The president’s ‘transformative’ agenda runs into reality
Sometime in the last week, Democrats looked at the calendar and realized that President Biden is in trouble.
My theory is that the moment of truth arrived on May 27. That was when Senate Majority Leader Chuck Schumer had to scramble to save one of his priorities, the U.S. Innovation and Competition Act, from falling apart. Then, on May 28, the proposed commission into the January 6 riot at the Capitol failed to clear the filibuster.
The panic started. You began seeing articles about the “summer slump” that afflicts presidencies. You started hearing that Biden can’t let negotiations with Republicans drag on. Before leaving for Memorial Day recess, Schumer told reporters that when the Senate returns he plans to hold votes not only on the constitutionally dubious “For the People Act,” but also on the Paycheck Fairness Act, the Equality Act, and two gun-control bills.
And that’s just what the House has passed already. The president’s $4 trillion American Jobs Plan and American Families Plan haven’t come to a vote in either chamber of Congress. They haven’t been put into legislation. The fate of these projects depends in large part on Biden’s ability to strike a deal on infrastructure with Republican senator Shelley Moore Capito of West Virginia. The likelihood of a bargain? Not great.
For Democrats, the Biden presidency is an hourglass and the sand is running out. They have two years to enact the “transformational” agenda that, presto change-o, will turn Biden into the new Franklin Delano Roosevelt. And since they have incredibly narrow margins in the Congress—four votes in the House, a tied Senate—they have to remain unified. “That is a problem with the Democratic Party,” the activist Rev. William J. Barber II told the Washington Post. “What you see with Republicans—they stick together no matter what.” He must not see many Republicans.
It is still a problem with the Democratic Party, though, because Democrats agree on one thing alone: They oppose Donald Trump. They’re happy he’s not president. They don’t want him to be president again. Beyond Trump, however, Democrats are all over the place. They have Joe Manchin and Kyrsten Sinema on one side of the caucus and Bernie Sanders and Elizabeth Warren on the other.
The coalition that elected Biden is even broader, stretching from Cindy McCain to Alexandria Ocasio-Cortez. An alliance formed on the basis of opposition to one personality is never going to be ideologically uniform. Nor is it going to be stable. The Democrats face a similar problem as the coalition government that was agreed to in Israel this week: What do you do after the boogeyman is gone?
The Senate filibuster isn’t the Democrats’ chief obstacle. Coherence is. Biden is pretending he has 60 votes for the liberal wish list. In reality, he doesn’t have 50. So what does he do? He blames his party’s congressional majority of “effectively, four votes in the House and a tie in the Senate, with two members of the Senate who vote more with my Republican friends.” He doesn’t ask why the majority is so small. He doesn’t rethink his plans. Instead, he amps up the rhetoric. He says Republicans are engaged in an “un-American,” “truly unprecedented assault on our democracy.”
It’s part of a strategy to browbeat Senator Joe Manchin of West Virginia into reversing his well-documented support of the filibuster and becoming the 50th vote for the “For the People” Act. More than 100 left-wing groups sent a letter to Schumer this week demanding that the filibuster be junked. As Rev. Barber told the Post, Democrats “need to let Manchin understand we elected Joe Biden—not Joe Manchin—to be president.”
Joe Manchin isn’t president, of course. He’s a senator from a state that gave Donald Trump a 39-percent margin of victory in the last election. Nor is it only Manchin who’s keeping the filibuster alive. Sinema, who won a narrow victory in 2018 in a state that went for Biden by some 10,000 votes in 2020, is too. And Dianne Feinstein seems to agree with them—at least when her staff isn’t around. There are probably several other Democratic senators who are happy to let Manchin and Sinema take the heat for a policy they privately agree with.
If you listened only to Biden, you might conclude that the 2020 election was a victory for the left. It was not. The election continued a three-decade-long partisan stalemate and, for at least two years, handed slight control of government to the Democrats. Why? Because the public disapproved of Donald Trump.
It is this failure to recognize the limited nature of his electoral mandate that has set Biden up for disappointment. “June should be a month of action on Capitol Hill,” he told the audience during his speech in Tulsa, Oklahoma, this week. It more likely will be a month of frustration. The president’s long hot summer is just getting started.
I did something that neither the President or Vice President of the United States are willing to do. I went to the border in Texas to learn and see with my own eyes what is going on. And to be blunt, it is far worse than I imagined — for everyone. The only people profiting from what is currently happening at the border are the human traffickers and drug cartels. Everyone else — on both sides — is a loser if this situation persists.
Here’s what I saw with my own eyes and heard with my own ears when I went to Del Rio, Texas — a town of about 35,000 people about 150 miles west of San Antonio along the Rio Grande. Local law enforcement are overwhelmed and over run. The local sheriff’s department was never intended to be a border security force. Their job is to enforce the law within the county, not monitor the border. They are stretched thin and only have four deputies to spare along almost 120 miles of border. That means one deputy to cover about 30 miles.
But even the US Border Patrol is overwhelmed. They have been put in an impossible position. Border walls are no longer being built. Technology to help border agents has been turned off. So they are left to patrol the border as best they can and even they believe they are only catching between 1/2 and 1/3 of those racing across the border.
Imagine living in a town of 35,000 people and having four times that many people flooding across the border in the space of only a few months. And that is only a low-ball estimate. Even the Border Patrol agents said that probably double to triple that many are actually crossing the border. But that they cannot count them all because so many evade detection.
I attended a townhall meeting where locals came to express their concerns. The auditorium was packed and many people were standing along side and back walls. For more than two hours a parade of local citizens — a slight majority of whom appeared to be people of color — came forward to the microphone an in a couple minutes told their experience. Here’s what I learned:
Dozens and dozens of locals described how illegals had damaged their property, broken-in to their homes, sheds, and cars. I listened for more than two hours as they described how their families and children are now living in constant danger and fear.
Some of those who spoke were descendants of the original Mexicans who wanted to be free of the despotism of Gen. Santa Anna. Their ancestors defended and died at the Alamo. Others joined Sam Houston’s army that ultimately defeated the Mexican army and won Texas’ independence. Some of the speakers came to America legally in the last decade or so and spoke English with an accent. Not that any of that matters, but the point, is, it was a diverse audience with a diverse background, but they were all united in one thing — the current situation is unbearable and must be fixed.
They described how difficult it is to make ends meet even in better times — but that when there is a constant stream of trespassers damaging your property, destroying your fences, allowing your livestock to escape, stealing your vehicles, and putting you and your children in fear for their lives and safety, it just isn’t worth it.
They described vehicles — stolen by human smugglers — driven recklessly and dangerously and colliding with locals — causing serious injuries. Several speakers referenced a young girl and her father who miraculously survived but suffered life changing injuries due to a head on collision with a human smuggler driving a stolen car.
They described having to hide inside their homes as a group of more than a hundred illegals streamed across their property in the dark of night.
A woman painfully described how her sister — who works as a house keeper at a local hotel which has been used by federal authorities as a place to house illegals before they are sent to other parts of the United States. This woman tearfully told us that her sister was brutally raped on the job.
They all had their own story, but they all expressed a sense of betrayal. And they also had a sense of anger and frustration that when they express their concerns, all too often, they are labeled as haters or intolerant and that they are ignored as if they don’t matter.
A woman of hispanic descent holding babies and speaking in an accent described how she and her family had come to America legally years ago to have a better life and become an American. She spoke with pride of their home in America and the life that they had built here. But then she asked why she and her family don’t matter, why their rights to freedom and the pursuit of happiness are now irrelevant.
Even Democrats told us that Joe Biden and Kamala Harris and their policies are the primary cause of their problems. In Washington, we are used to partisans covering for their fellow partisans now matter how absurd the defense. But reality has forced this sort of blind partisanship to the side.
But it isn’t just the locals in Texas who are suffering. Many of those coming across the border are doing so because they’ve been invited to. But they, too, have become victims of the human smugglers and drug cartels who make them indentured servants and who threaten with physical harm and death their remaining family who serve as collateral for the cost of being smuggled across the border. These remaining family members live the rest of their lives under constant fear that the cartels and human smugglers will pay them a visit because of a late payment. Simply stated, our current policies are allowing human smugglers and drug cartels to flourish and profit and with those profits, they will not be building hospitals and schools. Instead, they’ll be building armies to expand their human smuggling operations and militarizing the border.
The Biden-Harris administration says it is working on root-causes. But stamping out poverty in central America and around the globe, is not something that will happen this year or even this decade. America has spent literally trillions of dollars in the past generation to stamp out poverty and made little impact. So if they do as well in the rest of the world as they have in the US, 50 years from now, we will still be discussing the root causes of the problem and debating how many more trillions must be spent to fix it.
But for people on both sides of the border that will be very sad news — a constant flow of crime and fear for generations to come and a perpetual stream of cruel and inhuman treatment from human smugglers and drug cartels. This is what I saw. This is what I heard. It was heart breaking. These are the cruel results of the ill-conceived and poorly thought out policies of the Biden-Harris Administration. False narratives won’t fix the problem. People on both sides of the border need solutions. And a secure border is where it all starts.
