Joe Biden’s economic record: Successful, but not transformative

26 April 2023

Joe Biden is now more than halfway through his first term. He just announced his reelection bid.

The initial economic crisis precipitated by Covid is mostly past. So how well did he do?

The answer is not bad, but with serious caveats.

Many analysts and critics feared that Biden would fail to be aggressive enough in fighting the downturn, and that we’d end up with a brutal, drawn-out (non) recovery like that following the Great Recession.

Others hoped that crisis could allow Biden to push through real structural change, strengthening the safety net and permanently empowering the poor and working class.

Neither of those things really happened. Instead, Biden and Congress managed to pass a sweeping recovery package, and avoid the long-term immiseration of 2008.

Biden’s American Rescue Plan in 2021 buttressed demand and kept the economy from cratering.

But because of GOP obstruction, Biden was unable to make his most ambitious programs permanent. In that sense, the Covid downturn, and Biden’s presidency, has been a missed opportunity.

Success

Economist Claudia Sahm last week had a good summary of Biden’s successes.

The focus on inflation has obscured much of the good news for the poor and working class in Biden’s economy.

For instance, Sahm points out that Black men are currently as active in the labor force as white men. That is the first time that has happened since 1972, when we began keeping records.

The participation rate for both is about 70%.

Participation rates for disabled people have also boomed during the pandemic.

Before Covid, rates for disabled participation were at about 19%. Now they’re at 22%.

Remote work has made it easier for disabled people to hold jobs.

People often pushed to the margin of the labor force have been able to get jobs because of the tight labor market.

Even more impressively, food insecurity and poverty declined on Biden’s watch.

During the Great Recession, food insecurity ballooned from 11.1 percent in 2007 to 14.6 percent in 2008.

But that did not happen during Covid. Instead, thanks to expanded benefits, poverty rates actually fell by 9.6%. Child poverty fell even more, by 14%.

The Expanded Child Tax Credit alone, which provided direct cash payments to low-income families with children, lifted more than 2 million children out of poverty.

In addition, the Inflation Reduction Act of 2022 permanently lowered prescription drug prices for seniors. It also made real progress on reducing greenhouse gas emissions.

That’s the good news.

Missed Opportunity

The less good news is that little has been done to make these gains sustainable.

Biden hoped to make the Expanded Child Tax Credit permanent. But Republican opposition, and opposition from Democratic West Virginia Senator Joe Manchin, has made that impossible.

As a result, the tax credit ended, and millions of children fell back into poverty.

Other big Biden initiatives have also been blocked or have stalled out.

His massive student loan forgiveness program, designed to provide $400 billion in relief to tens of millions of Americans, has been blocked contingent on a ruling from the far-right Supreme Court.

A federal program called continuous enrollment, designed to keep people on Medicaid even if they experience a change in income, cut the number of people without health insurance by 2%.

But that program is expiring, and the number of insured is expected to fall again.

When Biden entered office, he hoped to institute sweeping reform to bring down the cost of child-care.

The package didn’t make it through Congress.

Biden’s plan to lower the age of Medicare enrollment from 65 to 60 didn’t pass either.

And the large government expenditures which expanded employment aren’t likely to be repeated with Republicans in control of the House.

In fact, Republicans are trying to use the debt limit fight to repeal large chunks of the Inflation Reduction Act. They threaten to destroy the economy if Biden doesn’t roll back many of his signature achievements.

Biden has refused to negotiate on the debt limit increase, demanding a clean bill. Default seems like a real possibility, though Washington has avoided the worst in previous stand-offs.

In any case, though, Biden is unlikely to advance his other economic priorities.

He’s largely given up on trying to get more funds for Covid relief, ending the Covid state of emergency even though some 1500-2000 people continue to die from the disease every week.

The GOP wants to go backwards

Biden came into office facing a bleak economy contracting quickly due to a terrifying pandemic.

He managed to use the emergency to put in place a massive aid package which prevented further deterioration. More, his policies actually improved the standing of Black people, disabled people, poor people, and others who are most severely impacted in economic downturns.

Programs like the Expanded Child Tax Credit, continuous enrollment for Medicare, and a moratorium on student loans showed that government policy could significantly ameliorate economic hardship.

We have the tools to end poverty, and protect people during recessions, if we want to use them.

But Biden’s tenure has also showed just how much Republicans and conservatives don’t want to help.

The Biden economic response to the pandemic was a huge success.

And the GOP seems determined to never repeat it.

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