The Biden team wants to transform the economy. Really.
DeFazio is one of a small handful of lawmakers who will have a disproportionate influence on what Biden is able to accomplish economically. To call him a supporter of far-reaching economic legislation would be an understatement. He was one of the few members of Congress who voted against Obama’s stimulus package because he found him too timid, and last year he helped pass a 1, $ 5 trillion in the House including significant sums of money for rail, high speed internet, zero emissions. bus and charging stations. (It was not passed by the Senate.) As high as that price was, he was not opposed to the increase. When I pointed out that Biden’s campaign proposal seemed to call for spending more on equipment like electric vehicles, he quickly proclaimed himself open to the amount. But powerful allies invariably have their own priorities, and DeFazio is no exception. He told me about the new bridges and tunnels and told me about the benefits of pedestrian streets. Then he added this pitch: for less than $ 10 billion, the US Postal Service could convert its delivery vehicles into a fully electric fleet. âThe fleet is decrepit, dirty, falling apart,â he said. “He’s over 30 years old.”
With the Democrats in control of Congress, the problem for Biden may not be so much to push through one version of his economic agenda as it is to sort out the volume of demands that are suddenly pouring in from hundreds of members and industry groups. Representative Ro Khanna of California, for his part, introduced a bill that would spend $ 100 billion over five years to fund research in sectors such as quantum computing, robotics and biotechnology and to locate the poles. technological developments in areas hard hit by deindustrialisation. Most of the “20 best universities in the world are American – places like the University of Wisconsin, the University of Michigan, which are scattered across the country,” says Khanna, who represents parts of Silicon Valley and was co-chair by Bernie Sanders. presidential campaign. “There’s no reason we can’t see next-gen innovation and technology in these communities.”
Wind turbine manufacturers, whose supply chain runs through Europe, Asia and Canada, are seeking tax breaks for domestic production. The same goes for the solar industry, which currently imports most of its assembled panels from Malaysia and Vietnam. The semiconductor industry has lobbied for tens of billions of dollars to modernize its production facilities and build new ones, arguing that semiconductors are a fundamental technology – much like mechanically engineered stem cells that power everything from 5G mobile networks to autonomous vehicles and the internet. things. John Neuffer, chief executive of the Semiconductor Industry Association, said supply shortages during the pandemic have focused minds in Washington on the importance of domestic production.
Many of these proposals – and dozens more, like money to make medical equipment, to buy electric scooters and other âmicromobilityâ vehicles, to build âsmartâ pavements that can digitally connect cars roads – have made appearances in Biden’s campaign, and the administration has expressed interest in pursuing them.
Deese, who oversaw Biden’s economic plans, told me the priority for industrial support would be areas where grants can encourage companies to spend money on factories and technology in the short term that ‘they would otherwise not be able to spend for years – âpushing forwardâ their investments, as he puts it.
According to Rodrik, the Harvard pro-industrial policy economist, the practice should really be seen as a way to ensure that American companies continue to innovate, more than as a way to significantly increase employment. But Deese argues that the transition to a cleaner economy – installing solar panels, plugging abandoned oil wells, renovating buildings to make them more efficient – will generate many new jobs, even if manufacturing equipment does not produce. as much as you want. And he adds that the job creation potential of the new equipment should not be underestimated either.
As a rough model, he cites a Senate bill, based in part on the UAW’s paper on electric vehicles, that would spend some $ 400 billion over a decade on cash back for consumers who buy electric vehicles. electric or hybrid cars assembled in the United States. The bill, proposed by Senators Chuck Schumer of New York and Debbie Stabenow of Michigan, would also spend nearly $ 50 billion to fund the construction of charging stations nationwide and provide nearly $ 20 billion of grants to help manufacturers build new factories and modernize existing factories. âThat’s the basic theory of the case,â Deese says. “Significant incentives for consumers associated with retooling factories and building infrastructure.” The deal for manufacturers would become even more compelling with regulations imposing reductions in vehicle emissions and a government commitment to purchase clean energy and clean equipment – a process Biden started with an executive order he signed. at the end of January.