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“Rejection of the Neoliberal Framework”: Biden Proposes Trillions in New Spending, Taxes on the Rich

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On the eve of his 100th day in office, President Joe Biden gave his first speech to a joint session of Congress and proposed trillions of dollars in new economic measures. He unveiled his $1.8 trillion American Families Plan, which includes $1 trillion in new spending and $800 billion in tax credits aimed at expanding access to education and child care. He also called on lawmakers to support his plan to invest heavily in the country’s infrastructure and to expand the social safety net in part by funding it with $4 trillion in taxes on the rich and corporations. Economist Jayati Ghosh says Biden’s spending plans are “unexpected” but much needed. “It’s very important to turn the direction of the nature of public intervention away from protecting the interests of the rich and of large capital to protecting the interests of people,” Ghosh says. “This has not been the aim of government policy across the world, and especially in the U.S., for the last three decades.” We also speak with Democratic Congressmember Ro Khanna, who said Biden’s speech “was an explicit rejection of the neoliberal framework.”

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: This is Democracy Now!, democracynow.org, The Quarantine Report. I’m Amy Goodman, with Nermeen Shaikh. You can watch, listen and read transcripts using our iOS and Android apps. Download them for free from the Apple App Store or Google Play Store today.

Well, Wednesday night, on the eve of his 100th day in office, President Biden gave his first speech to a joint session of Congress, with attendance restricted to just about 200 — 1,600 people usually fit in — to allow social distancing. Biden opened by noting that for the first time in history, two women sat behind him: House Speaker Nancy Pelosi and Vice President Kamala Harris.

PRESIDENT JOE BIDEN: Madam Speaker, Madam Vice President, no president has ever said those words from this podium. No president has ever said those words. And it’s about time.

AMY GOODMAN: Biden used his address to propose trillions of dollars in new economic proposals and unveiled his $1.8 trillion American Families Plan, which includes $1 trillion in new spending and $800 billion in tax credits aimed at expanding access to education and child care. He also called on lawmakers to support his plan to invest heavily in the country’s infrastructure, to expand the social safety net, in part by funding it with $4 trillion in taxes from the rich and corporations. Biden also condemned systemic racism and called on lawmakers to pass the George Floyd Justice in Policing Act of 2020. On the foreign policy front, he vowed to end what he called the “forever war in Afghanistan” and referenced China four times.

For more, we’re joined by Ro Khanna, Democratic congressmember from California, member of the House Committee on Oversight and Reform and House Armed Services Committee.

Thanks so much for staying with us, Congressmember Khanna. Let’s talk about his proposal on taxing the rich. And explain the significance of it, how popular it is in this country — except for the U.S. Senate.

REP. RO KHANNA: I thought the president gave a very powerful and consequential speech. We’ve come a long way from when President Clinton said that the era of big government is over. This speech was an explicit rejection of the neoliberal framework that I would say started with Reagan and Thatcher. And President Biden made the case that you need an active role of government in investing in people to unleash their potential, not massive deregulation and tax cuts. And he also explicitly made the case that those at the very top are simply not paying what he said is their fair share — in many cases, they’re actually not [inaudible] as they owe — and that we can raise the tax on the very wealthy and collect the taxes from them and corporations, to invest in our working class, to invest in our middle class, to invest in our country. And it was very popular, the speech, and very well delivered.

AMY GOODMAN: Jayati Ghosh is remaining with us. She is a leading economics professor in this country, from University of Massachusetts Amherst. If you can talk about how transformational these proposals are, if they in fact became law, what Biden is presenting here, shocking even progressives?

JAYATI GHOSH: Yes, I think it’s unexpected, and it’s very welcome. It’s very important to turn the direction of the nature of public intervention away from protecting the interests of the rich and of large capital to protecting the interests of people and making the economy work for people. This has not been the aim of government policy across the world, and especially in the U.S., for the last three decades. So, it’s very refreshing to see this shift. It’s not enough, but it’s a very important first step.

And I hope that this will actually have very positive implications for the rest of the world. Already we’ve seen that Janet Yellen’s declaration that the U.S. would support a minimum global tax rate for corporations of 21% has had very significant impact. I am part of a global commission, with Professor Stiglitz and José Antonio Ocampo and others, that is saying that we must have a minimum tax rate for corporations and to ensure that we tax them as one single unit globally, which is how they make their profits, so that we don’t have this massive shift of profits into low-tax jurisdictions so that people everywhere in the world lose out.

NERMEEN SHAIKH: Congressman Khanna, you’ve said that Biden’s vision will not come into view until we end the filibuster. Could you explain why?

REP. RO KHANNA: Well, the reality is that a lot of the proposals, on immigration, on gun safety, on voting rights, require 60 votes. You can’t do that through reconciliation. And there’s just no way you’re going to get 10 Republicans to vote for some of those things, when they weren’t even willing to vote for basic COVID relief. So we need to get rid of the filibuster. It also, if we don’t have the filibuster, would decrease the leverage of some of the members in our own caucus and allow for the president’s agenda to go forward.