President Joe Biden signed into law Thursday a bill making June 19 a federal holiday commemorating the end of slavery but not everyone sees it as progress closing the racial divide keeping Americans apart. Members of the Project 21 black leadership network – which has used the anniversary as an opportunity to encourage other black Americans to celebrate their liberty and self-sufficiency in a nation that offers unlimited opportunities for two decades – said the effort may distract attention from the real problems the black community faces daily.
“Far too many Americans, regardless of their ethnic background, are unfamiliar with Juneteenth. The blessing of liberty was irrevocably granted on June 19, 1865, to those who remained enslaved in Texas, not knowing they had been freed more than two years earlier. For them, this was their declaration of freedom,” said Project 21 member Derryck Green. “While I am agnostic on a national holiday, I don’t want the commemoration hijacked by racial activists who would use it as another tool to demonize white Americans under the pretense of racial justice. As we’ve seen since last summer, this has been destructive to the American experiment.”
The bill, which was passed overwhelmingly by the U.S. House of Representatives on Wednesday after a unanimous vote in the Senate, commemorates the June 19, 1865, arrival of Union troops in Galveston, Texas who brought with them news the Civil War had ended, and that President Lincoln had abolished slavery throughout the Confederacy two-and-a-half years earlier through the Emancipation Proclamation.
Galveston’s former slave population began celebrating its freedom annually on the anniversary of this day. “Juneteenth” grew to become a motivating and stabilizing commemoration for black Texans experiencing the uncertainties associated with their newfound freedom and full integration into American society.
“Juneteenth is already everything but a national holiday since 47 states, local governments, and even private companies recognize it,” said Project 21 member Martin Baker. “Juneteenth was an acknowledgment of the Emancipation Proclamation, which history tells us only applied to the states in rebellion. If we want to celebrate an all-encompassing ‘Freedom Day,’ perhaps we should choose December 6 – the anniversary of when the 13th Amendment was ratified.”
During the debate over establishing the new holiday, some lawmakers raised concerns about its cost. Members of Project 21 however, said they were more concerned whether its creation would be politicized. For example, Senator Ed Markey said when introducing the Juneteenth holiday legislation: “Today we commemorate. Tomorrow, we fight.”
“It is surprising the number of black Americans – let alone all Americans – who are not yet aware” of Juneteenth’s significance, Project 21’s Marie Fischer said. “But to make this a federal holiday is not something I feel is in the best interests of the country, especially now,” she continued before going on to question whether it would help bring the nation together.
“I constantly hear everyone talking about unity, but would a federal holiday end up being a unifier? Or would it give fuel to those who support critical race theory by pointing out a day that marks one group as an oppressor and another as the oppressed? Such a holiday could be easily hijacked by those who insist that blacks only advance when it benefits white elites. Nothing seems to get pushed these days unless it fits a specific narrative,” Fischer said.
“Juneteenth should prompt us not just to take inventory of how far we’ve come, but also realize that – despite the racialized claims of ‘white supremacy’ or ‘systemic racism’ – blacks have the agency and ability to control our own lives,” Green added. “This includes becoming full participants in society.”
The law establishing “Juneteenth” as an officially recognized federal holiday comes roughly a year after the nation was rocked by violent protests following the murder of George Floyd, an African-American man, by a Minneapolis police officer. It will be the eleventh such day, joining a list that includes Christmas, New Year’s Day, Thanksgiving and Independence Day, explorer Christopher Columbus and slain civil rights leader Martin Luther King Jr.
A leading liberal think tank analysis shows the Biden overall tax plan would shred the president’s 2020 campaign pledge that taxes would not be increased “by one thin dime” for anyone making less than $400,000 a year.
According to the Tax Policy Center, if Biden’s combined tax initiatives became law this year, 75 percent of middle-class families would see the amount they pay in taxes increase in 2022, and that 95 percent of middle-class families would pay more in taxes by 2031. At the same time, Biden Treasury Secretary Janet Yellin is refusing to rule out the restoration of special interest tax breaks that would disproportionately benefit the ultra-wealthy.
Testifying recently before the House Committee on Ways & Means, Yellin refused to say whether the president and his advisers would move ahead on demands by Democratic governors like Andrew Cuomo (NY) and Phil Murphy (NJ) and members of Congress from the blue states that state and local tax payments be made fully deductible on federal returns once again. The provision known as SALT was capped from the tax code in the 2017 Tax Cuts and Jobs Acts as a “pay for” that made it possible for other rates to be reduced.
When asked whether Biden would support eliminating the cap if it was included in any compromise infrastructure package. Yellen said, “I’m not going to negotiate here on behalf of the president.”
Biden policies, some lawmakers say, are forestalling the onset of a full-blown recovery caused by the pandemic-related lockdowns that plunged the U.S. closer to financial disaster than at any time since the so-called great recession of 2008.
“Through the first five months of this year, the Biden Administration added 500,000 fewer jobs than the last five months of 2020 – some of which were during the height of Covid cases and deaths. A half-million jobs short. And due to inflation, real wages have declined since President Biden took office,” Brady said in a statement.
The White House has repeatedly denied this is because the enhanced unemployment benefits authorized at the beginning of the lockdown period have been allowed to continue. A study recently published by the Committee to Unleash Prosperity’s Steve Moore, Casey Mulligan, and E.J. Antoni shows the relationship between the two to be direct and economically harmful, a view shared by Federal Reserve Chairman Jerome Powell who has made clear he believes these benefits have discouraged workers from returning to work and harmed recovery.
While Biden policies may be cooling job growth here at home, they’d incentivize job creation and fuel an expansion overseas – especially if the president’s agreed-upon among the G-7 plan for a global minimum corporate tax is eventually adopted.
The 15 percent GMT, which must be approved by Congress before becoming law, would make it better to be a foreign worker or company than an American one. If it’s imposed, it would incentivize U.S. companies to move U.S. jobs overseas and to “offshore” themselves which, before the 2017 Tax Cuts and Jobs Act’s creation of a global intangible low tax income provision was a common occurrence in the American market.
The proposal the Biden administration has endorsed holds out the prospect of a global tax code in which American companies operating overseas have to pay higher taxes than their foreign competitors. This would give foreign competitors an advantage to target American companies and jobs and erode the U.S. tax base. As Brady described it, The White House is “leading a global race to the bottom” for America’s competitiveness and our workers.
Nearly two-thirds of voters say America’s problem with violent crime is on the rise while half the country says President Joe Biden is ill-equipped to deal with it.
A new Rasmussen Reports national found 65 percent of voters likely to cast ballots in the next election felt violent crime is getting worse while fully half – 50 percent – said the problem was beyond Biden’s ability to deal with effectively.
Homicide and other violent crimes have soared since the Black Lives Matter protests began in the aftermath of George Floyd’s death last May while in the custody of the Minneapolis police. Awareness of the problem is slowly permeating the national consciousness to the point famed political consultant James Carville recently penned an essay for the Wall Street Journal telling his fellow Democrats to get ahead of the curve by blaming the rise in the crime rate on former President Donald Trump.
The Rasmussen Reports survey found 72 percent of Republicans, 59 percent of Democrats and, 65 percent of voters unaffiliated voters agreeing violent crime in America is getting worse. It also found the issue transcending racial barriers as 67 percent of whites, 68 percent of black voters, and 57 percent of other minorities found themselves agreeing things are getting worse. Women, by six points, 68 percent to 62 percent, led men in expressing their fear things had worsened, a gap some experts suggest may have something to do with the differences in gender regarding the feeling of personal safety.
According to the Rasmussen Reports analysis, “Biden’s strongest supporters are least likely to think the crime problem is getting worse” yet, among those who give him the highest marks for job performance, 51 percent agreed the problem of violent crime was getting worse while just 18 percent said, “It’s getting better.”
Additionally, the polling firm said, “among voters who strongly disapprove of Biden’s performance, 89 percent say the violent crime problem is getting worse and only 3 percent think America’s crime problem is getting better.”
The reduction in violent crime to near historic lows – which not by coincidence began during a time when Republican mayors were in charge in NYC and Los Angeles – is attributed to “tough on crime, tough on criminals” efforts eventually repudiated by successors including current New York City Mayor Bill de Blasio.
These numbers suggest the GOP may have an opening it did not expect in the run-up to the 2022 elections. The 1994 crime bill, which President Joe Biden pushed through the U.S. Senate as its principal sponsor and floor manager, is widely regarded as having helped set the stage for the Republicans to retake control of the U.S. Congress for the first time in 40 years. With that in mind, Carville’s suggestions in his opinion piece – which is long on rhetoric and short on facts – comes across as an effort to help the Democrats find a way to inoculate themselves against the charge they are “soft on crime” before voters go to the polls.
This theory will be tested out in real life in Virginia in November when voters throughout the state will have the opportunity to elect a new governor, attorney general, delegates to the General Assembly, and other officials. In some communities, prosecutors and other local elected swept into office in a blue wave four years ago with the support of groups affiliated with George Soros who have pursued criminal-friendly policies like no cash bail will have to explain to an increasingly wary electorate why they should be re-elected.
The survey of 900 likely U.S. voters was conducted May 25-26, 2021, and has a sampling error is +/- 3 percentage points with a 95 percent level of confidence.
