United States: Raising the stakes by $6 trillion



Daniel Strieff | Chatham House

Joe Biden has framed his $6 trillion-plus ‘Build Back Better’ agenda as intended to speed up America’s recovery from the Covid pandemic, rebuild infrastructure, address climate change and invest in children and families. It’s about ‘jobs, jobs, jobs’ – a word he repeated 46 times in a congressional address.

But Biden’s ambitions for renewal at home could never be a purely domestic project. In his pursuit of a ‘foreign policy for the middle class’, he has melded economic policy with national security. Jobs and infrastructure at home are nice on their own, but using them for advantage in the global superpower competition is even nicer. Biden is committed to strengthening America’s economic base and expanding its industrial capacity to bolster Washington’s position in trade talks with Beijing. 

For all of Donald Trump’s oafish nationalism, he established the notion that America’s greatest international – and often domestic – priority is competing with China. Biden’s approach is softer but no less insistent.

‘We are in a competition with China and other countries to win the 21st century,’ Biden has said. And if the United States doesn’t reform its domestic economy and upgrade its infrastructure soon, he has warned, China is ‘going to eat our lunch’. 

The invocation of China plays on American fears, both real and imagined. The $1 trillion-plus Belt and Road Initiative has exported China’s infrastructure development model to 139 countries. It allows Beijing to argue for its system’s advantages. China’s return to great-power status raises questions about the future of US diplomacy, fiscal policy and security.

Existential crisis

But the possibility that China may usurp America’s place at the top of the imaginary global power rankings threatens a core tenet of national identity. 

‘Every day we are told that we live in the greatest country on Earth,’ David Sedaris, the humorist, noted. ‘And it’s always stated as an undeniable fact: Leos are born between July 23 and August 22, fitted queen-size sheets measure sixty by eighty inches, and America is the greatest country on Earth.’ Threats to that idea get framed in existential terms.

American attitudes toward China are increasingly negative. In March, Gallup found that 45 per cent of Americans perceived China to be the US’s ‘greatest enemy’ – up 23 per cent from 2020. Half of respondents said China was the world’s leading economic power.

This panicked official Washington. ‘If China supplants America and the West, the world our children will inherit will be nothing like the one we grew up in and know,’ Republican Senator Marco Rubio has lamented. ‘And that will have disastrous consequences.’

The sentiment is widespread. Congress is considering a number of bipartisan bills on US-China relations, including legislation that addresses economic competitiveness, human rights and democracy building.

‘Investing in our people’

‘The most effective way for America to out-compete a more assertive and authoritarian China over the long-term is to invest in our people, our economy and our democracy,’ according to Biden’s Interim National Security Strategic Guidance. As Antony Blinken, the secretary of state, said: ‘Our domestic renewal and our strength in the world are completely entwined.’

It is a noteworthy shift. Cold War US national security spending mostly benefited the military, which built, maintained, and deployed conventional and nuclear armaments. This administration sees improved national security stemming from its investments in the domestic economy, infrastructure and emerging technology.

Biden’s agenda is ambitious. It includes $1.9 trillion for Covid relief, $2.3 trillion to be spent on infrastructure and climate and nearly $2 trillion more for education, families and healthcare. Its use of federal spending to address longstanding economic and social challenges has not been seen in five decades.

The infrastructure and climate proposals could make an enduring impact. They are designed to kickstart America’s manufacturing sector, repatriate its critical supply chains, invest in green energy and protect against cyberwarfare. This all bears directly on Washington’s rivalry with Beijing.

Biden’s plan should help the US compete with China, especially in providing an alternative infrastructure model, giving Washington trade leverage and bolstering American credibility on social justice issues. But it does not address the central irritants in the relations of the two countries, namely Taiwan, the South China Sea and intellectual property theft.

It also overlooks opportunities for cooperation, particularly on issues such as climate change. The US-Soviet rivalry may have been predicated on the logic of Mutually Assured Destruction, but the Washington-Beijing competition need not be zero-sum.

Biden likes to invoke history to rally support. The White House boasts that its infrastructure plan would ‘invest in America in a way we have not invested since we built the interstate highways and won the space race’. Such examples are instructive.

The highway system, which Dwight Eisenhower believed would speed the evacuation of cities in the event of nuclear attack, helped Detroit car makers thrive. The space race had military and foreign policy rationales, but that investment in R&D also helped fuel America’s post-war boom.  And without early Pentagon support for the internet, Silicon Valley would not be the juggernaut it is today. Previous government investment helped to simultaneously restructure America’s economy and serve national security.

Seeking a positive synergy

Yet events could foil Biden’s plans for reform. Crisis response rather than political agendas tends to define presidencies. After all, George W Bush wanted to focus on education, not terrorism, until the 9/11 attacks on the Twin Towers dramatically derailed his plans. And Trump would probably have won re-election if not for the Covid pandemic.

As Abraham Lincoln, who shepherded the US through its worst crisis, admitted: ‘I claim not to have controlled events, but confess plainly that events have controlled me.’ By tying together domestic renewal and national security, Biden seeks a positive synergy. But that risks allowing a crisis in one area to consume the other. 

While transnational threats such as climate change or pandemics don’t respect the distinction between foreign and domestic policy, neither do partisan politics. Yet America’s recent response to these challenges have often deepened domestic polarization, which undermines its ability to act effectively abroad. 

Biden’s success may hinge on his ability to avoid becoming trapped in that terminal cycle.

To read the original commentary from Chatham House, please visit here