WE AGREE WITH Jacob Hacker and Paul Pierson that there has been a leftward shift in the economic policy priorities of the Democratic Party. But their account of why it has happened is woefully inadequate.
The best evidence of a leftward shift can be found in a bill Hacker and Pierson ignore: the $1.9 trillion American Rescue Plan Act, passed in March 2021 with zero Republican votes. Despite deficit scolds like Larry Summers sounding the alarm, Biden and his team decided to pump an enormous amount of purchasing power into the economy, calculating that inflation risks were less of a political or economic threat than the risk that insufficient demand would lead to prolonged unemployment. This commitment to “running the economy hot”—matched by Biden’s unprecedented support for organized labor (including his installation of the most pro-labor National Labor Relations Board in decades and his open championing of striking autoworkers)—represents a profound break from the austerity-driven agenda of Democrats since the ascendancy of Robert Rubin.
It’s not clear that this break is uniformly at odds with the Democrats’ suburban affluent base. In fact, several of the biggest planks in the American Families Plan would have benefited not only poor and working-class voters but also relatively affluent voters, especially working parents. Persuaded by the arguments of political scientists—Hacker and Pierson among them—that narrowly means-tested programs do not create the constituencies necessary to sustain themselves, Democrats have pushed for programs like paid family and medical leave, universal pre-K, and a significantly expanded child tax credit. All these programs would have provided significant financial support to families with incomes extending to several hundred thousand dollars per year (while at the same time not raising their taxes, as Hacker and Pierson note).