(CNN)“Transformational”? Don’t get carried away.
That superlative descriptor has attached itself to President Joe Biden’s economic agenda as firmly as “polarized” sticks to political parties or “gridlocked” to Congress. And the combined $4 trillion price tag for his American Jobs Plan and Families Plan is only one of the reasons.
“Transformational” thrills Democratic liberals as much as it alarms Republican conservatives, so both ends of the ideological spectrum embrace the term. It sounds right to many commentators since the new President’s proposals to build infrastructure, expand education and help struggling families buck the tide of the only political era they’ve known.
But a longer view of the relationship between Americans and their government suggests a subtler reality.
Bracing as the size and scope of the new President’s program is, much of it would build on federal initiatives that have evolved over decades. It would return spending and tax levels that existed as young Joe Biden came of age in the mid-20th century, before the rise of conservatism bent on constraining government.
“Biden has the opportunity to be a restorational president,” said Douglas Brinkley, a Rice University presidential historian. At 78, he “is trying to restore the America that was his America until the Reagan Revolution became dominant.”
Government’s role in economic life has grown with the nation throughout American history. Canals, railroads and land-grant colleges in the 19th century gave way to electrification, interstate highways and social insurance in the 20th. A progressive era constitutional amendment paved the way for federal income taxes on individuals as well as corporations.
As Washington financed President Dwight Eisenhower’s highway system, John F. Kennedy’s moon mission, and Lyndon Johnson’s Great Society, federal investment in infrastructure, research and development and education peaked at 6.4% of the size of America’s economy in the 1960s. It declined thereafter, to 2.6% by 2019.
Had it remained at 6.4% that year, federal investment would have been $800 billion higher. That’s twice the $400 billion annual cost of Biden’s agenda spread over 10 years.
Biden’s tax proposals appear modest in the context of recent history. The 1981 tax cut Ronald Reagan signed cut the
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