But I agree with Professor Ghosh in the transformative nature of the speech. I mean, it’s sort of like Amartya Sen’s ideas or Professor Ghosh’s, others’ ideas are finally ascended, this idea that you don’t just have government spending on the military — still 53% of our budget — that your investment in education and healthcare is actually freedom-enhancing, that it’s actually what you need for people to have true freedom in a society, and it’s good for economic growth. And so, when you look at the philosophical framework that Biden is adopting, that is a dramatic shift in the right direction for our country and the world.

NERMEEN SHAIKH: Professor Ghosh, could you talk about — you mentioned that Biden’s proposals would have a positive impact globally. Could you say a little more about why you think that is?

JAYATI GHOSH: I think the tax proposal for minimum corporate tax globally is very important and will have a very positive impact. The other aspects, unfortunately, I don’t think would necessarily have a positive impact. Certainly, the U.S. economy growing will help all other economies grow. But it’s very important for other countries to have the options for public spending that are so easily available to the United States.

And for that, you really need the United States to be actively participating in global architecture changes, which, again, Professor Stiglitz and others have called for. We need to ensure that there is, for example, a very large issue of special drawing rights by the IMF, that will make more finances available to developing countries. You have to do something about a whole lot of sovereign debt that is simply unpayable. You have to restructure it, so that many developing countries who are massive debt burdens, not for their own fault, can really now get on with not spending all this money on debt service, but spend it on health and on people, on employment, on education.

So, I think that the U.S. still has a very important global role to play. And I recognize the importance to do things for Americans. But it’s very important, in the U.S. interest, to make sure that the kinds of strategies that he’s tying to implement in the U.S. are also available to people in the developing world and to governments elsewhere.

AMY GOODMAN: Congressmember Khanna, are you concerned — I mean, on the one hand, you have President Biden forcefully talking about ending the “forever war” in Afghanistan; you’ve called for a slashing of the Pentagon budget; he’s calling for an increase of the budget — that he’s just shifting the possible military might, setting up a kind of Cold War situation with China and Russia? He talked about China a number of times in his speech last night. Can you talk about how you redirect that, and also about, you know, his taking on white supremacists, calling them, very directly, terrorists at home?

REP. RO KHANNA: Well, I was disappointed in the president’s defense budget. I mean, the defense budget is still 53% of the federal budget. And I think that that is a overprioritization of defense over the investments that we need in education, in healthcare, in infrastructure, and makes it more difficult to fully achieve the vision that he is talking about.

And on China, we need to make sure that we are competitive. I agree with him that, ultimately, we have to show that liberal democracy is a superior model for the world. And we want to be leading in clean tech, in AI, in synthetic biology, in jobs of the future. But that doesn’t mean that we have to replicate a Cold War, that we should be engaged in xenophobia or fear of Chinese immigrants. In fact, the reason we’re having this conversation on Zoom is because of a Chinese immigrant, who was denied entry into the United States seven times and was able to come on his eighth try and then founded Zoom.

And so, I rather those individuals be in the United States. We win when we have collective advances on science. If he wants to solve cancer, we have a better chance of doing that if it’s not just American scientists, but scientists around the world. So, there have to be, on areas of disease, on climate change, international cooperation. We ought not to replicate the paradigms of the 20th century with colonialism and cold wars into a 21st century. So, let’s compete without making that Cold War framework.

AMY GOODMAN: And very quickly, Congressmember Khanna, why won’t the Democratic leadership move in the Senate on the filibuster? It’s clear this all cannot happen without that gone, that upheld slavery, that upheld Jim Crow laws.

REP. RO KHANNA: Well, I think what you see is, we have — the Democratic leadership, the Democratic Party, has accepted the bold progressive vision in terms of ideas. But now there has to be an equally important second step, complementary step, and that is, there has to be bold institutional reform. Reform about ideas and a bold vision is necessary, but insufficient if it doesn’t come with institutional reform. And a filibuster, ending that is one key component, as is voting rights, as is campaign finance reform, as is ending gerrymandering. Unless we have institutional reform, you’re going to continue to see a frustration with politics, where policies at 70, 80% approval, which even the president is supporting, the majority leader is supporting, the speaker of the House is supporting, and yet are not getting enacted. So, we have to make the case that institutional reform is tied to the substantive vision.

AMY GOODMAN: Democratic Congressmember Ro Khanna of California, thanks so much for being with us. And, economics professor Jayati Ghosh of the University of Massachusetts Amherst, thanks so much.

JAYATI GHOSH: Thank you.

AMY GOODMAN: And that does it for our show. A very happy third birthday to Jahan, our dear producer Deena Guzder’s son.

And tune in this Saturday at 1:30 p.m. Eastern time to a live stream of my panel on whistleblowers with Edward Snowden and Daniel Ellsberg, as we move into the 50th anniversary of Ellsberg’s release of the Pentagon Papers. For more information for that event, as we span the world, from Russia to California, you can go to democracynow.org.

That does it for our show. Democracy Now! produced with Renée Feltz, Mike Burke, Deena Guzder, Nermeen Shaikh, María Taracena, Carla Wills, Tami Woronoff, Charina Nadura, Sam Alcoff, Tey-Marie Astudillo, John Hamilton, Robby Karran, Hany Massoud. I’m Amy Goodman, with Nermeen Shaikh.

The original content of this program is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License. Please attribute legal copies of this work to democracynow.org. Some of the work(s) that this program incorporates, however, may be separately licensed. For further information or additional permissions, contact us.

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