Georgia Gives Biden an Opportunity to Be Bold

(Bloomberg Opinion) -- Democrats appear poised to take narrow control of the Senate in the wake of Georgia’s runoff election, giving President-elect Joe Biden an opening to pursue bolder and more imaginative policies than seemed possible just days ago.

To get congressional support for his agenda, Biden will have to pull together progressives and moderates in his own party, bear independents in mind, and also pick off some Republican members of Senator Mitch McConnell’s caucus. But this will be easier if McConnell is dethroned as majority leader.

A number of urgent tasks require Biden’s attention, but we’ll focus on the economic landscape and the federal response to the Covid-19 pandemic, as we have in a series of previous columns over the past year. These are massive challenges in and of themselves, so how should Biden approach them?

In his campaign, Biden highlighted an array of economic policies he promised to embrace, including a much-needed and long overdue tax hike on the wealthiest Americans. Biden’s administration should be able to significantly roll back the massive tax cuts that President Donald Trump and his allies engineered and, in so doing, help address the searing economic injustices that have accompanied rampant wealth and income inequality in the U.S.

Biden has also advocated expanding access to Medicaid and affordable health care, beefing up unemployment insurance and creating a national jobs corps. He wants to offer more federal support to entrepreneurs, promote clean energy, rebuild the nation’s infrastructure and enhance the economic relief measures that were initiated with the CARES Act last spring and extended modestly since then.

All of this is being considered amid a pandemic that has exposed Trump’s White House as inept and dangerously disengaged, tested the wherewithal of state and local leadership, and strained the resolve of average Americans. But Covid-19 also affords Biden an opportunity to demonstrate how the federal government can promote economic progress and healing.

An effective Covid-19 relief package can’t be an exotic Band-Aid. It needs to do more than support the economy for weeks or months. It should help lay the foundations for profitable and productive companies and a more prosperous workforce. This will require considerable investment in high-quality education, infrastructure and public health, and a more expansive safety net for vulnerable Americans.

If Biden is serious about creating a national jobs corps, then the federal government should hire every unemployed American at a living wage of, say, $58,000 a year. This would cost roughly $1.1 trillion annually — far more than either political party has offered — but it’s an amount that the government could absorb and manage. It also would greatly reduce the inefficiencies, squabbles and fraud surrounding the various unemployment and income-assistance programs that have been doled out over the past several months.

Biden should also reposition the Department of Homeland Security to help address government weaknesses that Covid-19 has exposed. Biden could empower DHS to coordinate the initiatives of several federal agencies — including the departments of Treasury, Transportation, Health and Human Services, Labor and Education — to bolster preparedness in public health, workplace safety, infrastructure and other key areas. DHS could also coordinate federal investments to create a national network of public hospitals and medical clinics, enhance public transportation, and provide digital access in low-income urban and rural areas. 

Investment in infrastructure, in particular, would be a huge boon to the U.S. economy. It’s no secret that the country’s roads, bridges and public transportation are crumbling, so that’s an obvious place to start. But stopping there would be a mistake. Infrastructure plays a crucial role in two of the country’s biggest challenges: winning the fight against climate change and delivering economic prosperity to all Americans.

Any serious attempt to tackle climate change will require a meaningful reduction in greenhouse-gas emissions, roughly a third of which is generated by transportation. As early as 2016, research showed that most gas-guzzlers could be replaced with low-cost electric cars available at the time, which would significantly reduce emissions, even accounting for greater consumption of electricity. The Biden administration can promote and expedite electric-car adoption by building a network of charging stations alongside existing gas stations, eventually replacing them altogether.

But perhaps the most important infrastructure investment resides in the digital realm. Covid-19 has accelerated a trend that has been underway for years: moving work, schooling, shopping and entertainment online. All this requires fast, reliable and affordable broadband service, which is in short supply outside of homes and offices.

That’s a problem for an economy heavily dependent on the internet. But it can be solved by building a national broadband system akin to the national highway system that the federal government created in the 1950s. The new highways allowed labor, goods and people to move more cheaply and easily around the country, paving the way for business expansion, investment and job creation that benefited companies, workers and the broader economy.

A national system of free and reliable broadband would have widespread benefits. It would enable businesses to reach more consumers, educational resources to reach more Americans, and employers to reach a greater pool of workers — boosting the economy and making the U.S. more competitive. It’s hard to imagine a more worthwhile investment of taxpayer dollars.

Biden’s economic policy priorities should be aimed at three fundamental goals: ensuring that all Americans maintain an adequate standard of living until the Covid-19 crisis ends; backstopping essential public and private services; and equipping the economy and workers to be productive, innovative and competitive through the end of the century.

As Biden builds a legislative coalition on Capitol Hill to support his agenda, he must also sell it to the American public. This is where the president-elect’s decades of public service and his understanding of the federal machinery will come into play. Georgia has handed Biden the opportunity to set the U.S. economy on a more sure-footed path, and he should seize it.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Timothy L. O'Brien is a senior columnist for Bloomberg Opinion.

Nir Kaissar is a Bloomberg Opinion columnist covering the markets. He is the founder of Unison Advisors, an asset management firm. He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young.

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