When the incoming Obama administration was looking to put together a stimulus package during the financial crisis a decade ago, the optimal size of the proposal was the subject of considerable debate: Should it be $600 billion? $850 billion? $1.2 trillion? $1.8 trillion?
A trillion-dollar price tag was seen as impossible politically and some Republicans and Democrats in Congress insisted that the cost couldn’t top $800 billion. Congress was “a big constraint,” David Axelrod, a senior Obama adviser, later said. “If we asked for $1.2 trillion, it probably would have created such a case of sticker shock that the system would have locked up there.”
In the end, the 2009 American Recovery and Reinvestment Act totaled $787 billion — a figure that some critics, especially on the left, still contend was far too small, despite the fierce political pushback that any larger package faced.
We’re bringing up that not-too-distant past to note just how much things have changed over the last 10 years. As Time’s Ryan Teague Beckwith points out, “as Democratic contenders gear up for the 2020 primary, they no longer seem afraid of the trillion-dollar price tag.” Democratic candidates have proposed trillion-dollar plans — or multi-trillion-dollar plans — for infrastructure, college tuition and debt, taxes, climate change and health care.
“There was a sense that keeping it below a trillion was a political reality,” Jared Bernstein, who was chief economic adviser to Vice President Joe Biden, told Time. “We can argue about whether that was right or wrong, but it certainly wouldn’t be the case right now.”
Inflation may play a part in that, perhaps making a trillion dollars a less daunting figure than it once was. But the size of some of the country’s problems certainly plays a role as well — and Trumpian politics have also transformed the debate. As a candidate in 2016, Trump talked up the need for a trillion-dollar infrastructure plan. As president, he signed the GOP’s deficit-raising $1.5 trillion tax cuts in 2017.
Teague Beckwith outlines three ways the Trump tax cuts in particular opened the door to other trillion-dollar proposals:
- They took some of the bite out of the trillion-dollar figure, making that sum seem reasonable for ambitious presidential proposals.
- They made it easier for Democrats to pay for their big ideas by calling for the unpopular tax cuts for the wealthy to be reversed.
- They undercut fiscal conservatives’ previous warnings about increasing deficits, exposing the party to criticism for hypocrisy and leaving many on the left arguing that if self-proclaimed budget hawks don’t really care about the deficit when pursuing their agenda, maybe Democrats should do the same.
Jesse Lee, a spokesman for the liberal Center for American Progress Action Fund, tells Teague Beckwith that Trump “defanged the Republican Party’s scolding about government spending and deficits,” adding that, “There is nothing that Democrats are proposing that would be remotely in line with the amount of added deficits [from the Trump tax cuts] compared to the minuscule amount of benefits.”