By James Erwin
President Biden’s team were eager to popularize “Bidenomics” when they saw marginal improvements in inflation, but it is more likely the term will become a by-word for politicized slush funds.
There will be manifold retrospectives on the Biden Administration in due course. Most of these will focus on vibes – what he represented, how he embodied the politics or culture of our moment, what precedents he may have set for the presidency. The more serious appraisals will focus on the boring but impactful legacy his legislative and administrative accomplishments and decisions.
Let this serve as an early retrospective on one of Biden’s enduring policy legacies, one that may reverberate for a generation: politicized subsidies to favored constituencies.
The outgoing president fancied himself something of a bipartisan dealmaker, which was certainly true in his half-century of service in the United States Senate. His administration’s treatment of large sums of money authorized by bipartisan legislation, however, will poison the well on major packages for the foreseeable future.
Take the BEAD program. Authorized by the infrastructure package Biden was so eager to champion, it was the result of hard-fought compromises between Senate Democrats and Republicans. Neither side got everything they wanted in the final bill – Republicans were unable to keep government-owned broadband networks (GONs) out of the block grant program and Democrats were unable to get the price fixing they wanted for internet service.
As soon as the compromise was signed into law, Biden’s bureaucratic underlings immediately set to work imposing the very requirements through the executive branch that Democrats had failed to carry in a vote by the elected representatives of the people. In administering the program, NTIA required that states give priority GONs, favoritism for union labor, and a national scheme of price controls known as “rate regulation” despite falling broadband prices.
A program meant to build out broadband connections to the last unserved Americans turned into a slush fund for Biden’s union allies and socialists attempting to set up taxpayer-funded broadband networks. In this reckless drive to reward their political allies, the Biden Administration seemed to care little that the negotiators had recognized that these policies simply would not work for many states.
During negotiations, some Republicans from the South noted that they don’t really have many union workers, so giving the few small companies who did right of first refusal would keep the most experienced, efficient, and well-paid workers off of projects funded by the BEAD program. Many states have their own laws governing GONs to ensure they don’t go bankrupt and cost taxpayers undue sums, which NTIA regulations cannot preempt since they are not laws. All they can do is make it more complicated for private sector ISPs making bids who have to compete with GONs that are favored by federal bureaucrats but constrained by state laws. It didn’t matter that the private ISPs were already in a position to build the networks – the GONs were getting the first bite at the apple under Biden.
There is still hope for the BEAD program since each state can design their own approach to best fit their needs, even as NTIA has made it much more difficult for them to do so. For now, the cumbersome review process has resulted in zero homes connected after three years. We shall see if this can be turned around when building starts in earnest next year.
The CHIPS Act, which the more serious of Biden’s defenders will cite as his greatest accomplishment, has followed a similar story. Again, a bipartisan group of Senators negotiated the package that underwent a rigorous amendment process on the floor. Again, provisions considered and rejected by Congress were either added or wildly exaggerated by the administration once the law was in effect.
The Commerce Department has imposed layers of left-wing demands on chipmakers applying for subsidies, many of which are foreign companies like TSMC that succeeded abroad precisely because they did not have to comply with industrial-era U.S. labor law. Preferences for union labor and micromanagement of working hours (again, the entire competitive advantage of the industry depends on workers’ willingness to keep fabs running 24/7) were followed by demands to use unreliable wind and solar power and even diktats about what childcare offerings the recipients of subsidies needed to have on hand.
As a result, promised projects have been abandoned. Some will continue to forge ahead, but many of these plants could have been built already if regulatory incentives were offered instead of onerous strings attached to taxpayer-funded bribes.
Biden will sure claim that Bidenomics, his legacy, was investing in our technology infrastructure to win the future. A sober assessment of the programs and their results show that Bidenomics is little more than rewarding one’s allies by ignoring Congressional intent. Republicans amay be fare less willing to partner on bipartisan legislation like this the next time a Democrat occupies the White House. This, more than anything else, may be
The post From CHIPS to BEAD, Biden’s politics infected federal spending appeared first on Digital Liberty.