Both the so-called CLEAN Future Act and the Biden-Harris Administration’s $2 trillion infrastructure package, if enacted, will impose upon America substantially more expensive and less reliable energy, and it will reduce job growth and economic expansion. This will be particularly harmful to the working poor who can least afford these burdens.
We all want a clean future. We all want clean air to breathe, clean water to drink, and a clean environment. We also want our nation’s highways, bridges, airports and transportation infrastructure to be in good working order. But the “CLEAN Future Act” and the Administration’s $2 trillion infrastructure package do very little to ensure a clean environment, and precious little to build and maintain the nation’s highways, bridges, and airports.
Just like with the recently passed $1.9 trillion COVID stimulus, less than 10% of these plans actually do what they say they will do. The bills are largely an excuse to pack the proposals with a grab bag of pork, waste, and extreme regulation that will do far more harm than any good they could possibly do.
The House Energy and Commerce Committee put huge subsidies for Electric Vehicle (EV) chargers into its “CLEAN Future Act.” The Ways and Means Committee is devising new tax credits for EV chargers. And in the Senate, a bill would increase EV tax credits by almost 700% at up to $200,000 per unit.
One could argue that the intensions are good, but arguing that the impact will be good is very difficult. We could spend trillions of dollars to pursue good intentions, but not actually do much to encourage a clean environment or keep energy costs reasonable for the working poor. The marketplace will do a far better job of meeting our future needs and nimbly making adjustments to respond to changing needs.
For example, putting hundreds of billions into charging stations may be a waste of money. There are companies developing technology that would simply swap out an exhausted battery and swap it with a freshly charged one. This could be done in minutes. They would then charge your battery for another swap. I’m not endorsing this technology. I’m simply pointing out that we don’t yet know if consumers want EVs, and if they do, if they want to charge them for an hour or more or simply swap out the battery in an instant and continue driving, or maybe they want some mix of both. The marketplace will figure this out. But Government mandates will impose rigid mandates and lack the ability to balance consumer’s needs.
The truth is government’s push to outlaw the internal combustion engine is typical of its myopic approach. There are many ways to insure a clean environment. Our cleaner burning fuels and cleaner operating engines have done more to give America cleaner air than EVs have done for the environment.
Numerous studies show that EVs have their own massive negative environmental impact. The batteries EVs use are made from rare earth elements that must be mined and the manufacture of batteries produce acid waste and radioactive residues. Plus, an immense amount of energy is required to refine and produce batteries. Another problem is what to do with the batteries once they’ve reached their life cycle end. They are not environmentally friendly and won’t age well in landfills.
So rather than pumping billions or even trillions of America’s hard-earned dollars into programs designed to force consumers into EVs, why not allow the natural maturation of technology to help us make wise choices in the future? Perhaps EVs are the wave of the future. Perhaps not. Wouldn’t it be good to know the answer to that question before we force Americans to devote trillions of dollars into a technology that has not yet proven itself?
Often we are told that we must act now because if we wait, it will be too late. This is a conman’s pressure tactic. Our air quality is improving and has been for a long time. Additionally, America is one of the leading nations in reducing carbon dioxide emissions. It is also worth noting that carbon dioxide isn’t a pollutant. Humans exhale carbon dioxide and plants require it to grow and photosynthesize. So we ought not make carbon dioxide an environmental villain. It is required for life here on Earth.
Before every committee in Congress and the Administration race to see who can throw the largest sums of taxpayer money at EVs and charging stations, let’s allow the technology to mature. Let’s see if consumers want EVs. Let’s see if EVs meet our transportation needs. If they do, the marketplace can best figure out the way to charge or refuel an EV. Government’s attempt to make these decisions before we know the answer to important questions insures that we will waste trillions of dollars promoting things that won’t pan out. And that is money that cannot be invested in real solutions, real jobs or real infrastructure needs. So we ought not be forced to rush when the conman tells us that time is running out. It isn’t.
Let’s start with the internet.
It has its roots in a program called the ARPANET, which was established by the Defense Advanced Research Projects Agency. Private sector entrepreneurs then transformed the internet from an obscure government experiment into the cultural and economic success that it is today. It has made our technology sector the envy of the world and enables us to keep innovating and competing with the likes of South Korea, Canada, Japan, Switzerland, and China.
This matters in light of President Joe Biden’s recently unveiled American Jobs Plan. While billed as a $2.3 trillion infrastructure plan, less than 10% of allocated funds are actually for traditional infrastructure such as roads, highways, bridges, ports, airports, etc. Instead, Biden redefines infrastructure to include all sorts of things, including research and community colleges, that, while they are possibly meritorious investments, have nothing to do with infrastructure. On broadband internet services, which both parties agree isinfrastructure, Biden’s plan has a stated goal of 100% U.S. connectivity.
One problem: The plan wouldn’t actually help connect more people to the internet.
That’s because it relies on government-run broadband to improve America’s internet experience. Government-run networks have a history of failure. They tend to drive out private investment and leave taxpayers holding the bag when the plans fail — without the better broadband they were promised. A perfect example of how government often stymies innovation and entrepreneurship is found in Kentucky. Kentucky Wired, a $1.5 billion plan to improve connectivity across the state was announced under Gov. Steve Beshear. Andy Beshear, Steve Beshear’s son and the state’s current governor, vowed to complete the project by October 2020. But Kentucky Wired has failed. Lesson: Investing public money in laying cable when increasingly affordable satellite networks are at our doorstep is not only counterproductive but irresponsible.
Biden’s plan ignores the dynamics of the marketplace in a similar manner. It also signals rate regulation and arbitrary speed mandates that would discourage satellite providers such as Amazon and SpaceX (Starlink) from investing in infrastructure and creating new jobs. Instead of bridging the digital divide, Biden would widen it by hampering the free market.
Biden’s plan focuses exclusively on a single technology for providing internet access: fiber. To be clear, fiber is often the backbone of the internet and works well in densely populated areas. Private industry has invested billions in deploying fiber across the country. Yet, laying thousands of miles of fiber optic cable is very expensive. Many factors affect the cost of fiber infrastructure, but, on average, the cost of deploying fiber runs between $18,000 and $22,000 per mile. In rural areas, it is often far too expensive for most businesses to recoup their fiber deployment costs. The good news is that America uses a mix of technologies to get online — from cable and fiber to 5G and NextGen satellites. If Biden chooses not to impose a one-size-fits-all solution, the private sector can meet the challenge of closing the digital divide. But as it now stands, Biden’s plan would stop this competition between technologies. Instead, it would replace that competition with a top-down approach in which government picks the winners and losers rather than letting consumers make the choices.
A better idea would be for Biden to expand Broadband Opportunity Zones and encourage billions in investment where it is needed the most. Private enterprise will invest in solutions that work for underserved areas.
Put simply, Biden’s infrastructure bill is a bad deal for America. It is entirely reasonable to fund the building and maintenance of interstate roads, bridges, ports, and highways. It is also good to incentivize innovation and investment. Sadly, Biden’s bill discourages those imperatives without good cause and at great risk.
While migrants from Central America stream to the U.S. border, any positive effects of Biden’s 'root-cause' strategy will be slow and incremental at best.
The journey of Central American migrants to the U.S. border — a perilous trip across thousands of miles of mountains and deserts — starts in places like the dry corridor in western Honduras.
Many of the region’s 1 million small farmers still live in adobe huts with no running water and suffer acts of humans and nature. Corrupt Honduran officials have invested too little in stabilizing or modernizing the region, allowing violent gangs to extort families. Recent droughts and hurricanes have created widespread hunger.
“It’s been one crisis after another,” says Conor Walsh, the Honduras representative for Catholic Relief Services in Tegucigalpa, the capital. “Many people have already migrated and others are evaluating whether they can stay on their farms.”
These longstanding problems throughout Central America are driving the current crisis on the southern U.S. border, where more than 170,000 migrants arrived in March in search of jobs and asylum. As the Biden administration grapples with this mounting surge, it’s also proposing a $4 billion long-term plan to attack the root causes of migration — corruption, violence, and poverty in Honduras, El Salvador, and Guatemala.
The initiative is as ambitious as it is familiar. Presidents as far back as John F. Kennedy have pursued similar aims only to come up short. Joe Biden himself ran the troubled Central America initiative during the Obama administration. It encountered the same obstacles that have stymied past U.S. efforts — governmental leaders and business elites who resist good governance and anti-corruption reforms to protect their own interests, according to a study by the Wilson Center, a policy research group in Washington.
Consider Honduras, a showcase of government criminality. President Juan Orlando Hernandez’s election in 2017 was tainted by fraud. He is now under investigation by U.S. prosecutors who have brought a string of cocaine smuggling cases against prominent Hondurans. Members of the National Congress in Tegucigalpa have a habit of embezzlement, thereby robbing citizens of funding for health care, education, and jobs.
Nonetheless, U.S.-funded programs have struggled to make a difference in a nation in which government is a big part of the problem. Catholic Relief Services, for one, has helped boost the corn and bean yields and income of thousands of subsistence farmers in the Honduran dry corridor, offering a glimmer of hope. But a lack of roads, electricity, and credit for farmers means that only a sliver of them benefit from the technical aid. As a result, an unprecedented 47 percent of families in the dry corridor that stretches across Central America are moderately to severely food-deprived, according to an alarming 2017 United Nations study.United Nations World Food Program.
