U.S. President Joe Biden walks toward reporters on his way to Marine One on the South Lawn of the White House on Tuesday, Feb. 16, 2021, in Washington, D.C..

U.S. President Joe Biden walks toward reporters on his way to Marine One on the South Lawn of the White House on Tuesday, Feb. 16, 2021, in Washington, D.C. (Drew Angerer/Getty Images/TNS)

WASHINGTON — When Jared Bernstein worked as chief economist for then-Vice President Joe Biden during the slow recovery from the financial crisis, White House discussions would often revolve around taming the fiscal deficit.

It was “exactly the wrong economic issue” to be focused on, Bernstein said in January 2012, less than a year after he left President Barack Obama’s administration. The political backdrop of the time made it tough “to explain to the public we have to spend more now and spend less later,” he said in a PBS “Frontline” interview.

Nine years later, Bernstein’s back in the White House, serving on now-President Biden’s Council of Economic Advisers. This time, the debate is entirely different. Bernstein’s prescription of powerful, sustained spending to lift prospects for the economy’s marginalized communities is shared across the administration.

The progressive policy focus is a surprise to some liberals, after Biden ran a centrist campaign, beating back calls for "Medicare for All" and the Green New Deal. The turnaround showcases how far the center of the Democratic Party has shifted left, and has some analysts thinking economic growth will prove even stronger than if COVID-19 hadn’t happened.

“It really does feel like a systemic change,” said Thea Lee, president of the Economic Policy Institute where Bernstein once worked. “Before, it was all about the deficit, deficit, deficit — and anyone who did not agree was sidelined. Now, it is almost the flip side,” she said.

The first indication of the new approach came with Biden’s $1.9 trillion pandemic relief package — a size that dwarfed most estimates on Wall Street. Faced with calls from Republicans to scale it down, the president has instead endorsed pursuing a Democrat-only bill in Congress that delivers on his demand.

The administration has also dismissed concerns the aid package — which is on par with the Cares Act passed during the darkest, early days of the COVID-19 crisis — would stoke inflation. Officials have specifically rejected the argument made by Bernstein’s fellow Obama-team veteran, Larry Summers, who served as National Economic Council director.

Summers’ contention is the pandemic relief bill could leave insufficient fiscal and political space for a public investment program that provides job growth over the longer term.

Many Biden aides wished Summers had first discussed the substance of his points with them, according to three people familiar with the internal discussions. Aides were annoyed Summers presumed they hadn’t studied the potential for inflation, or the political risk of pushing through a large package if it crowded out other key priorities.

Biden is planning a second, “recovery” initiative to be unveiled in coming weeks as a follow-on to the “relief” bill Democratic congressional leaders aim to complete by mid-March. Evercore ISI analysts have penciled in $2 trillion over a decade for that infrastructure-focused plan.

The way the White House distanced itself from Summers at both the briefing-room podium and in private conversations demonstrates the extent to which this administration has moved past the economic thinking dominant in the past two Democratic ones.

While the double dose of outsize fiscal spending, along with individual components such as a minimum-wage hike, have delighted left-flank Democrats, it does contain political risks. If the administration cannot in due course contain the pandemic’s impact or the economic downturn, costs could come in next year’s midterm elections.

The administration points to polls showing a majority of Americans support the relief package — but things could change, said John Podesta, who served as counselor to Obama and chief of staff to President Bill Clinton.

“It’s not just about selling it to Congress, but selling it to the public,” Podesta said. “They have to make sure the public understands what they delivered, why and why it was good for the economy.”

Obama came in with his own aggressive agenda, pushing through the Affordable Care Act along with a bailout for the automobile industry and a then-record $787 billion fiscal package. His party then lost its House majority in the 2010 mid-terms to Republicans who said he had over-reached.

The lesson Democrats now draw is that the slow recovery and continued high employment in retrospect argued for more powerful stimulus. But it was a tough case to make against the backdrop of a European debt crisis that fed a narrative of fiscal discipline being key to business and investor confidence.

Douglas Holtz-Eakin, president of the right-leaning think tank American Action Forum, said Biden’s adoption of progressive ideas reflects his relative lack of background on social or economic issues. Biden put more focus on foreign policy and judicial matters during his 36-year Senate career.

“He has no strong track record on domestic policy, so he is easily pulled left,” Holtz-Eakin contended.

The White House takes issue with that characterization, with a spokesperson saying Biden has been consistent with the pledges he made on the campaign trail of empowering workers, investing in U.S. competitiveness and industrial strength and ensuring all Americans have an equal chance to get ahead.

Meantime, some of the political ground might have changed amid the pandemic, giving the administration encouragement to pursue an expansive agenda.

While Republicans haven’t supported the Biden aid package, a group of 10 senators did float a $618 billion proposal, just weeks after voting for the $900 billion relief bill enacted in December.

And Biden’s idea of bolstering the child tax credit, included in his COVID-19 plan, has been endorsed by Senator Mitt Romney, a Utah Republican, who released his own proposal.

The White House’s proposed credit exemplifies moves that have earned accolades among liberals. It would open up help for 27 million children whose families didn’t earn enough money to qualify for the benefit previously, according to Center for Budget and Policy Priorities estimates. That includes coverage for roughly half of all Black and Latino kids, the group said.

Progressive values have permeated Biden’s personnel decisions, too. The administration has hired policy experts from Senator Elizabeth Warren’s office and liberal groups such as the Roosevelt Institute, Economic Policy Institute and Center on Budget and Policy Priorities — a contrast with the think tanks such as the Committee for a Responsible Federal Budget that previously held more sway.

“Many of us were concerned he would be overly cautious, but he put out there an aggressive and ambitious agenda, and he has defended it well,” said Dean Baker, a senior economist at the left-leaning Center for Economic and Policy Research. “I underestimated him in terms of the politics of winning and then pushing an aggressive agenda.

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