Biden’s Summer of Legislative Love
If all goes well, US President Joe Biden could soon sign major legislation to reinforce America’s technological edge and accelerate its transition to a carbon-neutral economy. Suddenly, the administration’s legislative achievements will have gone from “disappointing” to “exceeding expectations.”
BERKELEY – When it comes to the United States Congress, nothing is ever over until it’s over. But as of late July, it looks as though two major pieces of legislation will soon be on President Joe Biden’s desk, awaiting his signature. The first is the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, which will provide tens of billions of dollars to support domestic semiconductor production and research. The second is the Inflation Reduction Act, a slimmed-down version of the failed Build Back Better Act that nonetheless contains hundreds of billions of dollars to support clean energy and incentivize decarbonization across the economy.
Together, these bills are more than enough to flip the narrative about Biden’s first two years in office. Suddenly, the administration’s legislative achievements have gone from “disappointing” to “exceeding expectations.”
By now, many voters have forgotten about the March 2021 American Rescue Plan, which cemented a strong post-pandemic recovery and prevented a repeat of the long, grinding semi-depression that marked the Obama years. Though many commentators have blamed the American Rescue Plan for today’s higher rate of inflation, the truth is that its contribution to that problem was small. Pandemic-related supply issues and Russia’s war in Ukraine have driven up prices globally. But even more to the point, it is better to have a temporary increase in inflation than another lost decade of tepid growth.