Now comes Biden’s crack at the region. He’s tweaking the U.S. aid playbook in hopes of a better outcome. The administration says fighting corruption is now the top priority since nothing will change until elected officials stop stealing and the governments become more accountable to citizens. Countries will have to meet stricter conditions, such as adopting governance reforms, before receiving aid, and officials face the threat of financial sanctions and revoked visas. The proposed $4 billion strategy, the biggest ever for the region, gives the administration some added leverage.
Vice President Kamala Harris heads the strategy team, which includes White House aide Juan Gonzalez and Ricardo Zuniga, the special envoy to the region. Zuniga was born in Honduras and both men worked on Western Hemispheric affairs in the Obama White House. In March, they traveled to the region and had “very frank discussions” with leaders about transparency, good governance, and anti-corruption, said one administration official.
The Treasury Department followed up those talks with sanctions in late April against Felipe Alejos Lorenzana, a Guatemalan Congressman, and Gustavo Adolfo Alejos Cambara, a former official. They reportedly facilitated payments to lawmakers and judges to try to interfere with the appointment of magistrates and protect against corruption prosecutions, Secretary of State Antony Blinken said in a statement.
“You have to create a system of accountability that goes after the very corrupt elements within these governments,” added Steven Dudley, co-founder of InSight Crime, which investigates organized crime in Latin America. “The people Biden put in place have the experience and ideas, but the bridge between that and actually doing something is long.”
The get-tough diplomacy is already hitting resistance. In early April, Zuniga visited El Salvador to press the case against corruption. But President Nayib Bukele, miffed over criticism from a State Department official about his commitment to the rule of law, refused to meet with the envoy.
The snub would be familiar to a long line of presidents who have stumbled in the region. Since 1960 administrations have strategically deployed about $24 billion in foreign aid to Central America and the Caribbean.
During the Cold War years, aid was meant to reduce poverty to build support against leftist movements in El Salvador and its neighbors. It didn’t work. When the decades-long civil wars in the region finally ended in the 1990s, peace did usher in a long stretch of economic growth and declining poverty rates. In the ensuing decade, as drug trafficking and gang violence soared, the George W. Bush administration took its turn in Central America. It sent assistance to combat crime. But the programs lacked coordination and had a limited impact, according to another Wilson Center report.
The Obama administration had bigger ambitions. It expanded on Bush’s security initiative by adding governance and economic programs. The $2.4 billion “strategy for engagement” for El Salvador, Guatemala, and Honduras began in 2014 and included 370 projects to make local officials more accountable, reduce crime and create jobs. In an op-ed supporting the strategy, Vice President Biden praised the nations’ commitment to reform and even met with President Hernandez at the White House in 2015 — an endorsement that proved too bullish.
After five years, the Government Accounting Office was blunt in its assessment of the projects that were mostly run by the State Department and the U.S. Agency for International Development. Those reviewed by GAO achieved only 40 percent to 70 percent of their own technical targets, such as the number of police officers trained. Officials didn’t even bother to evaluate most of the projects or whether they helped improve governance, security, and economic opportunity.
When the biggest wave of migrants in more than a decade hit the U.S. border in 2019, the Trump administration pulled the plug on the Obama root cause strategy. USAID, now run by Samantha Power, a former envoy to the U.N. under President Obama, didn’t provide a spokesperson to comment for this story despite several requests.
Biden, who now has a second chance to get it right, faces his biggest test in Honduras. Its economy, which was once dominated by exports of coffee and bananas to the United States, has produced a number of ultra-wealthy clans resistant to the idea of cleaning up corruption.
Miguel Facusse, whose nephew served as president of Honduras, became rich from palm oil production and consumer products. But his legacy is tainted by accusations from human rights investigations that his security forces were involved in deadly clashes with small farmers over their claim to land in the region where his plantations operate.
As the economy became more service-oriented, former Vice President Jaime Rosenthal made a family fortune estimated in 2015 at $690 million from banking, telecommunications, and other businesses. But before his death two years ago, Rosenthal was indicted by U.S. prosecutors for participating in a money-laundering scheme with Honduran drug traffickers.
Honduras emerged as a cocaine transshipment point between South America and the United States a few decades ago. The 2009 coup in Honduras that ousted President Manuel Zelaya opened the door to more trafficking. Zelaya, a Liberal Party politician, had raised the minimum wage by 60 percent and defended the land rights of small farmers. Even more worrisome to business leaders like Facusse was that Zelaya had become cozy with leftist despots in the region and pushed to amend the constitution in an apparent attempt to extend his own presidency.
Zelaya’s ouster by the military led to a period of internal tumult, forcing the National Police to focus on restoring order, often violently cracking down on protesters. By 2015, 90 percent of cocaine coming to the United States passed through Central America, with Honduras as the major hub. More recently Hondurans have developed labs to produce cocaine, extending its tentacles in the economy, according to a report by InSight Crime.
Today, President Hernandez tops a list of Honduran politicians, military, and police officers who are under investigation or have been convicted of operating what seems like a state-sponsored drug cartel, according to the U.S. prosecutors. They say in 2013 Hernandez, who was then in Congress and campaigning for the presidency, got access to millions of dollars in cocaine from a murderous trafficker. In return, the politician allegedly told the trafficker, who was convicted in a U.S. court in March, that the military and attorney general would protect his operation. The president has repeatedly denied any involvement in trafficking.
The president’s brother, former congressman Tony Hernandez, was involved in every aspect of the cocaine trade. The end game was political power. He funneled millions of dollars in profits into National Party campaigns for three presidential elections, including the two his brother won in 2013 and 2017, prosecutors say. Tony Hernandez was handed a life prison sentence in March.
The Biden administration points to the silver linings in the dark clouds of the region’s recent history. In the last five years, an effort to root out political corruption made remarkable progress before it was quashed. In 2016, large street demonstrations over the looting of at least $300 million from the public health care system — a small amount of which found its way into Hernandez’s first presidential campaign — forced the president to set up an anti-corruption commission in partnership with the Organization of American States. The United States embraced the move with funding and political support.
The commission’s quasi-independence — it was led by Peruvian prosecutor Ana Maria Calderon Boy and others from outside Honduras — keyed its initial success. The commission set up a new unit of vetted prosecutors within the national government. It went on to reveal an embezzlement scam that later allegedly implicated more than 350 politicians, including President Hernandez, according to the Wilson report. Amid the scandal, he essentially disbanded the commission last year — a decision that brought condemnation from a bipartisan group of U.S. House leaders.
The Biden administration now aims to set up a new anti-corruption group as its main weapon. This time even more independence will be crucial if it’s to work. Zuniga, the special envoy, had discussions with nonprofits in Central America that want to form a U.S.-backed civil society commission. It would draw on the expertise of these groups in exposing corruption and operate outside the reach of national governments to shut it down. But local prosecutors would still have to pursue the cases.
“Instead of creating another commission that the governments can kick out, the United States can support nonprofits that have years of experience doing this work,” says Kurt Ver Beek, co-founder of the Association for a More Just Society in Honduras, who joined the talks with Zuniga. “We will make the corruption cases public and, along with the United States, pressure the governments to bring charges.”
The U.S.-backed effort to reform the National Police also got off to a promising start five years ago. The police served as a tool for cocaine smugglers, who easily exploited lowly paid officers with payoffs for dirty work. “Officers hijacked cars from citizens, dealt drugs for gangs, and lent out their services as hitmen,” according to a 2016 report by Ver Beek’s ASJ, the Christian nonprofit, which received funding from the State Department.
The revelation in 2016 that top police officials organized the assassination of Honduran’s anti-drug czar finally forced President Hernandez and Congress to set up another commission. Two ASJ leaders joined the group, which moved quickly to purge a remarkable 5,000 tainted and inexperienced beat cops and top officials — including six generals — equaling a third of the entire force.
The purge was a watershed moment showing that Hondurans could topple a fortress of criminality. But four years later drug smugglers are beginning to penetrate the police again, forcing good officers to choose whether to take a bribe or a bullet. “Traffickers tell cops, ‘I’ll kill you if you don’t help me, or take a bunch of money,’” says Ver Beek, a Cornell University-trained sociologist. “So they take the money.”
American agencies funded other projects such as community policing to reduce crime in Honduras, which a decade ago had the highest murder rate in the world. In her congressional confirmation hearing, Power, Biden’s new USAID administrator, pointed to the agency’s record of crime-fighting in the country as a bright spot to build on. “In districts where USAID had programming aimed at curbing violence, there was a drop in homicide rates,” she told senators in March. “That is encouraging.”
However, extortion of businesses by criminal gangs — a major driver of migration — may be getting worse. Gang members approach small businesses, such as barbers, food merchants and taxi drivers, and demand a small monthly payment that keeps going up until the owner can no longer pay it and flees. Hondurans refer to extortion as a “war tax,” which victimizes as many as half of all small businesses, Ver Beek estimates.
While officials pilfer public funds and gangs drive businesses to close, it’s no wonder that half of the Honduran population remains almost locked in poverty. The high rate hasn’t improved much over the last decade and is twice the level of neighboring El Salvador. As the Obama administration learned, foreign aid alone can’t do much to help kids escape this poverty trap.
