The problem with ‘Bidenomics’? It didn’t go far enough.
New census data shows how "Bidenomics" was helping America's working class and poor — until a key anti-poverty program was killed.
It took 57 long, up-and-down years — far longer than the Cold War — for America to seemingly win the war on poverty.
It took just one year after that to lose it.
The only thing that’s more shocking than the 2022 economic statistics released this week by the U.S. Census Bureau showing that the rate of child poverty in America more than doubled in just one year — from 5.2% to 12.4% — is the immoral political cowardice on Capitol Hill that made this happen.
At the center of this anti-poverty fiasco is a program called the expanded child tax credit, a short-lived federal program birthed in the depths of the pandemic that aided struggling middle-class and lower-income families by sending them a check every month — as much as $300 for each child in the household. For six months after the program’s inclusion in the American Rescue Plan Act of 2021, families said the extra cash helped them avoid choosing between buying school supplies or diapers, helped with emergencies like car repairs or a heat shutoff, or just made shopping for dinner less stressful.
“I received $500 and every month I figured out what the household needed, whether it was gas, school supplies, toiletries, rent, or the electric bill — whatever,” Savanah Brooks, a 36-year-old Milwaukee mom, told NBC News in early 2022. “It gave us just a little cushion and made life a little easier.”
The U.S. child poverty rate was cut in half in 2021. For the richest nation on the planet, which spends more on its military than the next nine countries combined, it was a stunning reversal that meant millions of kids who’d suffered from food insecurity now went to bed on a full stomach. At the end of 2021, making the expanded child tax credit permanent, or at least extending the experiment, seemed a no-brainer — a dangerous term to use inside the Beltway.
The failure of Congress, and specifically the Senate — 50 Republicans, joined by Democrat Joe Manchin — appears to be the main reason so many of these families were thrown back into economic misery last year. The poverty rate for all Americans spiked in 2022, from 7.8% to 12.4%.
It was a gobsmacking retreat. For America’s anti-poverty advocates, it was the equivalent of watching Americans storm Omaha Beach in 1944, capture Normandy, and then go back to their boats to sail back to England. Lyndon B. Johnson — who, as the 36th president, declared an “unconditional war” on poverty on Jan. 8, 1964, and said this would “not be a short or easy struggle, no single weapon or strategy will suffice, but we shall not rest until that war is won” — must be spinning in his grave.
But there is also a much bigger point here about “Bidenomics” — our current president’s economic program that aims to show that after 40 years of a mostly conservative, free-market agenda, the government can help rebuild a reeling middle-class — and the political reality that policy interventions inevitably help some groups more than others.
» READ MORE: Joe Manchin beats his chest for D.C. elites while struggling W. Va. waits for help | Will Bunch
The expanded child tax credit was the most dramatic example of government action that addressed one of America’s biggest problems of the 21st century — spiraling income inequality — but not the only one. The census numbers and other economic data show that the policies Biden successfully enacted early in his administration — a large pandemic-aid package, a student loan payment freeze, a temporary food stamps boost — helped substantially narrow the U.S. income gap. That was compounded by a jobs boom that often was accompanied by pay raises for essential workers at the bottom of the economic pyramid who were traditionally shut out.
An analysis of the new Census Bureau economic data by New York Times reporter Lydia DePillis found that — bucking what has been the trend for decades — workers who didn’t finish high school showed the highest rate of income gains in 2022. Looking at the data’s racial breakouts, DePillis pointed out that white workers lost ground last year compared with other racial and ethnic groups. Overall, she noted, the numbers showed income inequality falling for the first time since 2007.
This may help explain the great conundrum that has consumed the news media in recent weeks: how the overall U.S. economic numbers, especially around unemployment and the gross national product, can look so good while the public mood over the economy appears to be so bad. For example, a Quinnipiac University poll last month found a whopping 71% of Americans described the economy as not so good or poor, and 51% said it’s getting worse. Yet a majority of the same folks (60%) said that personally, their finances are good.
But news coverage — and, to a lesser extent, a lot of polling — tends to overrepresent more affluent people, and also more white people. In other words, not the groups that are making the biggest gains, according to the Census Bureau. It’s not surprising that the folks who didn’t get a big raise in 2021-2022 but paid higher prices at the supermarket or the gas pump because of a spike in inflation are the ones complaining. In Washington, economic policy is always a fight over resources, and since 1980 that battle has almost always been won by the wealthy. Until “Bidenomics.”
No wonder there was such a backlash just one year into the Biden administration. The mostly Republican opposition to extending the pandemic-related social welfare programs, and especially the enhanced child tax credit, was often centered on fighting inflation.
Most economists say more money in the pockets of struggling families did marginally contribute to inflation — that’s ECON 101 stuff — but was clearly not the biggest factor. They note that pandemic-related issues like a shaky supply chain and the gas-price surge triggered by the war in Ukraine were more critical in driving up prices, as evidenced by high rates of inflation in Europe and elsewhere. But was inflation the real reason for undoing victory in the war on poverty? Or was the reason our overreliance on tired, discredited tropes about lower-income Americans?
While there are clearly many to blame for the death of the expanded child tax credit, the number one culprit was West Virginia’s Sen. Manchin, considered the swing vote on Capitol Hill when the Senate was split 50-50 at the end of 2021. And Manchin’s main stated reason for not wanting to extend the program? Not data, but what some folks back home were telling him: that people were using the government checks to buy drugs. As the clock ticked down on negotiations, NBC News cited three sources who said Manchin’s worry was narcotics abuse.
There’s zero evidence for Manchin’s supposed claim. To the contrary, every recent study of both the enhanced federal benefits or several locally based pilot programs in which families were given cash payments to help with daily expenses has shown the money was overwhelmingly used for its intended purpose and not vice.
In 2019, a pilot program around cash assistance in Stockton, Calif., selected 125 families to receive $500 a month. One of the positive findings was that — contrary to popular opinion about social programs — the rate of people in the pilot program who had jobs actually increased from 28% to 40%. That’s because the extra money allowed folks to do things — fix their car, find childcare, etc. — that had been making it hard to get to work.
Manchin and his friends on the Republican side of the aisle — fighting to benefit the old social orders of white supremacy and gross income inequality — don’t want you to think about this.
The new poverty numbers have exposed the actual problem with “Bidenomics”: that it was never allowed to go far enough because of a status quo cabal in Washington. Meanwhile, turn on your TV and you’ll probably see a suburbanite ranting about the price of bacon, not the city child who only had bread for dinner.
Meanwhile, the same Republicans and friends who blew the war on poverty — now said to be concerned about losing votes over their war on women’s reproductive rights — are apparently rebranding themselves as “pro-baby.” How do they live with themselves?
» READ MORE: SIGN UP: The Will Bunch Newsletter