At this writing, the national popular vote will likely support Joe Biden. The electoral vote is what matters, of course, and the possibilities resemble a Rubik’s Cube. Again, the pundits expect a Biden win, although ghosts of 2016 were abroad on Halloween.
Have you voted? If it is still Nov. 3 and you haven’t, the polls don’t close until 9 p.m.
Let’s go with that assumption, however, and explore the implications of a Biden win for our region. Many of these initiatives will be influenced by the outcome in the Senate and the leadership’s decision to retain or scrap the filibuster for ordinary legislation. The filibuster was already eliminated for judicial appointments, including the Supreme Court.
Support for state and local governments
Washington gridlock blocked release of CARES Act: The Sequel. That’s not surprising. Swift passage of the original CARES Act in March was a political miracle given the level of animosity and the significance of the election.
With the election settled (we hope), Congress and a Biden White House are more likely to come to agreement on an injection of cash for state and local governments (although a re-elected President Trump could change his mind).
Gov. Andrew Cuomo has been withholding state aid from many local governments pending some resolution of federal aid. The full-year impact of the current withhold on the Rochester City School District is estimated to be $128 million. The state threatens to make the cuts permanent if federal aid isn’t forthcoming. Twenty percent of planned state school aid for all Monroe County schools would be $125 million.
Municipal aid is also at risk. In June, New York withheld $17.5 million from the city of Rochester against its fiscal year 2020 allocation. Statewide, the Division of the Budget reports $2.4 billion in state aid withheld as of Sept. 30.
Support for infrastructure
Despite lip service from all sides, the nation’s infrastructure continues to deteriorate. The confluence of COVID-driven unemployment and continued low interest rates will offer the new administration an opportunity to make these investments. Unlike, say, the rail network through the Chicago area or the rail tunnels connecting New York City to the mainland, Rochester’s infrastructure problems are manageable. That said, a major new infrastructure effort would help address the 8.7 percent of the bridges deemed deficient in Monroe County (Congressional District 25) by the American Road and Transportation Builders Association (an entirely disinterested source, to be sure!).
Several of our major bridges are quite old. The I-490 bridge over the canalway was built in 1955 and carries 65,000 cars each day. Along with some of our community’s aspirational projects (e.g. the planned-but-not-funded ROC the Riverway projects), prudent attention paid to infrastructure would spur local employment and improve the economy long term.
Support for business
Republican policy has a bias for tax cuts. By contrast, the Biden plan has a bias for what economists call “industrial policy,” programs that focus incentives on specific industries and initiatives. Biden’s “build back better” strategy places a particular emphasis on manufacturing. Given Rochester’s historical strength in manufacturing, our region is well-positioned to take advantage of this kind of specific support.
The success of these initiatives is decidedly mixed, however. The Pataki-era Infotonics Center and the more-recent Syracuse Film Hub were clear failures. The AIM Photonics initiative, one of the federal Manufacturing USA Institutes, is still in business, but job creation falls far short of the transformational hype at inception and the initiative is still deeply dependent on public-sector funding.
I don’t share Biden’s (or Trump’s) enthusiasm for “Buy American” or “Ship American.” I fear the bureaucracy required to enforce such provisions and the inefficiency engendered as firms manipulate the rules to qualify. These run afoul of Emmanuel Kant’s Categorial Imperative (which is effectively the Golden Rule in philosopher’s robes): “Act only according to that maxim by which you can at the same time will that it should become a universal law.” While a tougher trade policy with China was overdue, we should use our market power to enforce fair trade, not continue the war initiated by the Trump Administration’s “America First” obsession.
Yes, the pandemic has revealed the vulnerability of our supply chain for critical components. An emphasis on “reshoring” would benefit Rochester manufacturing expertise, as the pending loan to Kodak’s pharmaceutical venture (negotiated under the Trump administration, of course) demonstrates. While securing a supply chain is sound in theory, such programs are open season for lobbyists. Nearly every product and service sold in America can suddenly acquire “national security” priority.
Our nation’s anti-poverty programs are wildly inconsistent and often ineffective. Rochester’s sad status as one of the nation’s cities with the largest share of persons and children in poverty has been documented routinely by ACT Rochester. Among the nation’s largest 150 cities, Rochester ranked seventh in total poverty and ninth in child poverty in 2019.
A centerpiece of Biden’s anti-poverty efforts is a set of reforms aimed at the Housing Choice Program, best known as Section 8, a program established in 1974. The largest housing assistance program in the federal toolbox, 2.2 million Americans use these vouchers to rent apartments in the private market. Another 1.2 million use vouchers in housing developments that have contracted with the government.
Yet program funding falls short if we intend to provide the benefit to all who are eligible. These vouchers are not an entitlement, something the Biden-Harris campaign wants to change. Vouchers are made available on a city-by-city basis to qualifying families—but only until the money runs out. As demand exceeds supply by a significant margin, securing a Section 8 voucher literally depends on “winning the lottery.”
The Rochester Housing Authority reports that the number of housing vouchers in use through RHA tops 9,000. As the number of eligible participants is vastly greater than the number of vouchers freed up in a given year, demand is managed by periodically creating a waiting list from among applicants. Currently, the lottery is held about every three years, most recently in December. Tens of thousands applied; the lottery selected and ranked applicants, adding 3,000 to the waiting list. If you missed the cut, it could be another three years before you can enter the lottery again.
Converting the Housing Choice Program to an entitlement, thus granting the benefit to anyone who qualifies, is predicted to have significant benefits for families and communities. But it would be fabulously expensive.
The Biden-Harris campaign has also discussed a range of additional programs targeting people in poverty, including an increase in the federal minimum wage, an increase in the Child Tax Credit and reforms to the Earned Income Tax Credit. The EITC was claimed by 51,248 tax filers in Monroe County in 2018, which is 7 percent of the population and 48 percent of persons in poverty. Among New York’s largest counties, the population share ranges from 5 percent on Long Island to 13 percent in the Bronx. The number of EITC claimants as a share of the number of persons in poverty ranges from 38 percent in Manhattan to 80 percent in Nassau County.
Improving access to health care is also high on the Biden agenda. The Affordable Care Act addressed some inequities and created others. This is another Rubik’s Cube that will defy easy solution.
How to pay for the Biden programs
The candidate has vowed to leave taxes unchanged for families earning less than $400,000 a year. What this would mean for tax rates and whether it is political feasible depends on the specific programs passed and how they are designed.
In Monroe County, about 4,600 residents reported taxable income of $400,000 or more in 2017, a total of $4.1 billion in total. Just over 1 percent of taxpayers, their incomes sum to 20 percent of the county total. In the state as a whole, 2.4 percent of tax filers earned $400,000 or more in 2017, reporting total taxable income of $311 billion, 41 percent of the state total.
If Biden and Harris win and the Democratic Party takes over the U.S. Senate, the policy proposals will be fast and furious. The list of needs and demands is infinite. Moreover, COVID-19 isn’t finished with us yet.
Oh, did I forget to mention climate change?
Kent Gardner is Rochester Beacon opinion editor.