Biden’s budget reveals his contempt for working Americans
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Like the budget of an individual or a household, the budget of a government or a political party reflects its values and priorities.
The proposed federal budget of the Biden administration is not likely to be implemented in full, given the opposition of the Republican majority in the House, even if all Democrats in Congress supported it. But the budget blueprint is useful nonetheless, for what it says about the groups that are influential in the Democratic party – and the potential divisions within it.
Like Labour in the UK and various social democratic parties in Europe, America’s Democrats have morphed in recent decades from an alliance of factory workers and farmers into an alliance between mostly-white, college-educated professionals and members of nonwhite ethnic groups, both native and immigrant.
In the cities in which Democrats are concentrated, low wages and the high cost of living have driven out many working-class Americans to cheaper peripheral areas or other states. What remains in Democratic downtowns is a three-tier society, with a tiny number of the super-rich at the top, a large minority of college-educated professionals and managers in the middle, and a group of low-paid, often welfare-dependent household servants and service sector workers at the bottom, a group constantly expanded by unskilled immigration.
Once you understand the class dynamics in Democratic electoral heartlands, otherwise puzzling features of the Biden budget can be explained. For example, Biden proposes to do more to help Americans obtain student loans. Ever since becoming president, Biden has made student loan relief a priority, boasting that over 3.7 million Americans have had student debt canceled by his administration’s actions.
Only about 13 percent of Americans have student loan debt. That is hardly surprising, in 2022 because fewer than 38 percent of Americans have four-year college degrees, while only 14 per cent have a master’s degree, doctorate, or professional degree. The majority of American adults have no formal education beyond high school, technical school, or some college.
Why not address auto loan debt that working-class people struggle to pay, instead of student loan debt for the relatively privileged economic elite? The answer is that the college-educated are a much higher percentage of the Democratic electorate (48 per cent) than of the American public (38 per cent).
Moreover, women now outnumber men at American universities at both undergraduate and graduate levels. Seventy per cent of single women vote for Democratic candidates, while a majority of married women vote for Republicans. Biden’s student loan program thus rewards a critical Democratic constituency.
But roughly half of American college graduates today have jobs that do not require college degrees. Why do Democrats like Biden want more young Americans to get useless diplomas? Here, too, the answer has to do with politics. University professors and administrators are one of the most Democratic constituencies in American society. In 2023, according to one survey, half of professors identify as liberal, 17 per cent as moderate, and 26 per cent as conservative.
More student loans therefore translate into more money for overwhelmingly-Democratic college faculty and staff, who in turn recycle the federal student loan money their institutions receive in part by donating predominantly to Democratic candidates.
Green energy tax breaks are another subsidy to affluent Democrats. In order to get a variety of “clean energy” tax credits, American tax-payers in 2023 have to itemise their taxes and also fill out IRS Form 5695, “Residential Energy Credits.” Most Americans in the bottom 90 per cent of the income distribution do not itemise; only a majority of the few in the 90th-100th income percentile do.
The people who get federal tax breaks for their expensive all-electric Teslas or their tax-subsidized solar water heaters are among the wealthiest in the United States. Meanwhile, the higher costs of oil and natural gas that result from the left’s campaign to shut down fossil fuel production function as a regressive tax on working-class Americans as well as American industry.
What about child care? While Democrats along with many Republians support some kind of program for short-term paid family leave, most Democrats support only long-term funding for child care outside of the home, in public or commercial day-care centers, with not a penny for stay-at-home mothers or other family caregivers.
The Democratic party’s hostility to homemakers is the result of an alliance of radical feminists, who see “defamilisation” (the liberation of women from child and family care) as the goal, and lobbyists for employers. Organised business in the US has long sought a larger, looser labour market in which child care enables most mothers of young children to work outside of the home for wages. Along with increased immigration, greater entry of mothers into the workforce promises to allow companies to increase output and profits without having to wage raises or invest in expensive labour-saving technology.
In 2020, Biden campaigned for the presidency claiming that nobody making less than $400,000 a year would pay higher federal taxes. In 2021, this was clarified to mean above $400,000 for individuals and above $450,000 for households. Now Biden has repeated his promise that taxes will be raised only on the wealthy, defined as those making more than $400,000 a year.
Here is the weakness in Bidenomics. The program depends on the super-rich subsidising both the college-credentialled professional elite below them and the working poor who work for the professionals. But there is an accelerating exodus of billionaires and businesses from high-tax, high-spending Democrat-dominated states like California and New York to states like Florida and Texas with no state income taxes.
Even wealthy Democratic donors may rebel against paying exclusively for ambitious Democratic spending plans like Biden’s – all to ensure that a corporate lawyer-medical doctor couple who make $350,000 in combined income a year do not have to pay more in taxes themselves. Republicans in Congress are only one obstacle to Biden’s gentry-friendly spending plans, then. The Democratic rich may be another.