USAID’s Future Employment program had ambitions in 2016 to train 7,500 at-risk youth in Honduras and place half of them in jobs to lure them away from gangs. The program struggled to find enough recruits in tough neighborhoods and enough employers willing to take a chance and hire them. Then the Trump administration cut off funding for projects across the three countries. By the end of 2019, fewer than 1,000 participants had found some employment, mostly in retail, in the year following training, according to a USAID evaluation.
While they certainly benefited from a job in the short term, their prospects of upward mobility are dim without more support from the Honduran government. For instance, the country has a federal minimum wage law that’s set above the poverty line and could help close the inequality gap. But almost half of employers ignore it and the government does little to enforce it, academic studies show.
“We have not produced the same kind of results that I’ve pointed to when it comes to physical security and crime,” Power said of USAID’s economic programs. “Hopefully we can begin to make a dent.”
Power could start by changing the way her agency runs projects in places like Honduras, nonprofit veterans believe. Aid experts have criticized the agency for hiring U.S. and international contractors to administer most of the program funding. The setup marginalizes local organizations that better understand on-the-ground issues and misses an opportunity to develop local advocates to push for reforms, says Sarah Bermeo, who specializes in foreign aid in Central America at Duke University.
“U.S. contractors are certainly overused compared to their ability to deliver results,” Bermeo says. “There is certainly room to improve outcomes by increasing the involvement of local groups in the design and implementation of AID-financed efforts.”
Meanwhile, migrants from Central America are streaming to the U.S. border. The increase that began a year ago has accelerated under Biden, threatening to top 1 million this year, the highest total in more than a decade. Biden’s root-cause strategy won’t change anything at the border in the short run. Advocates say progress will be incremental at best and measured in decades, not years.
“It’s going to be difficult but not impossible for the administration,” says Ariel Ruiz Soto, an analyst at the Migration Policy Institute in Washington. “The U.S. investment has to occur over decades for there to be a real change.”
Several of the Biden administration’s key climate goals — particularly steps to reduce U.S. greenhouse gas emissions in the power and transportation sectors — are likely to be held hostage by China. A shift away from fossil fuels to renewables to produce electricity, and the deployment of more electrical vehicles on America’s roadways, depends upon batteries. Since China currently controls the entire life cycle of battery development, the Biden administration needs a strategy to mitigate China’s dominant position. While the president’s special envoy for climate, John Kerry, hopes to approach climate as a “critical standalone issue,” the fact is that geopolitics will shape the choices President Joe Biden will have to make. The Biden administration will not be able to “compartmentalize” its climate policies from the overall U.S.-Chinese relationship. China’s strength in the new green industries presents a strategic challenge.
Energy storage has been called the “glue” of a low-carbon economy, enabling the greater use of intermittent power sources such as wind and solar. The World Economic Forum argues that batteries are a critical factor in reaching the Paris Agreement goal of limiting rising temperatures to 2 degrees Celsius. By 2030, it stated, batteries could enable 30 percent of the required reductions in carbon emissions in the transport and power sectors.
Batteries and Bottlenecks
The battery supply chain is complex, but it can be reduced to four key elements: mining the critical minerals, processing them, assembling the battery parts, and recycling.
Under its “Go Out” investment strategy, China has spent the last two decades solidifying control over the main critical minerals for battery cells — lithium, cobalt, and graphite. Beijing now controls some 70 percent of the world’s lithium supplies, much of which is located in South America. More than two-thirds of the world’s cobalt reserves are found in the Democratic Republic of the Congo, and China has secured control over 10 of the country’s 18 major mining operations, or more than half its production. Beijing is also the world’s largest consumer of cobalt, with more than 80 percent of its consumption being used by the rechargeable battery industry. Graphite is the largest component by volume in advanced batteries, but spherical graphite, the kind that makes up the anode in electrical vehicle batteries, must be refined from naturally occurring flake graphite. And China produces 100 percent of the world’s spherical graphite.BECOME A MEMBER
Second, China has developed the largest minerals processing industry in the world. After these critical minerals are mined from the earth, they must be separated, processed, refined, and combined. This process is dirty and environmentally unfriendly. Lithium-ion batteries contain hazardous chemicals, such as toxic lithium salts and transition metals, that can damage the environment and leach into water sources. This is likely a key reason why few processing facilities are located in North America. The critical minerals the United States does mine are often shipped back to China for refining.
According to Benchmark Mineral Intelligence, Beijing also controls 59 percent of global lithium processing, 65 percent of nickel processing, and 82 percent of cobalt processing. And an important aside is that China produces roughly 90 percent of the magnets needed for the motors of electrical vehicles.
As early as 2008, China announced billions of dollars in infrastructure investments in the Democratic Republic of the Congo, by far the world’s largest cobalt producer, in exchange for mining rights. The partnership continues to flourish. In January of this year, the Democratic Republic of the Congo formally joined China’s “One Belt One Road” initiative. The Chinese mining company Tianqi Lithium has acquired stakes in major mines in Chile and Australia, giving it effective control over nearly half the current global production of lithium. China controls even more market share in the refining and processing parts of the mineral supply chain. Together, these state-backed investments have given Chinese battery makers like Contemporary Amperex Technology Co. Limited (CATL) an advantage over Japanese and American competitors.
Third, once these minerals are processed, they are packed into battery cells, which are combined into modules and which, in turn, are wrapped into battery packs. This process takes place in dedicated battery factories called “gigafactories.” Like the rest of the battery supply chain, very few of these specialized factories are located in North America. About 136 of the 181 lithium-ion battery gigafactorieseither planned or under construction worldwide are, or will be, located in China. Just 10 are planned for the United States. An important step in the right direction is General Motor’s consideration of building a second battery factory in the United States — it already has a new facility online in Ohio — but the United States needs to do more.
Finally, once batteries have reached the end of their life cycle, the critical minerals in each cell can be reused. But China dominates the battery recycling industry as well. This is partially because China has built infrastructure to recycle lithium-ion batteries for consumer electronics. In 2019, around 70 percent of lithium-ion batteries were recycled in China and South Korea. And because China is by far the world’s largest electric vehicle market, it will remain a key contributor to lithium battery waste — thus allowing Beijing to recycle at scale.
China has been strategic about building up its recycling capabilities, requiring manufacturers of electric vehicles to be responsible for setting up facilities to collect and recycle spent batteries. As a part of this initiative, automakers were required to establish a maintenance service network to allow consumers to repair or exchange old batteries.. Going forward, recycling will only become more important. By 2030, 11 million metric tons of lithium-ion batteries are expected to reach the end of their service lives. Eventually, a robust recycling process could offer a way for countries to mitigate some Chinese-controlled bottlenecks in the supply chain. But taking advantage of this will require environmentally friendly recycling facilities in the United States.
Commanding Heights: Technology and Leverage
China’s dominance across this supply chain should come as no surprise. As in other key economic and technology sectors such as flexible manufacturing, solar panels, and wind turbines, China has achieved dominance by careful planning and investments — as well as unfair practices such as those that led to the dominance of China’s solar panel manufacturing industry. (And it’s worth noting that this issue became one of the most contentious issues between the European Union and China as well.) In addition, many pointed to China’s massive intellectual property theft as a key contributor to its dominance in these key sectors.
Because China takes a strategic national approach, it has been particularly good at identifying key foundational sectors or platforms to grow or control, thereby increasing its economic and geostrategic power. For example, it has used its dominance in financial technologies across Asia to increase the power of its surveillance state by collecting the data associated with payments. It has prioritized 5G, and, with state financing and other forms of support, it has built out its network and is far ahead of the United States in land stations. Notably, this 5G infrastructure will have direct relevance to China’s ability to develop autonomous vehicles, since self-driving vehicles and other platforms, like drones, depend upon the fast connectivity 5G networks provide. (And autonomous vehicles are closely related to the electrical vehicle industry.)
Beijing’s “Made in China 2025 plan,” announced some six years ago, called for major advances in semiconductor fabrication and provided more than $150 billion to support that goal. Some recent reports suggest that China aims to produce some 70 percent of its domestic chip needs within China by 2025 and to reach parity with international technologies five years later. As Jonathan Ward has pointed out, “the mastery of advanced technologies and the creation of a powerful industrial base for civilian and military purposes” are essential pieces of China’s global strategy and activities. While the United States now increasingly recognizes this reality — with legislation such as the Creating Helpful Incentives to Produce Semiconductors for America Act (CHIPS for America Act), as well as executive branch attention by both Presidents Donald Trump and Joe Biden — there remains a far gap between strategy development, desired outcomes, and actual implementation.
Advanced energy is another key platform. Thus, it is not surprising that the “Made in China 2025” plan also included “new energy vehicles” and “new energy” as one of its 10 areas of focus. Beijing considers advanced batteries and electric vehicles a key strategic sector worthy of extensive industrial planning. One report noted that, in the science and technology sector alone, the Chinese Communist Party has issued as many as 100 plans. Several of these, including its 2011 strategic emerging industries plan, focused on key strategic sectors, including the “new energy automobile industry.” In 2017, General Secretary Xi Jinping released an Outline of the National Strategy for Innovation-Driven Development that includes differentiated strategies to produce “modern energy technologies.” And China is using its “One Belt One Road” framework to make strategic investments around the world and vertically integrate its supply chain for battery production.
