Opinion | Joe Biden, Scandinavian

There may be deep divisions within the Republican universe these days — over trade, Ukraine, Trump, Fox News — but there’s one unifying assertion: President Joe Biden is hell-bent on taking the United States down the road to socialism.

Biden’s new budget proposal, with high taxes on the mega-rich and expanded medical help for the working- and middle-class, has only fueled the attacks that go back at least to the 2020 campaign. It was the dominant theme of the GOP convention; it’s how National Review attacks Biden’s student loan forgiveness program; it’s how Nikki Haley and Matt Gaetz decry the president’s budget. Donald Trump, never one for subtlety, simply labels Biden and his supporters “communists.”

In one sense, this is very old wine in not-so-new bottles. Attempts to brand progressive policies as “socialist” go back — literally — for more than a century. Measured by its accuracy and its political impact, it’s not proven all that potent. But given the persistence of the tactic, it might be useful to set down a few key notions:

• Joe Biden is at pains to assert that “I’m a capitalist. I’m not a socialist.”
• A lot of what Biden is proposing would look quite at home in Scandinavia and Western Europe.
• Those nations aren’t really “socialist” at all, even if they’re celebrated by America’s best-known socialist.
• Republicans really, really hate socialism — but will also scream bloody murder if Democrats suggest they want to so much as touch the most obviously socialistic programs of the American government.

Making sense of these assertions does not require squaring a circle; what it does require is an understanding of just how amorphous the term “socialist” is, and why whatever you call Biden’s various policy goals, they are firmly within the American political tradition — and may indeed be very smart politics, at that.

All through his two presidential runs, Sen. Bernie Sanders was asked what it meant that he called himself a “democratic socialist.” Invariably, the Vermont independent would point to the Scandinavian nations and their universal health care, paid family leave and free college education. (He did not call for the government to “control the means of production and distribution,” the classic definition of socialism and an omission at odds with the Democratic Socialists of America, a 92,000-member organization that asserts: “We want to collectively own the key economic drivers that dominate our lives, such as energy production and transportation.”)

But are Denmark, Sweden and Norway really “socialist” nations? They wouldn’t cut it for the DSA. The private sector is alive and well, businesses have a lighter tax burden than in the U.S., and even their health care systems are far from totally public. In Sweden, by one estimate, some 40 percent of health clinics are private, for-profit enterprises.

Indeed, throughout the industrialized world, the traditional goal of socialism has long since been jettisoned, even as elements of its core philosophy have been embedded in government policy. For example, Germany, whether run by center-right Christian Democrats or center-left Social Democrats, is a resolutely capitalist land, but its laws also require workers to be well represented on large corporations’ supervisory boards, where key decisions are made. In Britain, the Labour Party under Tony Blair renounced nationalization almost 30 years ago. The last Labour leader to embrace the idea, Jeremy Corbyn, presided over a historic walloping at the polls, and current leader Keir Starmer says he would not nationalize the energy industry (though a significant element of the party’s rank and file embraces the notion of “common ownership”).

Ideas like universal health care and expansive workers’ rights have long carried the label of “social democracy”: if not full socialism, then the notion that the government should craft a strong social safety net, impose higher taxes on the wealthy and limit the private sector’s power. (Those who see the hand of Karl Marx in such ideas — as Ronald Reagan did when he assailed the idea of Medicare back in 1964 — need to contend with the fact that the father of government-financed old age and health insurance was the ardent anti-socialist Otto von Bismarck, who first proposed the idea in 1881).

In the 2020 Democratic presidential contest, the left had its champions and Biden was most certainly not among them. But even the most committed Bernie Bro might acknowledge the president’s progress toward nudging the United States toward social democracy.

Consider the elements of Biden’s bipartisan $40 billion investment in semiconductor manufacturing — itself an impressive display of industrial policy. The package comes with strings, the New York Times notes. Companies have to pay union wages; they have to share some of their profits with the government; they have to provide free childcare for their workers; they have to run their plants with environmentally friendly energy sources. These proposals are of a piece with some of the more ambitious Biden policies, some of which, like the expanded child-tax credit, have expired, and some of which, like capping the price of insulin for seniors, remain in place and have been embraced by the private sector. His recent State of the Union address contained a swath of proposals to limit the power of private companies, whether by capping excessive airline baggage fees or hidden credit card charges.

The response to all of this from Republicans has been to raise the specter of “socialism.” Last month, the GOP-controlled House voted 328-86 for a resolution declaring that “socialist ideology necessitates a concentration of power that has time and time again collapsed into communist regimes, totalitarian rule, and brutal dictatorships. … Congress denounces socialism in all its forms, and opposes the implementation of socialist policies in the United States of America.” If the goal was to split their opponents, Republicans succeeded: More than 100 Democrats voted for the resolution which, taken literally, would condemn the policies of some of America’s most resolute allies, and which was clearly designed to throw shade at the president.

