woolston/Reuters

Some major progressive initiatives are still missing from the package

A federal minimum wage hike (which would’ve been the first one since 2009) didn’t make it into the package. It’s something long championed by Sanders, and an issue Biden ran on as well, but Biden and Senate Democrats ultimately respected the parliamentarian’s decision not to include it in the Senate version of the bill.

There’s also the issue of student-loan debt relief. The legislation includes a tax exemption on student-loan forgiveness through 2025, which could set the stage for student loan forgiveness. But while leading Democrats – including Senator Elizabeth Warren – have called for $US50,000 ($64,876) in student loan forgiveness, Biden has said he may cancel up to $US10,000 ($12,975).

Chuck Schumer cancel student debt
Senate Majority Leader Chuck Schumer (D-NY) speaks during a press conference about student debt outside the Capitol on February 4, 2021 in Washington, DC. Also pictured, L-R, Rep. Mondaire Jones (D-NY), Rep. Alma Adams (D-NC), Rep. Ilhan Omar (D-MN), Sen. Elizabeth Warren (D-MA) and Rep. Ayanna Pressley (D-MA). Drew Angerer/Getty Images

The package also contains an important provision for unemployment, extending it through September, but cutting it from $US400 ($519) to $US300 ($389).

While the bill doesn’t deliver on every progressive initiative, it shows a willingness to go big – and a potential shift in how Congress approaches spending.

Millions of Americans will no longer live in poverty because of the act, according to a new analysis from the Urban Institute. That study finds that the plan would reduce the projected annual poverty rate in 2021 by over a third – meaning that the number of Americans living in poverty would shrink by around 16 million people.

“This legislation is about giving the backbone of this nation – the essential workers, the working people who built this country, the people who keep this country going – a fighting chance,” Biden said in a statement.

He added: “On Friday, I look forward to signing the American Rescue Plan into law at the White House – a people’s law at the people’s house.”