Michael Doyle

Michael Doyle

Biden is Governing for Capital

Reading Time: 5 minutes

Far from being influenced by the left Joe Biden has proved he rules for capital alone, argues Michael Doyle.

In recent months prominent commentators on the UK left have given credit to Joe Biden for breaking with forty years of neoliberalism. Their analysis is based on Biden’s stimulus and infrastructure bills and a proposal to improve trade union rights. According to some analysis, Biden has been forced to concede because of pressure from the American left. However, I would argue that this is not a substantial break from neoliberalism, nor has Biden’s agenda been a result of left pressure. Instead, in different ways, Biden is taking the path of Barack Obama in responding to a crisis of capitalism. He is implementing measures differentiating his party from the Republicans whilst maintaining the fundamentals of an economic system that exploits American workers.  

The incoming Biden administration promised to send out $2000 stimulus cheques, yet only delivered $1400. Just like in the 2009 stimulus bill signed by Obama, the measures that support the poorest Americans are temporary. The extension and uprating of unemployment benefits in the Obama bill lasted a year, in the Biden bill, the extension lasts six months. This creates unnecessary cliff-edges that harm the most vulnerable Americans. Likewise with the temporary assistance for needy families (TANF) and women, infants and children (WIC) programs. Just like Obama, Biden has passed a bill that makes assistance to the most vulnerable children temporary. Tax credits and various other tax incentives – the favoured measures of neoliberal politicians committed to merely tinkering with the current system – are temporary and non-binding on employers. Just as Biden promised his corporate donors, “nothing would fundamentally change”. Biden has spent more money than Obama, but the measures are not about fundamentally changing the US economy and society for the better. Rather it is about papering over the cracks created by a crisis of capitalism.  It is not a fundamental break with neoliberalism for governments to stimulate the economy during a recession.  

Prominent UK commentators on the left have waxed lyrical about Biden’s proposed increases in corporation tax that will fund the Infrastructure and Jobs Bill. Biden proposes to raise the rate of corporation tax from 21% to 28%, 7% lower than the rate under Obama.  However, Biden is not the first Democrat president in the neoliberal era to raise taxes on wealthy individuals or big businesses. In Clinton’s 1993 budget, he raised income tax on the wealthy. Obama let the Bush tax cuts expire on individuals earning above $250,000, raising the top rate from 35% to 39%. However, what Democrats take from the wealthy with one hand, they give back with the other. Whilst Clinton raised the income tax rates on rich individuals; he dramatically cut the capital gains tax. Obama’s tax rise did not stop the wealthiest Americans’ incomes from growing by 37% between 2009 to 2015. Simply put, tax rises on the wealthy implemented by Democrat presidents have made little to no difference in inequality between the rich and the majority.  

A common refrain from prominent UK left commentators is that Biden has co-opted parts of Bernie Sanders’ agenda, with this being evidence that the left has won significant concessions from Biden.  Sanders’ pledge to provide universal healthcare, forgive all student debt and a $15 minimum wage were popular policies and would have marked a significant divergence from the neoliberal political economy, yet Biden has not sought to introduce those policies. Universal healthcare was never countenanced by Biden, who said he would veto any such bill that came to his desk. In the stimulus bill, Biden introduced subsidies and incentives for the private health insurance health companies and expanded Obamacare: measures that benefit the health insurance companies and not working-class Americans. Biden has pledged to write off 1% of student debt, an infinitesimally small amount that is only applicable to students who have been defrauded by their schools. Moreover, it is not the first reform made to student debt. Obama introduced an equally feeble student loan forgiveness program that keeps student debt ‘manageable’ and then forgives the remaining balance if certain requirements are met. The Biden policy is just the latest half-baked measure that leaves a broken student debt system in place. Predictably, this  already paltry commitment to easing the burden of student debt failed to appear in his budget.

The federal minimum wage has not been increased from $7.50 since 2009. The proposed $15 minimum wage was not going to be fully introduced until 2025, by which point its purchasing power would have been eroded by inflation. Yet even this was too much for the Biden administration. They accepted the unelected Senate Parliamentarian advisory ruling that a minimum wage increase could not be included in the stimulus bill using the budget reconciliation process. When George W.Bush had his tax cuts rejected by Robert Dove, then Senate Parliamentarian in 2001, he simply had him replaced by someone more willing to defy convention. No such move was countenanced by Biden, an ardent constitutional conservative who has diluted much of his agenda in the hope he can get Republican support.  

Workers rely on their wages as a means of subsistence and surviving in capitalist societies. They are locked into an asymmetrical power relationship with their employers who exploit them. The left should not look at Biden’s overall package and say it has ‘exceeded their expectations’ when such a fundamental demand has not even been considered. Rather, it should demand a real living wage that ensures that workers are never facing insecurity. Those demands have to be articulated by the labour movement, although it would be wrong to think Biden’s proposed extension of trade union rights will assist in that task.  

During his presidential campaign, Biden repeatedly proclaimed that he is a ‘union guy’ and would be  the ‘strongest labor president ever’. Biden’s proposals include a weakening of the right-to-work law, allowing the National Labour Relations Board to fine employers up to $50,000 for every violation of labor law, to reclassify gig workers as employees and encourage secondary strike action.  These are quite tepid measures that will barely dent the power of US capital.  Moreover, when one looks at Biden’s record in office, one should note that when it has come to prioritising the rights of US workers against their employers, Biden has always sided with the former. Consider the card-checking system which allows employees to organise into a union where most of them sign cards stating they wish to be represented in this way.  In the past, Biden has opposed a card-checking system. With centrist Democratic senator Joe Manchin co-sponsoring the proposed bill so it has bipartisan support, it will be an empty gesture from Biden. Furthermore, the Senate is a formidable barrier to the bill reaching Biden’s desk. The clearest way to surmount this barrier is to eliminate the filibuster. However, Biden is far more committed to the arcane rules of the Senate than he is to the cause of organised labor.  

The Infrastructure and Jobs Bill is a $2.25 trillion package that focuses on transportation, social care, housing and manufacturing. The headline figure is deceptive. The $2.25 trillion is spread over eight to ten years, which amounts to less than the annual Pentagon budget. The plan is being drafted by two of the most right-wing members of Biden’s White House staff: National Economic Council Director Brian Deese, a former Wall Street banker and the Domestic Policy Council Director Susan Rice, Obama’s former UN ambassador. White House officials have stressed that Congress can make amendments to the bill meaning that by the time it reaches Biden’s desk, it will be a typical centrist infrastructure bill.  

The language being used by the Biden administration to sell the bill is loaded with anti-Chinese sentiment, framing the bill as a necessary measure to outcompete the Chinese economy.  Rahm Emanuel, the former mayor of Chicago and Obama’s first chief of staff put it most starkly,”If you vote no, you are with China. If you vote yes, you are America”. Such pugnacious language has been complimented  by action in foreign policy. 

In the wake of the failed Bernie Sanders’ presidential campaign and the UK General Election defeat in 2019, some figures on the UK left have advocated a transactional relationship with centrists in both the UK Labour Party and the US Democrats. The argument goes that Biden has co-opted the left into his coalition and that he has adopted Sanders’ policies, albeit in a watered-down form. Yet as documented above, Biden’s policy prospectus is not a break from conventional neoliberal management of a crisis of capitalism. The monetary increase in Biden’s stimulus package does not reflect a generosity forced upon him by the left. Asymmetrical transactional relationships will not benefit the left, nor will they benefit working-class Americans. Only a robust class politics that seeks to change the fundamentals of the capitalist system will succeed.

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