Commentary: Biden needs to build bridges, literally, in the US
Infrastructure spending is an issue that both parties talk about as it is not as partisan as other issues, says Venkat S N.
SINGAPORE: In a deeply divided America, more than 75 million have voted for change with over 70 million voting for the status quo.
This, in a year of a pandemic where the number of COVID-19 deaths is fast approaching a quarter of a million, and the number of COVID cases has exceeded 10 million according to some estimates, coupled with disastrous economic impacts.
The election results have highlighted how challenging it will be for President-elect Joe Biden to govern a deeply divided nation and political system. Despite the highest voter turnout in history, what separated winner from the loser in the presidential election in eight states was a mere margin of 3 per cent or less.
Republicans or Democrats hold about an even number of seats in the Senate. And Georgia is going to hold re-election in January 2021 for two Senate seats as no one secured over 50 per cent of the votes.
In the House, the Democrats’ majority has been reduced as they lost six seats. All these clearly indicate that majority of the Trump and Republican base held strong and could not be persuaded to change their minds.
The question facing the country is how can an incoming President propose domestic policy measures that can be acceptable to both sides and heal the divide?
CHALLENGES BIDEN INHERITS
Five days after the country went to the polls, Biden was at last declared the President-elect along with his running mate Senator Kamala Harris.
At the time of writing, President Donald Trump had not given his concession speech, a long-held tradition for losing candidates in the US presidential elections.
Instead, Trump has continuously questioned the legitimacy of the process, accused the Biden campaign of cheating and has already filed lawsuits in some states to challenge the integrity of process with more likely to follow. So, this drama may go on a little longer.
When the dust settles and assuming Biden takes office in January 2021, he will be facing economic challenges of an even larger scale than those tackled by President Barack Obama and him in 2009.
On top of that he will inherit a pandemic and a healthcare crisis, a deep racial divide, as well as law and order problems, like what the nation saw this year when there were instances of arson and looting in some cities with national guards deployed to maintain peace.
The origins of the economic and social issues that rallied Trump’s base in 2016 - which mostly held strong in 2020 - can be traced back to the Bush and Obama eras.
According to a World Trade Organization report published in 2019, the US spent only around 0.28 per cent of GDP on a combination of labour policies, like unemployment insurance, in 2015 and 2016, directed to bring unemployed workers, who had lost jobs due to globalisation and outsourcing to cheaper locations, back to work through vocational and classroom training.
In contrast, over the same years, Germany spent about 1.5 per cent and Denmark over 3 per cent of GDP on such policies. With inadequate support system, or public-funded retraining, millions of Americans, particularly in the manufacturing sector, have been left worse-off.
In a paper entitled “The Effects of Offshoring on Domestic Workers: A Review of the Literature” in June 2018, the authors, both American trade economists, note that “The number of Americans employed in manufacturing fell from almost 20 million in 1980 to a little over 12 million in 2017.”
They also point out that “the relative wages of non-production workers also increased, from 50 per cent higher than production workers in 1980 to 85 per cent higher in 2011”.
The COVID-19 pandemic also exposed the lack of investment in US healthcare, preparedness, and a necessary swift response for a pandemic of unprecedented scale. All of these are among the many domestic issues facing the incoming administration.
CAN BIDEN REACH ACROSS THE AISLE?
In most countries, a near five million popular vote difference would give a strong mandate for a victor in the elections to govern. But not in the US where a Republican senate can block and frustrate a President to no end, as Biden himself knows from his earlier term in office as Vice President to Obama.
Many have expressed the view that Biden has decades of experience of reaching across the aisle to make compromises and pass stimulus and bills.
When Obama became President in 2009, Biden helped him pass the economic stimulus bill by persuading three Republicans, Arlen Specter, Susan Collins, and Olympia Snowe to vote with the Democrats.
According to Politico, “he also helped persuade his buddy Specter to defect to the Democratic Party, which provided the 60th vote for Obamacare”. They are hopeful that he can work that magic again.
What is to be noted is that in the last decade, many Republican politicians have taken a stand not to yield even an inch to the other side.
For example, they blocked Obama’s nomination of Merrick Garland to the Supreme Court in 2016.
But later that year the Republicans won the Presidency, the House, and the Senate and appointed three conservative judges to the Supreme Court before the 2020 elections.
Consequently, Biden also inherits a Supreme Court that is much more conservative leaning on social issues such as abortion as well as economic issues and healthcare.
BUILDING INFRASTRUCTURE AND BRIDGES
Given that a compromise-based approach that Biden is best known for, will be difficult, is there an alternative?
In their 2017 book, Creating Great Choices: A Leader's Guide to Integrative Thinking; Jennifer Riel and Roger Martin, talk about how people across the political spectrum have become polarised and are not interested in even talking to each other.
They say, “in politics, conservatives tend to see liberals as hopelessly naive, building unaffordable entitlement schemes the country can ill afford. And liberals typically see conservatives as unfeeling and unkind, more interested in money than in people.”
Martin and Riel discuss in detail how integrative thinking can be applied to messy problems where there are opposing approaches from people from opposite ends of the ideological and political spectrum. They point out that the “intention is not to help you choose between these opposing models (approaches) but to help you use the opposing models to create a great, new choice”.
Let us consider the stimulus package that needs to be passed as soon as the Biden administration takes over.
The American Society of Civil Engineers’ (ASCE) has been giving US infrastructure a near failing D+ grade both in 2013 and 2017. Trillions of gallons of drinking water are leaking, and more than 2,000 dams are at high risk of failure, according to the report.
A Reuters news report says that a list of 428 projects that the state Governors would like funded under a public works plan was already available.
Infrastructure spending is an issue that both parties talk about but have not acted upon. It is not as partisan an issue as tax cuts. The Democrats in the House were already willing to include infrastructure in a budget reconciliation package. If there is any time that is good to borrow and spend on long-term projects that invest in the future, with the prevailing low interest rates, now is the best time.
An infrastructure stimulus package can fund state and local construction projects mentioned above, can address maintenance backlogs of dams, and bridges, and can provide jobs to millions of college and non-college educated workers.
A whole host of industries like steel, heavy machinery, transport and logistics, will benefit from increased infrastructure building, further improving the employment prospects for many.
During the pandemic the country has seen the negative impact of an emphasis on reducing healthcare costs, and the resulting lack of investments in sector.
Democrats who want to see an increase in the insured population will have to closely engage with the industries and companies that will stand to gain from this.
These will be the hospitals, health care providers - as against the current managed care providers who like to reduce costs - along with medical equipment and devices manufacturers and distributors.
Democrats will have to get these companies to join them in persuading the populations and the Congressmen to pass a broad-based healthcare plan.
Can people be persuaded on issues that will economically impact them in that divided country?
It is worth keeping in mind that on Nov 3, even Florida - traditionally Republican stronghold - has voted to raise its minimum wage to US$15 an hour. It joined California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York plus Washington DC, all of which are Democrat strongholds.
Undoubtedly, Biden will have a difficult time bridging the political divide in the US, but in infrastructure spending he just may find common ground and a will to move forward.
Venkat S N is an Adjunct Faculty in Singapore Management University. The views expressed here are his own and not of the University.