Is President Biden’s $2.3 trillion jobs plan too big? Conservatives are arguing that the package is too expensive and its broad reach is unnecessary.
In order to assess the size and necessity of the bill, it’s important to situate Biden’s jobs plan within a larger federal budget context. Looking at the spending patterns going back decades, the upshot is that the Biden plan is really not all that big, especially given how overdue it is. In fact, progressives have argued that the package, while ambitious in its aims, doesn’t provide enough resources. The plan as proposed is less ambitious than Biden’s campaign proposals, and it already enjoys widespread popularity. There’s plenty of room to make this bill larger, and to make that easier by cutting some of the most egregious uses of federal dollars.
$2.3 trillion sounds like a lot, and it is. But trillions have been spent and are still spent every year in the course of normal government business, on everything from wars and weapons to much-needed but exclusionary social programs like the GI Bill, to tax cuts for corporations and the wealthy. To reach the level of spending that is really needed to solve problems like climate change and inequality, it will be necessary to be as bold with this jobs package as the country has been with so many other costly endeavors.
President Biden’s $2.3 trillion infrastructure package is worth half of the $4 trillion annual federal budget — but the infrastructure plan spans a period of eight years. On an annual basis, that amounts to an approximately 14 percent increase to the federal budget for a finite number of years. It’s significant, but not earth-shattering. Meanwhile, we must remember what this country has already proved it is willing to spend trillions of dollars on, over the years.
War Spending: $6.4 Trillion
Over the past 20 years, the U.S. has spent $6.4 trillion on wars that have served only to further destabilize the Middle East, cause hundreds of thousands of deaths and enrich military contractors. If that money had been spent on infrastructure and clean energy instead of destructive and deadly wars, the U.S. could have had a fully renewable energy grid by now. The Pentagon is one of the most egregious uses of trillions of dollars.
That $6.4 trillion doesn’t even include the regular, non-war Pentagon budget. President Biden’s $2.3 trillion jobs package works out to about $280 billion a year. The last time the military budget was less than that amount was 1951.
Just a week after announcing his jobs plan, President Biden released a budget proposal that pegged Pentagon spending at $753 billion. That’s more than the $740 billion the Pentagon got this year under President Trump, and it’s more than two and a half times the annual value of the jobs proposal. Every year in recent memory, the Pentagon has accounted for more than half of the discretionary federal budget that Congress allocates each year. Federal spending on domestic militarization and policing, including Immigration and Customs Enforcement, Border Patrol, the FBI and the need to take care of veterans of our wars adds another 10 percent. All told, war and militarization accounts for nearly two-thirds of annual discretionary spending.
Even the amount the Pentagon awards to contractors each year exceeds the jobs plan’s annual projected expenditure. In 2020, due to a COVID bump (of which the Pentagon spent $1 billion intended for COVID on jet parts and body armor), the Department of Defense awarded $422 billion in lucrative and often non-competitive contracts. Last year, the Department awarded $383 billion in contracts. And the year before that, $358 billion. The Pentagon’s expenditures on military contracts alone have surpassed the amount of Biden’s infrastructure package every year for decades.
Investments in infrastructure, clean energy and education all create more jobs than the military, dollar for dollar.
The Pentagon has big plans for future spending, too. There’s the $1.5 trillion estimated cost to perpetuate the nuclear threat into the 21st century. And another $1.6 trillion for a single plane — the F-35 fighter jet, recently famous for literally shooting itself.
These are foolish and destructive uses of money. If the Pentagon can afford trillions for its dangerous future, we should be able to afford at least that much for priorities that promote health, environmental transformation, economic justice and the survival of humanity.
20th Century Investment: Not for Everyone
Launched in response to the Great Depression, the New Deal cost $41.7 billion in non-inflation-adjusted terms. The New Deal was worth about 40 percent of the 1929 GDP; today, a jobs package worth 40 percent of GDP would come in at more than $8 trillion, much closer to the $10 trillion that some progressives have suggested would come closer to meeting the true need.
And the New Deal was in a sense just the first part of a package. A decade and a half later came initial investments in the interstate highway system, which cost $468 billion in today’s dollars. The GI bill, which sent nearly 8 million veterans to college and job training and put home ownership within reach for so many, cost another $107 billion.
In short, the U.S. would be unrecognizable today if not for politicians who had the foresight that big investments would be worth the cost. Of course, the benefits came with drawbacks, too: the highway system now has us trapped in reliance on carbon-spewing cars and trucks, and the GI Bill and the New Deal melded to further cement economic inequality for Black people.
All the more reason to enact bold new policies that transition to a clean, 21st century transportation system and lift up Black, Brown and Indigenous people instead of doubling down on inequities. And these new policies should be every bit as ambitious as the originals.
Trump Tax Cuts: $2.3 Trillion
The Trump tax cuts that passed in 2017 were estimated to cost the U.S. government $2.3 billion over 10 years. The Biden jobs plan would do much to undo the worst of the Trump cuts, raising $2.5 trillion even without fully restoring the corporate tax rate to its former level. More progressive proposals have identified trillions more that the U.S. is leaving on the table with tax policies that favor corporations and the wealthy. In effect, this is trillions that the U.S. government is giving away.
Trump made the tax problem much worse, but he didn’t create it. Even prior to the Trump tax cuts, the U.S. gave away more money in tax breaks that heavily favored the wealthy than it spent on the entire federal discretionary budget. Fair tax policies, including taxing financial transactions on Wall Street, taxing investment income the same as income from work and strengthening the estate tax could bring in an additional $886 billion a year in federal tax revenue. Right now, that money is bolstering extreme wealth inequality and its distortions on democracy.
In a mark of where the resources really are in this country, the wealth of the nation’s billionaires grew by $1.3 trillion from the beginning of the pandemic in March 2020 to February 2021. The billionaires’ pandemic windfall brings their total wealth to $4.3 trillion. These profits aren’t government spending, but government tax policies have made it possible, and it’s time to call in the bill.
A Country of Tremendous Resources
Trillions of dollars are spent in this country, and by the federal government, on a regular basis. A $2.3 trillion jobs plan is not particularly remarkable in the scheme of things — it only seems that way because the federal government has grown so stingy toward real investment. But the federal government has been more than able to put forth hundreds of billions of dollars on a regular basis for war, tax breaks, and even for infrastructure and social programs that benefit some at the expense of others.
The new jobs plan has an opportunity to change all of that, by finally putting adequate resources into the country’s future. The Biden administration put forth a wide-ranging plan with fairly bold aims. Now it’s just time to recognize that a bold approach to funding could require more than $2.3 billion, and that there are precedents for even higher spending levels. Progressives need to drive this point home, because conservatives will waste no time claiming the opposite.