Biden's infrastructure plans are a huge rebuke to Reaganite economic policy, but about a dozen Democrats aren't ready to let go

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Biden's infrastructure plans are a huge rebuke to Reaganite economic policy, but about a dozen Democrats aren't ready to let go
President Joe Biden; Sen. Joe Manchin Nina Riggio/San Francisco Chronicle via Getty Images; Tom Williams/CQ-Roll Call, Inc via Getty Images
  • Democrats wants to shrug off Reagonomics, which slashed social safety nets and taxes on the wealthy.
  • President Joe Biden's massive infrastructure proposals would do just that.
  • But some moderates are holding out and holding up the passage of the full agenda.

Democrats have endured 40 years of living under Ronald Reagan's legacy, and they're itching to replace it with something else.

The last time they had unified control of the White House and Congress, they expended all of Barack Obama's political capital to make the longstanding goal of universal healthcare a reality. Now, they want to transform the American economy under Joe Biden.

The problem is that about a dozen moderates just don't seem ready to let go of Reaganomics.

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California progressive Ro Khanna told the Financial Times that a "couple of holdouts" were imperiling what he called "the biggest public social investment since the Great Society, in a clear rejection of the neoliberalism of the Reagan and Thatcher years."

Khanna was referring to Thursday's vote on a bipartisan proposal getting pulled as progressives revolted over moderates' reluctance to press ahead with Biden's full agenda.

Biden explained his agenda in an April address to a joint session of Congress: "Trickle-down economics has never worked, and it's time to grow the economy from the bottom and the middle out." In a town hall three months later, Biden said, "I'm tired of trickle-down" and that it was time to move on.

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The data supports Biden's argument: One study examining 50 years of tax cuts found slashing rates on the wealthy mostly benefits the rich, and can lead to higher inequality.

Two bills to make that economic agenda a reality are currently being negotiated in Congress. The Bipartisan Infrastructure Framework, or "BIF," is a pared down, $1.2 trillion package that focuses on spending on things like roads and highways. As the name implies, this plan has been partially crafted by Republicans, who voted for it to pass the Senate. The other proposal is a $3.5 trillion party-line reconciliation package that covers everything from universal pre-K to climate funding. That's the Human Infrastructure Plan, or "HIP."

For months, progressives have said that the two proposals must move together - a sentiment that was echoed by House Speaker Nancy Pelosi and President Joe Biden. Progressives warned that they would torpedo any standalone bipartisan bill, since it doesn't allocate funding towards major progressive priorities.

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But, as it became more clear that key moderates like Sen. Joe Manchin weren't on board with the size of the reconciliation proposal, Pelosi took a gamble and pushed for a vote on BIF. As warned, progressives pushed back. Now, Democrats are in disarray - and many are fed up with key moderates - as they try to carve a path forward.

There's a huge split between centrists and progressives

Biden's economic rebuke to Reaganite trickle-down ideology, which would come in the form of trillions in infrastructure spending and tax hikes aimed at the highest-earning Americans, may still be torpedoed by moderates asking for a price cut.

For instance, there's Manchin, who told reporters this week "I've never been a liberal in any way, shape or form." And Sen. Kyrsten Sinema, who's attracted anger from Democrats in her home state of Arizona, has said she won't support a bill that costs $3.5 trillion.

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Manchin agrees. "What I have made clear to the President and Democratic leaders is that spending trillions more on new and expanded government programs, when we can't even pay for the essential social programs, like Social Security and Medicare, is the definition of fiscal insanity," Manchin said in a statement this week.

As USA Today reports, Rep. Josh Gottheimer has emerged at the helm of House moderates, and has insisted that the House should vote on just the bipartisan bill now. He told PBS that "we have got to get both done," but added, "you can't hold one up, this infrastructure bill, while you're working on the other one."

But progressives like Ilhan Omar are pushing back on the centrist revolt.

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It all signals a brewing larger battle between the more progressive and moderate factions of the Democratic party. Right now, the standoff echoes game's theory classic prisoner's dilemma - which, Insider's Andy Kiersz and Joseph Zeballos-Roig report, supports progressives' current pushback.

As key moderate Manchin told reporters this week on the warring factions: "I don't fault any of them who believe that they're much more progressive and much more liberal. God bless them. And all they need to do, we have to elect more, I guess, for them to get theirs - elect more liberals."

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