An Industrial Policy With U.S. Characteristics

Biden’s $4 trillion Build Back Better plan faces plenty of hurdles beyond Republicans

- Shawn Donnan, with Jenny Leonard

President Biden and his economic team are about to test whether Americans can accept a more interventionist role for government in the economy. Now that his $1.9 trillion Covid rescue plan has cleared Congress, Biden is gearing up to roll out a “Build Back Better” plan that envisions spending at least $4 trillion over 10 years on infrastructure and strategic industries such as semiconductors, renewable energy, and electric vehicles. He promises that government action will not just generate millions of jobs and help the U.S. compete with China but also reduce inequality and help battle climate change.

The timing for a new, muscular U.S. industrial policy might never be better. The pandemic and anxieties over the perceived growing threat from China have focused minds in Washington, fostering a rare bipartisan consensus on the need for measures to secure supply chains for semiconductors and other strategic goods such as surgical masks.

Biden and his allies in Congress want to rewrite an economic narrative that has seen U.S. manufacturing employment slide since 1979 even as industrial output has continued to grow. “I don’t accept the defeatist view that the forces of automation and globalization can keep union jobs from growing here in America,” the president told reporters a few days after taking office in January. “We can create more of them.”