Biden Tries to Hit Reset on Domestic Agenda in State of the Union

President Biden, struggling with low approval ratings after a difficult first year marked by skyrocketing inflation and now Russia’s ongoing invasion of Ukraine, sought in his first State of the Union address to resurrect a domestic policy agenda that would send billions more in federal funding out into states for liberal priorities.

Biden also announced other initiatives that will have implications for states. He said that he will crack down on the identity fraud that has led to states making tens of billions of dollars in improper unemployment payments, bringing charges from Republicans that he has been sweeping the problem “under the rug.”

Though the president  refrained from mentioning the Build Back Better bill that has stalled in Congress, he called for the passage of a number of elements of his social welfare agenda, including lowering child care costs for families.

Biden’s proposals still face an uphill battle passing the Senate, where moderate Democrats, like Sen. Joe Manchin of West Virginia, worry a substantial new wave of federal spending will cost too much and worsen inflation—a charge Republicans have repeated.

Still, his proposals will likely please Democratic governors who told Route Fifty in January they were hoping Biden would resurrect at least parts of the Build Back Better proposal.

The speech brought praise from Richmond, Virginia Mayor Levar Stoney, president of the Democratic Mayors Association. Stoney said the vision Biden expressed “will lead to lower costs for working families, better-paying jobs, stronger supply chains, safer and healthier communities, a cleaner environment, and so much more.”

Biden’s speech came as his domestic agenda is overshadowed by the crisis in Ukraine. It also comes as his approval ratings have plummeted in part after inflation rose by an annual rate of 7.5% in January. 

Republican lawmakers have blamed Democratic spending, including the sweeping pandemic aid in the $1.9 trillion American Rescue Plan, for causing the sharpest jump in prices since the 1980s.

Against that backdrop, Biden is trying to recast his proposals, saying in his speech they would lower prices when “too many families are struggling to keep up with the bills" and as "inflation is robbing them of the gains they might otherwise feel.” 

“My plan to fight inflation will lower your costs and lower the deficit,” he told the nation.

Iowa Gov. Kim Reynolds delivered the Republican response to Biden’s speech, criticizing the president on multiple fronts, saying his policies had contributed to rising inflation and undermined the nation’s energy production. She also made a case that Biden had failed to adequately tackle problems related to issues like immigration and public safety.

“The president and Democrats in Congress have spent the last year either ignoring the issues facing Americans, or making them worse," Reynolds said.

Reynolds touted the less strict approach many Republican state leaders took responding to Covid-19, favoring individual freedoms over public health measures like business restrictions and school closures. 

She noted her party’s embrace of low taxes—including tax cuts she signed into law on Tuesday—and the GOP’s tougher approach on border security. 

Reynolds also seized on controversies involving parents who've felt they don’t have enough say over issues in schools, such as mask mandates and how topics related to race are taught. Republicans have tried to gain political traction on these tensions heading into this year's elections, generally taking the stance that governments are trying to usurp too much power from parents over their kids' education.

Biden, among other things, resurrected the idea of the federal government lowering child care costs for families.

“Many families pay up to $14,000 a year for child care per child,” he said. “Middle-class and working families shouldn’t have to pay more than 7% of their income for care of young children."

“My plan will cut the cost in half for most families and help parents, including millions of women, who left the workforce during the pandemic because they couldn’t afford child care, to be able to get back to work,” he said. 

Under the Build Back Better proposal, states would have received $100 billion over three years to lower child care costs, improve the quality of the care and raise wages for their workers. States would have been responsible for picking up 10% of the cost for child care assistance after the three years with the federal government paying the rest.

Colorado Gov. Jared Polis, a Democrat, said in an interview earlier this year that early childhood programs in the package are crucial for kids. “It's also important for our workforce and for our families,” he said.

Biden emphasized that his plans also call for more affordable housing and pre-K "for every 3- and 4-year-old." 

His Pre-K proposal in the Build Back Better bill would gradually shift about 40% of costs to states that opt into it. The bill would also pump about $175 billion towards affordable housing programs, according to estimates from the Committee for a Responsible Federal Budget.

Biden also called for the passage of a number of other proposals, including extending an expanded child tax credit and raising the minimum wage to $15 an hour.

In addition, Biden outlined new proposals that would affect states and local governments.

According to a White House fact sheet, Biden is proposing new funding for community behavioral health clinics.

To deal with unemployment fraud, a White House fact sheet said the Justice Department will appoint a chief prosecutor to lead teams of specialized prosecutors and agents focusing on major targets like foreign-based actors committing identity fraud to steal benefits.

Biden is also calling on Congress to increase funding for a Justice Department task force focused on pandemic fraud and to increase penalties on those who steal benefits intended to help people during the pandemic, according to the fact sheet. Biden will also announce an executive order to prevent and detect identity theft involving public benefits, though the White House did not reveal details.

Republicans have criticized Labor Department guidance from February that gives states added leeway to forego trying to recover improper unemployment payments. 

Trying to highlight successes in his first year in office, Biden touted the American Rescue Plan Act, as well as the separate bipartisan infrastructure act that will send billions in federal funding to states and local communities for public works.

“We needed to act, and we did,” he said of ARPA.

“Few pieces of legislation have done more in a critical moment in our history to lift us out of crisis,” he said.

Biden called the Infrastructure Investment and Jobs Act, “the most sweeping investment to rebuild America in history.”

He said 4,000 IIJA projects have been announced and that, because of the infrastructure act, the nation will start fixing over 65,000 miles of highway and 1,500 bridges this year, while also taking on other projects like building out electric vehicle charging stations and replacing lead drinking water pipes.