Failed with flying colours
Contemporary US capitalism has shown a complete inability to renew itself through reform, argues Jim Creegan
It has been almost impossible for Americans to pick up a newspaper or access an online news feed for the past six months without being assailed by the doleful countenance of Joe Manchin. The Democratic senator from West Virginia has been reeling off one lame pretext after another for refusing to vote for Biden’s signature Build Back Better bill, as originally written.
Over that same period, Biden and Congressional Democrats spared no effort to whittle down the legislation to make it acceptable to Manchin and his fellow rightwing Democratic senator, Kyrsten Sinema of Arizona, who together held the power to kill the bill by withholding their votes. As major provisions were steadily compromised away, it became apparent that the bill to emerge from this process would be no more than a hollowed-out semblance of the one first introduced. Then, on December 19, the bombshell hit: Manchin announced on Fox television that he would not support the bill in any form, thereby dooming the Democrats’ major legislative effort - and perhaps the Biden presidency.
Biden’s legislative gambit first took the form of an omnibus measure, including both a renovation of the country’s physical infrastructure and a significant expansion of clean-energy programmes and the welfare state. A political process then took place which allowed the capitalist class to take from the proposed legislation the provisions it deemed desirable, and dispense with the rest.
First, the proposal was divided into two. The physical infrastructure part became a separate $1.2 trillion bill. It garnered the support of the country’s leading business groups and was passed in the Senate over the summer with the votes of all Democrats and 19 Republicans willing to defy Trump, who counselled opposition to all Biden initiatives. The welfare-state and most clean-energy measures took the form of a second proposal, which became known as the Build Back Better Act (BBB), with an original price tag of $3.5 trillion, to be spent over 10 years, and paid for by increasing taxes on corporations and the wealthy.1
This measure was opposed by all Republicans in both chambers, the National Chamber of Commerce, Business Roundtable, and an army of corporate lobbyists. House Democrats, with the initial support of Biden and House speaker Nancy Pelosi, sought to exert leverage by vowing not to vote on the infrastructure bill alone in the lower chamber, but only in tandem with BBB. This would then go to the Senate for approval, which would require the votes of all 50 Democrats.
But if Biden and the Democrats were not willing to pass one bill without the other, why had they allowed the original, single initiative to be bifurcated in the first place? It would be a mistake to ascribe this manoeuvre to mere political trickery on the part of a Democratic leadership looking for a way to renege on BBB. They had staked far too much of their reputation upon their ability to pass legislation that they could call transformative.
Biden knew, however, that he faced formidable opposition within his own party, led by Manchin and Sinema, who had the power to deny him the 50 Senate votes required for the bill’s passage, and were objecting to many of BBB’s major welfare-state and tax-the-rich provisions without specifying what it would take to get their support. Although Biden’s tactical thinking can only be guessed at, it is not unreasonable to assume he believed that he, through a more protracted negotiation within his own party, could deploy his executive authority and vaunted deal-making skills to persuade the recalcitrant duo to vote for a pared-down proposal that he could still sell to the electorate as game-changing.
He was wrong. He only became aware of his miscalculation, however, after he allowed Manchin - who became obstructionist-in-chief - to strip down almost beyond recognition the broad reformist blueprint the president initially submitted.
Cut to pieces
In its final ill-fated version, funding for the BBB had been cut in half, down to $1.75 trillion from the $3.5 trillion first proposed. Now on the Congressional cutting-room floor were:
- government negotiation of prescription drug prices with big pharma - far and away the measure’s most popular item;
- expansion of Medicare benefits to include dental and vision care; now only the least expensive of enhanced benefits - a hearing cover - remained;
- 12 weeks compulsory family leave for childbirth and serious illness - at first reduced to four weeks, then eliminated entirely;
- a cover for the first two years of community college, the major educational resource of poor and minority youth;
- the bill’s major environmental provision, the Clean Energy Performance Plan, which would have imposed financial penalties upon electric companies that make use of fossil-fuel sources, leaving only much weaker tax credits as incentives for utilities and energy giants to help rescue the planet from destruction.
The more robust of the tax increases on corporations and the rich also fell by the wayside. Gone now were:
- a proposed rise in the corporate tax rate from 21% to 26.5% - replaced by a minimum corporate tax of 15%, applied to corporations with over $1 billion in annual profits over three years;
- a tax increase on the top personal income bracket from the current 37% to 39.6% (the rate was 70% as late as 1981, before the ‘Reagan revolution’ took effect) and an added 3% surtax on individuals with an income of over $5 million; Now the rate on the top income layer would remain the same and there would only be a 5% surtax on annual incomes of more than $10 million and an additional 3% for incomes over $25 million; these taxes would affect only the wealthiest 0.02% of Americans;
- a rise in the tax on capital gains from 20% to 25%; it would now remain unchanged;
- a return of the tax exemption for gifts and estates to $5 million from the increased $11.75 exemption passed under Donald Trump; the Trump-enacted exemption increase would now remain in effect;
- restrictions on the amount of tax-free money high earners can stash in individual retirement accounts - a favourite tax dodge and source of interest income for the rich; such restrictions were eliminated entirely.
Of the popular social welfare provisions of the original bill, only two widely appealing items remained. One was free, universal pre-kindergarten care for children three and four years old. But even this was intended as a grant to state governments, which would have wide discretion as to how the money would be spent. The second - and by far the most beneficial - was an extension for another year of the $3,000 per child tax exemption for families, already contained in a previous Congressional act called the American Rescue Plan, which has lifted 5.5 million children out of poverty. But Joe Manchin still did not agree to retain this benefit, even in the revised bill. He worried privately that parents would spend the money on drugs. It has been shown that the additional income obtained through the credit was spent by most families on children’s clothes, school supplies, food and rent.