The Chinese Communist Party has recognized that pressure to address climate change will prompt a shift toward renewable energy around the world. With a regulatory push across Europe, some expertsanticipate that, by 2040, about 70 percent of all vehicles sold in Europe across different segments will be electric. Others believe that the global electric vehicle market — about $250 billion today — will grow to almost $1 trillion by 2027.
China has positioned itself well for this transition. On the one hand, China will have the benefit of cheap fossil fuels. China will not even begin to reduce its own carbon emissions for another 40 years, until 2060. It continues to build coal plants around the world. (In 2016 alone, Chinese development banks invested $6.5 billion in coal infrastructure overseas, mostly in neighboring developing countries). On the other hand, the Chinese Communist Party has positioned itself at the center of a global energy revolution.
If anyone has doubts about the determination with which this might unfold, China’s automobile market was virtually nonexistent until the early 1990s but surpassed the United States in 2009 to become the world’s largest.
Rewiring the global energy economy around China would provide Beijing with massive economic benefits. Experts have pointed out that China’s focus on energy security and technological self-reliance are key factors informing Beijing’s aim to reach carbon neutrality by 2060. Chinese ministries have estimated that achieving this goal could lead to over RMB 100 trillion ($14.7 trillion) in investments over the next 30 years.
As a result, China has made significant advances in energy storage, leading Europe’s top automakers to move most of their research and development operations to China. Since 2018, the largest European carmakers (BMW, Daimler, FCA, Groupe PSA, Renault, Volkswagen, and Chinese-owned Volvo) have chosen Chinese partners for 41 cooperation projects. And European carmakers have also directly invested in their own research and development centers in China, establishing nine such centers since 2018.
Whatever the real intentions behind General Secretary Xi’s effort to put China at the center of an “an ecological civilization,” it is shortsighted and ahistorical to think that China will not use this leverage. It has done so in the past. In 2010, a Chinese fishing boat rammed two Japanese coast guard vessels in the contested waters of the East China Sea. When Tokyo arrested the fishing boat’s captain, the Chinese Communist Party retaliated by placing an embargo on rare earth sales to Japan.
More recently, in June 2019, Chinese state-controlled media threatened disruption of rare earth supplies to the United States — this time targeting U.S. defense contractors. The threat noted that “military equipment firms in the United States will likely have their supply of Chinese rare earths restricted.” This past February, China threatened to use export controls to cut off U.S. access to the equipment used for processing rare earths, a ban that would be as devastating as cutting off production of rare earths themselves. And Australia is feeling such pressure as China has restricted imports of Aussie beef, wine, and barley — and reduced the flow of Chinese students to Aussie universities — unless Australia submits to a list of 14 politicaldemands by Beijing.
This behavior is consistent with China’s use of “sharp power” — diplomatic, economic, or technological coercion — to pursue its policy objectives. This fall, China passed its first unified export control law, allowing the Chinese Communist Party to control the export of items including very broadly defined “dual-use goods” to specific foreign entities. As the Merics institute has pointed out, any exports that fall under “overall national security” — and the law appears intentionally vague — could be prevented, thus allowing Beijing to retaliate against countries or companies for policy disagreements or geopolitical reasons. Given Beijing’s designation of the electric vehicle and battery sectors as strategic industries, the Chinese Communist Party could potentially weaponize key bottlenecks in the supply chain against the United States.
For much of 21st century, the United States was dependent upon the Middle East for oil. As the Biden administration seeks to shift to renewables and reduce carbon emissions through the deployment of more electric vehicles, it should not trade one dependency for another. As one expert group put it, the modern-day arms race revolves around super-sized lithium-ion battery cell manufacturing facilities and the mineral supply chains to support them.
Any successful effort to “position America to be the global leader in the manufacture of electric vehicles and their input materials,” as Biden has stated, cannot be based on a dependency on the United States’ most serious competitor. Rather, the United States should understand that American efforts will be contested — even if they are intended to help the “global good” of reduced carbon emissions. It is highly unlikely that Beijing, which has been working for years to “seize the commanding heights” in critical technologies such as batteries, will easily watch as its advantages melt away. In the eyes of the Chinese Communist Party, the battery race means that China and the United States are locked in a battle over market share and access to scarce resources.
Chinese Foreign Ministry spokesman Zhao Lijian has already reminded U.S. leaders that U.S.-Chinese cooperation in specific areas is interrelated and subject to the overall U.S.-Chinese relationship. Maintaining dominance in battery production — particularly as the world increasingly relies on batteries — provides Beijing with valuable geopolitical leverage. While the Biden administration would like to compartmentalize climate change and geopolitics, the likelihood of China not doing so is high.
Moreover, as Biden seeks to build technology alliances with Europe and other allies to counter China, China’s efforts will constrain his leverage. With European electric vehicle manufacturers dependent upon China, it is hard to imagine that the Chinese Communist Party will not use these dependencies to ask for concessions in other domains.
To avoid a potentially debilitating dependence on China, then, the United States should treat clean energy technologies as a competitive space.
The Biden administration cannot afford to start from scratch and should build on the work of its predecessor. As it begins its new supply chain review, of which advanced batteries are one part, it should keep in mind the lessons of the Obama era battery initiative. In 2009, the Obama administration announced $2.4 billion in funding to produce next-generation hybrid electric vehicles and advanced battery components. One goal at the time, was to “end our addiction to foreign oil” through a plan that “positions American manufacturers on the cutting edge of innovation and solving our energy challenges.” As part of this, the Department of Energy offered up to $1.5 billion in grants to U.S.-based manufacturers to produce these batteries and their components. So what happened to these efforts and others like it over the past decade? Without setting forth what went right and what went wrong, it is hard to see how new initiatives can make progress.
How will Biden’s current efforts to use green technology to stimulate the economy differ from past failed efforts? Despite a string of incentives in the stimulus act in 2009, the solar supply chain largely moved to China after that country’s government invested heavily in the industry.
In addition to specifying lessons learned from past efforts, any future policy initiatives should take advantage of existing recent efforts. For example, Ellen Lord, the former undersecretary of defense for acquisition and sustainment, devoted significant time to identifying investment priorities, including the battery network. Since it takes five to seven years from the start of planning a battery-manufacturing plant and setting up a pilot production line to reach full operational capacity of a gigawatt factory that can produce several gigawatt-hours per year, the administration needs to concentrate some of its efforts on existing facilities, while encouraging new investments by U.S.- and foreign-owned suppliers.
The Biden team will also need to make choices, and fight for them internally. If the United States is to increase its processing of minerals for batteries in the United States, it will need to overcome the fact that such processing facilities are environmentally challenging. That tradeoff is worth it.
The new administration can make progress on its climate goals, but doing so will require a serious dose of climate realism, as well as a concomitant commitment to competitive policies to achieve U.S. independence from China in battery technology and manufacturing.
If President Joe Biden gets his way, the business of filing taxes in 2022 will be more complicated, more expensive, and more progressive than they’ve been in about 40 years.
Biden didn’t say much about taxes during the 2020 campaign besides his promise that those making less than $400,000 a year would not see their tax bill rise by “one thin dime.” The proposals he’s put forward as “payfors” for infrastructure, COVID relief, and other new spending programs are riddled with new taxes and hike existing levies to the point one can safely say the era of “tax and spend” has returned, in a punitive, almost vengeful way.
As the Committee to Unleash Prosperity observed Monday in its free daily Hotline, the top 5 percent of U.S. income earners pay half of all income taxes while the top 1 percent – the left’s favorite whipping post – pay more than 40 percent of the total tax intake. Meanwhile, as the chart below shows, the bottom half of income earners have an effective federal tax that’s close to zero – even when payroll and gasoline taxes are factored in. Quoting the Cato institute’s Chris Edward, “Joe Biden’s comments about the rich having low rates are clearly off base. The highest earners have tax rates twice the income of those in the middle and almost ten times the rates at the bottom.”
Biden’s plan to “soak the rich” is more about politics than economics. The numbers don’t add up and, if his tax cuts are enacted at the same time the United States is trying to emerge from a prolonged, lockdown induced recession, the results could be inflationary and job-killing rather than spark renewed growth in the economy as the 2017 Tax Cuts and Jobs Act did. Nonetheless, the Democrats are, as a party, committed to TCJA’s repeal in its entirety and, in the process, violate Biden’s campaign pledge.
Republicans on the House Ways and means Committee said Monday that if Biden gets his way on TCJA, it will do families “real harm” even at the median income level. A family of four with a household income of $73,000 could expect to see its federal taxes increased by $2,000. A single parent with one child should plan to pay $1,300 more.
Additionally, the committee said, the child tax credit would be cut in half as would the standard deduction, millions of middle-class households would again have to pay the Affordable Care Act individual mandate tax, and the American corporate tax rate would once again become the highest in the industrialized world.
