America's $3.5 Trillion Social Program Bill what is at stake?

Updated: Aug 31, 2021

In 2020, candidate Joe Biden campaigned on the basis of five key pointers. This included rewarding work and not the wealthy, vaccination to end COVID-19, economic recovery plan for working families, inclusion and support for minorities, and a move towards clean energy/environmental responsibility.

Trump took a completely different pathway on all these key issues with ideological positions that supported production and supply-side ideas meant to help Americans through high employment and tax breaks to promote businesses.

President Biden is now facing one of the greatest challenges of his presidential term by seeking a spending bill that would cover numerous social programs he promised during campaigning. This has culminated in a proposal for a $3.5 trillion budget to cover childcare, education, healthcare, and climate preservation measures.

If this proposal is approved by Congress, Biden and the Democrats will have a strong footing among voters, and this will make his administration popular in elections that would follow. It therefore comes as no surprise that the Republicans are moving to challenge this position taken by the Biden Administration.

Image Source: Reuters

Mobilization of the Liberals by Nancy Pelosi

Democrats are not all out and willing to pass this mega budget for Biden’s social programs. Some Democrats feel the $3.5 trillion social program will make the party unpopular and give the Republicans grounds to blame them during elections.

On the other hand, the Liberal bloc of the Democratic Party support the bill and hope to see it pass in both houses of Congress. Nancy Pelosi conceptualizes it as “legislating” to protect the best interests of working-class Americans. She therefore seeks to pass that as the first major provision to help Biden achieve his goal of delivering on his promises to the American people.

Classical Republican opposition to Big Government Spending

In elections coming up in the coming years, the Republicans stand a chance to build a narrative around big government spending and promotion of inefficiency. This is a major tool that the Republicans have used in elections for decades.

Hence, the real risk is the possibility of the Republicans uniting under the umbrella of public sector waste and Biden’s movement towards welfare-oriented policies. This starts by opposing the bill in the senate and building a strategic political communication plan around the narrative of “big spending”.

Bipartisan consensus on the $1 trillion Infrastructure Bill

Republicans and Democrats tend to have a consensus in passing the mega infrastructure bill. Obviously, Republicans have something to gain from such a budget and this seem to be gaining political momentum in both houses.

Pelosi and the Liberals’ Request to pass the Social Program Bill before Infrastructure Bill

The Liberals on the other hand believe they can gain leverage by getting other members of Congress to pass the $3.5 trillion social budget at this time that there is a unifying factor – the Infrastructure Bill.

Nancy Pelosi has hammered home the need to pass the social program bill before the infrastructure bill. This, in her view, will give the Democrats an upper hand since the Infrastructure Bill unifies all sides.

Conversely, passing the Infrastructure Bill first, could cause the Republicans to back out of any commitment to build a bipartisan consensus for a vote on the social program bill.

Likely Outcomes

There is a likelihood that the Social Programs legislation will be passed and it would be significant. However, there is a major possibility that the amount would be revised downward due to the split among the Democrats and the Republicans’ almost universal disdain. This makes the issue a very important strategic one that needs to be observed closely.

Emerging Strategic Pointers

There are several implications for different strategic decisions and choices:

1. Increased Taxes: A huge social program budget will have to be funded by corporate entities and the wealthy.

2. Business Cuts: There will be the need for businesses to reduce their working capital and make other cuts to survive.

3. Unemployment: There is a major likelihood that production will fall as companies would have to make various cuts to survive. This will reflect in an increase in unemployment.

4. Further Spike in Social Program Budget: There will be an increment in social program budgets as the social welfare claims would rise with the passing of a mega social program bill.

5. Possibility of a fall in the value of the US Dollar: A weak economy will cause a weak dollar.

Glen Grid

14 views0 comments