Even the greatly eviscerated bill that emerged from negotiations with Manchin was not sufficient to secure any definite promise on his part - or on Sinema’s - to vote for it. The final step toward complete failure was not, however, forced upon the Democrats by the recalcitrant pair, but by the party leaders. In early November the Democrats received a rude shock when Terry McAuliffe, a prominent member of the party’s corporate wing, was defeated in a race for governor in Virginia by Republican Glenn Youngkin, a wealthy businessman - this in a state that had gone to Biden by a voter margin of 11% in 2020. The panic was compounded by the fact that the incumbent Democratic governor of New Jersey, Phil Murphy - expected to prevail with a comfortable majority - was only re-elected by the narrowest of margins.
As Biden’s approval numbers plummeted in public opinion polls, he and leading Democrats became convinced that only a major legislative win had any chance of reviving their fading prospects for retaining their precarious control of Congress in the 2022 mid-term elections. There was only one plausible candidate for the desperately sought victory: Biden’s smaller infrastructure bill.
For the next few weeks, the White House prevailed upon House Democrats to retreat from their pledge not to vote for the infrastructure bill unless coupled with the larger Build Back Better package. By approving the infrastructure bill separately, Democrats were abandoning any leverage they may have had for the approval of BBB, even in its more recently truncated form. But that is exactly what a large majority of House Democrats did.
To persuade them, Biden implored the Democrats to put their trust in his ability persuade Manchin and Sinema. He vaguely hinted that he and Manchin had arrived at something resembling a common framework for proceeding on BBB’s passage, even though the West Virginia senator stated publicly that he had given Biden no definite assurances. Yet in the end House Democrats, including the progressive caucus, folded under pressure from the White House and House speaker Nancy Pelosi. Within that larger caucus, only six Democratic representatives - the ‘squad’, composed of Alexandria Ocasio-Cortez, Rashida Tlaib, Ilhan Omar and Ayanna Pressley, joined by two others, Cori Bush and Jamaal Bowman - stuck to their guns and voted no. But Democratic leaders did not begrudge them their opposition, even though they could spare only three votes to pass any legislation with Democratic support alone.
In the event, the voting deficit was made up by 13 Republicans, who backed the infrastructure bill. With the Democrats having relinquished their power to prevent Manchin, Sinema and big business from getting what they wanted, Manchin now felt free to dispense with the entire charade of negotiations and announce that he would not support Build Back Better under any circumstances.
Biden’s assurances that he can still work something out with Manchin are completely unconvincing. It is now widely acknowledged that Build Back Better is dead in the water. In the final analysis, its failure was not due to inadequate parliamentary tactics, but to the almost total refusal of the capitalist class to permit any major reforms at its expense.
Unlike the 1930s, when the bourgeoisie was weakened by the depression, major corporations and banks emerged in a strengthened position from the great recession of 2008. Whatever differences they may have with the politics of Donald Trump, they can still count on the Republican Party to safeguard their interests on the economic front. And they also exercise enough control over the Democrats to neutralise any attempt to circumscribe their power.
Biden and elements of the Democratic leadership realise on some level that a renovation of the system is necessary to meet multiple challenges: the Covid crisis; the newly-arisen Democratic left; the growing power of the Republican right and its challenge to what passes for American democracy; and, above all, the decline of US global power. Their party and its modus operandi, however, are woefully unequal to leadership intentions.
The party’s inadequacy is evident in the belief that the ruling class can be summoned to system-preserving sacrifice by means of legislation and behind-the-scenes deal-making alone, and in the inability to resist short-term tactical advantage in favour of longer-term strategy. But, more than anything else, the failure is the result of the refusal of the Democratic Party - committed to neoliberalism for decades and headed by politicians on the take from plutocrats like their Republican colleagues - to fight back against ruling class resistance to reform with anything resembling a class-based politics.
This refusal explains their willingness to take as good coin Manchin’s patently hypocritical objections to BBB because it involved excess government spending, when it was designed to be ‘budget-neutral’ by covering its expenditures with new taxes on corporations or the rich, and after Manchin had voted for the biggest military budget in the country’s history. It explains the assertions of leading House progressive caucus member, Ro Khanna of California, that what stood between him and Manchin was a “philosophical difference” rather than the fact that Manchin’s top 10 donors were among the biggest oil and gas firms, and that Manchin himself is the owner of a coal company.
It is why no Democratic politician rushed to publicise Manchin’s ludicrous assertion - in response to a television interviewer, who put his top 10 campaign contributors up on the screen - that he does not know who his donors are; or his claim that his investments are in a non-remunerative blind trust, when the $492,000 he received in interest and dividends from his coal company in 2020 alone, not to mention the $5 million he has pocketed over the last five years, are a matter of public record. Fear of exposing their own venality is also the reason why Democrats failed to draw public attention to the rush of corporate and wealthy contributors - many of whom have always been Republicans, and were giving to Democrats for the first time - to fill the campaign coffers of Manchin and Sinema. With enemies like these, the oligarchs don’t need friends.
And if, as I wrote in my previous article, the fate of Build Back Better can be viewed as a test of the ability of contemporary American capitalism to renew itself through reform, it is a test the system has failed with flying colours this time around.
For the particular contents of each bill, see my earlier article, ‘A political system test’ (Weekly Worker September 28 2021): weeklyworker.co.uk/worker/1364/a-political-system-test.↩︎