The policies of tax and spend reached their apex in the 1970s under Jimmy Carter. America literally can’t afford to go back. The inflation alone would have a potentially ruinous impact on government discretionary spending. No Democrat who claims to be a moderate could go along with Biden’s plan to undo any part of tax-cutting, job-creating law Congress passed in 2017 – especially given what the president has planned for phase two. The prudent force forward is to keep the rates where they are, reduce overall federal spending, and let the U.S. economy boom. There will be plenty of money later to do the things we’ve already put off doing over the last four years, economists say, once the country is flush again.
U.S. Customs and Border Protection apprehended or turned away more than 178,600 people at the U.S.-Mexico border last month, marking what continues to be a growing border crisis.
The last time monthly border apprehensions exceeded this total was in April 2001, the all-time record year for illegal immigration with more than 1.6 million arrests. Unlike now, Border Patrol custody numbers back then were trending downward from March 2001, with more than 220,000 arrests.
Of those illegal aliens taken into custody in April this year, more than 111,000 were single adults not seeking asylum and who were subject to expulsion under Title 42. More single adults have been apprehended so far this year than the total number of families that were apprehended in all of 2019 during the last border crisis.
The Biden administration repeatedly denies there’s a border crisis and often blames the influx on former President Donald Trump and normal seasonal surges, but in April last year, border officials caught just over 17,000 illegal aliens at the southern border, the same number of unaccompanied minors who crossed last month.
“Until this administration applies a consequence for coming here illegally, these numbers are going to remain at crisis levels,” former acting Secretary of Homeland Security Chad Wolf said in a statement. “Make no mistake: this is not just a humanitarian crisis on our border — it is a security crisis that is giving drug cartels and human smugglers a historic opportunity to expand their operations in the Western Hemisphere.”
While the average amount of time migrant children spent in custody fell from 115 hours in March to 28 hours in April, drug seizures keep climbing. Overall, Customs and Border Protection saw a 6 percent increase from March to April. Of those drugs being smuggled across the border by cartels, seizures of heroin increased 97 percent and seizures of fentanyl increased 34 percent, already passing the total numbers from the 2020 fiscal year. As noted by The Federalist’s John Daniel Davidson, the effects of these drugs extend far beyond the border crisis.
Experts estimate the volume of drugs confiscated at the border generally represents maybe 10 or 15 percent of total production. That amount of fentanyl — thousands of pounds — coming over the border has deadly consequences once it reaches U.S. cities and towns. Last year, a record number of Americans (some 90,000, possibly more) died of drug overdose. The increase in overdose deaths from 2019 to 2020, researchers say, was driven by synthetic opioids like fentanyl. Fatal fentanyl overdoses spiked during the pandemic last spring, claiming more than 6,000 lives in May 2020 alone, and as the year went on they never dropped back down to pre-pandemic levels.
As slogans go, “build back better – which Joe Biden used to define his 2020 bid for the presidency – lags well behind “Happy Days Are Here Again,” “Make American Great Again,” and “I Like Ike” in clarity and vision. It’s not even close to “It’s the economy, stupid,” the unofficial campaign mantra of Bill Clinton’s successful run in 1992.
What Biden’s been doing during his first one hundred suggests even he didn’t understand what he meant. If he planned to create millions of new jobs – good jobs at good wages with good benefits as the Democrats used to say – the April jobs report indicates he’s failing.
What’s gone unreported is that jobs that are coming back – and there are some – are coming back as lockdowns are ending. The economic downturn that appears now to be ending was not the product of an expected downturn in economic activity but the direct result of state-by-state lockdowns that forced businesses to curtail operations or close as part of an ill-conceived effort to slow the spread of the coronavirus.
To supplement lost income, the Pelosi-led Congress joined first with Donald Trump and then with Biden to put the nation on relief. It’s no wonder, therefore, that business leaders are complaining they can’t find people to fill the jobs they have available once the Washington politicians incentivized joblessness instead of work by extending and enhancing unemployment benefits. It should be obvious that when you pay people not to work, they won’t work but somehow the experts in D.C. missed this.
Biden and the Democrats are nevertheless still all in. They said their $1.9 trillion “American Rescue Plan” would save the economy. Instead, it looks like it’s dragging it back down while inflation, a monster the U.S. Federal Reserve was thought to have tamed, is once again rearing its ugly head. The price of goods and services on which the American people rely are increasing, suddenly and sharply, as the impact of trillions in new spending during the pandemic comes home to roost.
Now, according to the Washington Post and other outlets, the Democrats are having trouble building support for their latest $4 trillion tax and spend program. Moreover, Democratic Congressional Campaign Committee Chairman Sean Patrick Maloney, D-N.Y., is now warning the White House its planned tax hike “could hurt vulnerable House Democrats up for re-election in 2022.”
It’s an important message for Biden – who’s apparently sending it back marked “Return to Sender.” The president, it seems, remains intent on raising taxes on as many people, goods, and services as he can convince Congress to accept.
Biden’s initial proposal to take the corporate tax rate from 21 percent to 28 percent landed with such a resounding “thud” he was forced to offer up 25 percent as a compromise. Even so, that would still move the United States back into an uncompetitive position with the world’s other industrialized economies. What is being omitted thus far from the discussion is that, when state-corporate levies are added in, the average U.S. combined national and subnational tax rises to 25.77 percent.
At 25 percent, what Biden has now put on the table, the combined rate would be 29.5 percent, higher than what is levied by China and higher than the average rate for countries in the OECD.
Moreover, says Americans for Tax Reform, a non-partisan group opposed to tax increases, “Workers, consumers, and shareholders will bear the burden of an increased corporate tax rate. Such a hike will cause businesses to invest less in the United States and more overseas, resulting in fewer job opportunities and lower wages for American workers:”
According to ATR:
–A Treasury Department study estimated that “a country with a 1 percentage point lower tax rate than its competitors attracts 3 percent more capital.” This is because raising the corporate rate makes the United States a less attractive place to invest profits.
–A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages.
–A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003.
–Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor.
Biden’s insistence the corporate tax be raised, the cornerstone of his economic plan, will not create jobs, reduce debt, or bring increased revenues into the U.S. Treasury. It will however be a boon to almost every one of America’s competitors in the global marketplace.
For reasons seemingly inexplicable the May 2 10th anniversary of the successful U.S. raid on Osama bin Laden’s Pakistani hiding place passed almost without mention. Comments were made and the White House did issue a statement in the president’s name to mark the day but for the most part, it did not get the attention it deserved.
People have forgotten how devastated we were after a handful of terrorists working for bin Laden seized control of commercial airliners and flew them into Manhattan’s Twin Towers and the Pentagon, killing more than 3,000 Americans. As a nation, we vowed our dead would be avenged. A decade later, they were – and America justifiably rejoiced.
President Joe Biden’s observations on the anniversary were measured. “Ten years ago, I joined President Obama and members of our national security team, crowded into the Situation Room to watch as our military delivered long-awaited justice to Osama bin Laden,” he said. “It is a moment I will never forget—the intelligence professionals who had painstakingly tracked him down; the clarity and conviction of President Obama in making the call; the courage and skill of our team on the ground. It had been almost ten years since our nation was attacked on 9/11 and we went to war in Afghanistan, pursuing al Qaeda and its leaders.”
“We followed bin Laden to the gates of hell—and we got him. We kept the promise to all those who lost loved ones on 9/11: that we would never forget those we had lost, and that the United States will never waver in our commitment to prevent another attack on our homeland and to keep the American people safe.”
Indeed, and to give credit where credit is due, the successful assault on bin Laden’s compound was a military and political success for the Obama/Biden Administration. The president is right to be proud of his involvement in bringing it about – even if his recollection of what went on isn’t exactly spot on. You see, according to no less an authority than the former president himself, if Biden’s advice had been followed the raid on bin Laden might never have happened at all.
What the president neglects to say, what he has recrafted the narrative to obscure, is that he advised Barack Obama to wait to order the raid. “Joe weighed in against the raid,” Obama wrote in A Promised Land about the discussion of the mission the former chief executive eventually gave the green light.
“As had been true in every major decision I’d made as president,” Obama wrote, “I appreciated Joe’s willingness to buck the prevailing mood and ask tough questions, often in the interest of giving me the space I needed for my own internal deliberations.”
“Buck the prevailing mood”? It’s a damning description of the former vice president’s actions before the raid, even more so considering the “It was a win for the team” sentiments expressed in the official White House 10thanniversary statement.
This is not the first time Biden has been called to account for remembering things differently than others in the circle of influence advising the president on one of the most important acts he would take while in office. Not only that, but he was also – as National Review’s Dan McLaughlin has written – consistently wrong in his criticism of Bush-era efforts that led to bin Laden being found.
“One, the hard part was finding bin Laden, and we found him in large part due to Bush-era policies that Obama and the Democrats had criticized,” Mclaughlin wrote just before the anniversary. “And two, while Obama deserves the credit for making the decision to go ahead with the raid (after a fair amount of hemming and hawing), and most of Obama’s team went along with the decision, the historical record is quite clear that Joe Biden opposed it.”
