It's entirely possible that President Biden could lose the election because of inflation. Inflation isn't the only issue, but it's one that voters continue to focus on. Biden supporters are quick to point out that the president is being falsely blamed for inflation, which is largely due to supply chain disruptions caused by the pandemic. Wages have risen faster than prices since the pandemic. That's true. But the psychological toll of inflation has proven to be far more memorable than a pay raise.
What can Biden do about this? His best response has been to leave inflation to the Federal Reserve, something he doesn't get much credit for. Biden has also successfully touted the elimination of junk bond fees and the imposition of a $35 per month cap on insulin prices for Medicare beneficiaries. (The insulin cap was a big win, and Biden's opponents are falsely trying to claim the credit for it.)
Biden's most effective approach to fighting inflation so far has been to blame corporate greed: In 2022, when many shoppers were willing to pay whatever price they wanted, evidence shows that companies raised prices with little resistance (now retailers are being forced to lower them).
But I can’t help but wonder how much more powerful an inflation defence his policies would have been today if they had been implemented by Biden’s “care economy” policies.
Follow this authorHeather Long's opinion
Remember the Care Economy plan? Biden pledged to do so in 2020 and included it in his Build Back Better package. The plan was supposed to be a massive investment in affordable child care, free preschool for all 3- and 4-year-olds nationwide, and more in-home care aides for the elderly. These efforts would have affected tens of millions of families and tangibly reduced costs for families. But they weren't going to be cheap.
In 2022, Biden had to choose: Should he invest in reviving American manufacturing and combating climate change — “the man thing,” as one administration staffer told me — or was it time to transform the care economy — “the woman thing?” Everything the president wanted to do would cost about $5 trillion, too expensive to pass the Senate. In the end, Biden and Senate Democrats chose infrastructure, semiconductors, and clean energy.
That may have been a bad choice, and Biden may make the same mistake again this year by not campaigning on his plan to address the food economy. Lowering child care costs should be a prominent message.
Industrial policies take years, even decades, to produce significant benefits, and Biden's investments have certainly spurred a manufacturing investment boom visible in places like Phoenix and Columbus, Ohio. But the national impact has so far been modest in an economy of 168 million workers.
Meanwhile, since the pandemic, the child care crisis in the U.S. has been obvious to everyone. When schools and daycares are closed, parents can't work. The need for action was clear. Young children would benefit from quality child care and preschool programs. And parents, especially mothers, can join the workforce. It's a proven model. Other countries that have invested heavily in child care, such as Japan and Canada, have seen a large increase in the number of women in the workforce.
But Biden didn't invest in the care economy. Many blame West Virginia Democratic Sen. Joe Manchin III, who, along with Arizona Sen. Kyrsten Sinema (Independent), pushed for cost cuts in the final bill. The for-profit child care industry also likely played a role by lobbying against some aspects.
“We were very hurt when it was cut on the editing room floor,” said Jennifer M. Harris, a former National Economic Council staffer.
Some argue that the country may not need investments in the care economy. After all, women are returning to work. Labor force participation rates for women ages 25 to 54 are at an all-time high. But dig a little deeper and the picture is not so rosy. The significant return of women to the workforce has been driven almost entirely by immigrants and college-educated women. The number of women who report being forced to reduce their hours or work part-time due to child care issues is much higher than in the past. According to Federal Reserve data, parents with children at home report a steep decline in their economic well-being since 2021. Moreover, the cost of child care and preschool education has risen nearly twice the rate of inflation since 1991, and more than half of Americans live in “child care deserts,” where it is difficult or impossible to find a licensed child care center with openings nearby. A new KPMG report calls the lack of access to child care in the United States a “headwind to economic growth.”
There's no telling how much the economy or the polls would have improved had the Care Economy package passed, but voters want relief from budget-sapping costs. The president can't do much about gas or grocery prices, but he could help with child care, preschool and elderly care.