It’s also quite clear that, if “WE” did follow bin Laden “to the gates of Hell” that Joe Biden was at the back of the pack. If he was even there at all. It sure looks like he is trying to claim credit for being one of the fathers – to borrow a word from Jack Kennedy — of an action he opposed. The president’s dissembling – something he does with disturbing regularity– deserves closer scrutiny. If we can’t trust him to be truthful about something that happened ten years ago, how can we trust him to be truthful about what he’s doing now?
Throughout the 2020 presidential campaign season, then-candidate Biden continually promised that he would not raise taxes on households making less than $400,000 per year. It was a promise echoed again by the White House just over a month ago, but the so-called American Jobs infrastructure plan rolled out by the administration pulls a bait-and-switch on the American people, particularly the working poor and ethnically diverse communities.
A key component of the Biden plan is the push for a nationwide transition to electric vehicles, which takes up some $174 billion in subsidies from the package, but one of the largest problems with the proposal is its disregard for the negative downwind effects it would have on those at the lower rungs of the economic ladder. As of 2019, the average cost of an electric vehicle was $55,600, far greater than the cost of other vehicles more affordable for lower income families. In fact, another recent study showed that the average income of electric car owners is at least $100,000 per year, well over even the middle-income line. While the Biden plan throws truckloads of money at other angles of the electric vehicle issue, it does nothing to address the fact that lower income households simply cannot afford electric vehicles. To make matters worse, electric vehicles only account for 2 percent of vehicle sales in the U.S., even though they have been an option for vehicle purchasers for a significant period of time. The Biden plan is catering to a niche segment of an industry, in a show of political nepotism for a pet campaign promise while slapping the American worker in the face in the process.
An aggressive plan like Biden’s calls for significant bumps in energy and electric grids. Even currently, with a transportation budget of $1.5 billion, electric companies have almost $1 billion more in requests for expansion, and this is the case notwithstanding the drastic increase in energy grids that the Biden plan would implement. More electric grids cost the utilities more to operate, meaning large spikes in utility costs.
California provides an example of this type of policy gone wrong, as it invests the most of any state into electric vehicle infrastructure yet has increasing issues with blackouts, high utility costs, and general cost-of-living increases. For instance, as of 2010, SDG&E, the major energy provider in the San Diego and southern California region, has seen consistent rate increases. Conversely, utility disconnections due to overdue bills and payments has also steadily climbed within this time period, suggesting that ratepayers are finding it more difficult to keep up with rising costs. Even more specifically, those burdened with these rate hikes are disproportionately minority groups in disadvantaged communities, who shoulder these costs for the benefit of disproportionately affluent areas that can afford EV’s.
Additionally, American seniors are keenly affected by these rate hikes. Per an AARP testimony in 2019 in Arizona, “twenty percent of Arizonans 65 and older rely on Social Security as their sole income source. Fifty percent get a substantial portion of their income from Social Security…[which] is about $17,500/year…Older Arizonans have much higher medical costs so many already [are forced] to choose today between, food, rent, medical care and very limited transportation…they cannot afford higher electric utility rates much less for electric vehicles.” Yet again, ratepayers are being conscripted to subsidize a service that they do not use, at the cost of their own well-being.
These specific examples are simply the tip of the iceberg. If the Biden E.V. plan is implemented, the consequences would be far more drastic than even the current rate hikes. If less fortunate groups are not benefiting from electric vehicles, why should they be forced to pay for them? Spiked electric utilities affect the poor and vulnerable more negatively than any other economic demographic. Utilities are a difficult commodity to live without, particularly within a family, and they should not be burdened with rate hikes for services they do not use. Simply put, lower income households are not driving electric vehicles, and the Biden plan not only gives them no incentive or ability to do so but punishes them for costs incurred by wealthier households, all while claiming victory because rate hikes caused by government action aren’t technically a tax. Tax or not, the cost to the American people is the same. The ploy is a cruel bait-and-switch tactic that misleads the American people and should raise red flags about the Biden administration’s friendliness to the American worker.
Presidents who misremember history are doomed to repeat it
President Biden’s address to a joint session of Congress underscored this administration’s left turn. The speech was a laundry list of progressive priorities in domestic, foreign, and social policy with a price tag, when you add in the American Rescue Plan, of some $6 trillion. Biden’s delivery, heavy with improvisation, only slightly enlivened a prosaic and unoriginal text. Biden repeated lines from both Bill “the power of our example” Clinton and Barack “the arc of the moral universe” Obama. But it wasn’t just the words themselves that made me think of Biden’s most recent Democratic predecessors. The scope of his plans, increasing government’s role in just about every aspect of American life, also brought to mind the Democrats who tried to govern as liberals after campaigning as moderates.
I’m old enough to recall the last president who vanquished Reaganism. Obama spoke of “fundamentally transforming the United States of America,” and came to Washington in 2009 with the aim of changing the trajectory of the country just as Ronald Reagan had done three decades earlier. Shortly before his one hundredth day in office, he delivered a speech at Georgetown University where he promised to lay a “new foundation” for the country. His friends in the media hailed him as the second coming of Franklin Delano Roosevelt. “Barack Obama is bringing back the era of big government,” historian Matthew Dallek and journalist Samuel Loewenberg announced in the New York Daily News.
We know how that turned out. The GOP captured the House in 2010. By the time Obama left office, Republicans had full control of Washington and were dominant in the states. Reaganism survived. And now, 12 years later, the cycle is repeating. This time it’s President Biden who is likened to FDR. It’s Biden who is said to have interred the idea of limited government. It’s Biden who is marking his first 100 days in office with plans to spend trillions on infrastructure, green energy, health care, and elder and child care. The political setbacks of the Obama years didn’t temper Biden’s ambitions. They intensified his desire to leverage narrow congressional majorities into sweeping expansions of the welfare state.
Why does Biden think he can avoid Obama’s fate? Like a good lawyer, he has a theory of the case. It goes like this: Neither Bill Clinton nor Barack Obama spent enough money to ensure a strong economic recovery. They didn’t emphasize jobs above all else. Their caution was responsible for Democratic losses in the midterm elections. And all it takes is GOP control of one chamber of Congress to spoil a liberal revival. By opening the floodgates of federal spending, Biden hopes to deepen and extend the post-coronavirus economic boom. Growth and full employment will prevent a Republican takeover. And a second Progressive Era will begin.
The problem with this theory is its selective misreading of history. It wasn’t just the economy that sank the Democrats in 1994 and 2010. It was independent voters who turned against presidents who campaigned as moderates but governed as liberals. Nor did rising unemployment stop Republicans from picking up seats in 2002. And an economic boom didn’t save the House GOP in 2018. In every case, assessments of the president—among independent voters in particular—mattered more than dollars and cents. By committing himself to the idea that massive spending will safeguard the Democratic Congress, Biden may be inadvertently guaranteeing the partisan overreach that has doomed past majorities.
Biden doesn’t give enough credit to the record of his Democratic predecessors. The unemployment rate was 7.3 percent in January 1993 when Bill Clinton was inaugurated. By November 1994, it had fallen to 5.6 percent. Meanwhile, the economy grew by 4 percent in the third quarter of 1994. Nevertheless, the Republicans won control of the House for the first time in 40 years and the Senate for the first time in 8 years. Why? Because Republicans won independents 56 percent to 44 percent. Voters who had backed Ross Perot in 1992 swung to the GOP. Voters’ top priority in the exit poll wasn’t jobs. It was crime. And the failure of Clinton’s unpopular health plan didn’t help.
The 2010 midterm had similar results. The economy, while nothing to brag about, was nonetheless improving. Unemployment had been falling since October 2009. Growth, though anemic, had also returned. Republicans gained 63 seats in the House and 6 in the Senate because independents rejected President Obama’s governance. They backed Republicans 56 percent to 37 percent—an 8-point swing against a president they had supported in 2008. Why? Part of the reason was the economy. But the Affordable Care Act was also significant. Health care was voters’ second priority in the exit poll. A 48 percent plurality called for Obamacare’s repeal.
Biden’s theory also omits the contrary examples of recent Republican presidents. In November 2002 the unemployment rate was higher, and growth lower, than in November 2000. But the GOP had a good year anyway thanks to President Bush’s high post-9/11 approval ratings and a tough but effective campaign on national security.
The 2018 midterm is further proof that campaign results are not a direct function of economic performance. Democrats won control of the House despite full employment and sustained growth. Independents, who had narrowly backed President Trump in 2016, turned against him and voted for Democratic candidates by a 12-point margin. No mystery why: A 38-percent plurality of voters said they were voting to oppose Trump, whose strong disapproval rating was at an incredible 46 percent in the exit poll. Health care ranked as the top issue, with voters recoiling at the prospect of an Obamacare replacement that failed to cover preexisting conditions.
Not only do the data show that the economy is less important to the midterms than many assume, they are also a reminder that the first hundred days do not define a presidency. The fate of a president and his party depends more on his ability to maintain popularity and on his performance during unanticipated crises. While Biden’s approval ratings continue to be positive and his disapproval low, there are some warning signs: His approval among independents ranges between the mid- to high-50s, and a majority of voters disapproves of his handling of migration along the southern border. Focused on his grand plans for the economy, Biden might dismiss voter concerns over immigration, crime, and inflation until it is too late.
Sure, Biden might avoid making Barack Obama’s mistakes. But he has plenty of time to make mistakes of his own.