Of course, almost as vociferous as the GOP’s denunciation of socialism was its fury at the very idea the party might be moving to lay a finger on the two most clearly socialistic elements of U.S. policy — Social Security and Medicare.

When Biden used his State of the Union address to note that “some” Republicans were suggesting cuts in the programs — most specifically Sen. Rick Scott of Florida — GOP lawmakers erupted in anger. Scott, for his part, quickly amended his proposal sunsetting government programs by exempting the popular social insurance systems. It calls to mind the cry of a citizen at a congressional town hall meeting years ago: “Keep your government hands off my Medicare!” (Notably, Donald Trump also deserves some credit for steering the GOP away from a free-market orthodoxy intent on gutting retirement programs.)

It’s a little unfair to ascribe cognitive dissonance solely to Republicans. The confusion about what consists of “socialism” is pervasive. Polls show Americans disapprove of “entitlements,” but overwhelmingly approve of Social Security, Medicare and veterans’ benefits — in other words, programs people are entitled to by law. Sanders’ idea of free tuition for public colleges may seem a reach, but a generation or two ago, free college was widely available. City University of New York was famously tuition free from 1847 until 1976, and many state universities once imposed only fees. In some places, community college is still free.

A large majority of Americans see health care as a right, even as majorities of Americans say the government is too powerful and tries to do too much. This dissonance was crystalized by the election victory of Ronald Reagan, who proclaimed in his 1981 Inaugural Address that “government is not the solution to our problem, government is the problem,” and then presided over a government that was bigger when he left it. (For that matter, Margaret Thatcher never tried to repeal Britain’s national health insurance.)

In this populist moment, Biden has also won applause from the left and right for flexing government’s muscle when it comes to cracking down on Big Tech and the growth of monopolies, be they in the form of airlines or book publishers. Biden is showing his Rooseveltian roots, not just FDR but TR.

A long-running debate exists over why socialism failed to take root in the United States, unlike in Europe. In the near run, the success of Biden’s “social democracy” efforts will stand or fall on whether he can — as many of his Democratic predecessors did — define his policies not as the importation of a foreign ideology, but as part of a continuing effort to make the economic playing field fairer and safer without changing the fundamental rules of the game.

For a century or more, those efforts have met with powerful resistance, even as the political consensus gradually shifts toward a more robust American welfare state. The most recent example: Republicans have given up their efforts to repeal Obamacare after years of pushing to do just that. It turns out that, with a little more modest ambitions, “socialism” has found a home of sorts in this land of individual freedom — as long as you call it something else.

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Bank failures revive bitter Senate Democratic infighting

Five years to the day after Senate Democrats clashed bitterly over Donald Trump-backed bank deregulation, the failure of two banks is reigniting the old tension.

President Joe Biden on Monday criticized the former president’s loosening of bank regulations, when Trump and a Republican-controlled Congress approved a measure to roll back parts of the 2010 post-financial crisis reform bill known as Dodd-Frank. Biden didn’t mention that his own party played a significant role, but Sen. Elizabeth Warren (D-Mass.) is well aware.

“I wish I’d been wrong. But I knew I wasn’t,” Warren said in an interview this week about her opposition to the 2018 law. She’s now calling for repealing it: “Both parties participated in rolling back the rules. Now both parties need to participate in strengthening the rules.”

The current Senate Democratic discord is especially acute because the caucus had the numbers to block the 2018 effort — but under heavy pressure to cut a deal to help community banks in an election year, 17 of them supported it. The collapse of two banks with roughly $300 billion in total assets over the past week has animated those internal divisions among Democratic senators, who usually pride themselves on policy unity. And it starkly contrasts with Senate Republicans, who uniformly supported the last big banking bill.

Asked whether he regretted his vote, Sen. Michael Bennet (D-Colo.) told reporters: “No. I voted for a bill that was a bipartisan compromise.”

“Sometimes members choose policy positions and wait to see if history serves them,” said Senate Majority Whip Dick Durbin (D-Ill.), who opposed the legislation. “Sometimes it does, sometimes it doesn’t.”

In case it was unclear, he added: “I was on the right side of it.”

Republicans instantly ruled out passing new bank regulations on Tuesday, arguing federal regulators are already empowered to increase scrutiny of those banks. So Democrats will have to decide whether it’s worth taking their internal fight to the Senate floor again.

Several Democrats said they want to see either repeal of the 2018 legislation or other tougher laws. But at the moment there is no apparent solution that would get 51 Democratic votes, much less the 60 senators needed to vault a filibuster.

“We’re going to try,” Senate Banking Committee Chair Sherrod Brown (D-Ohio) told reporters. But he added that “I don't know how we do a legislative fix.”

Exacerbating the internal fight: Democrats don't agree whether the rollback was actually to blame for the present bank failures. Sen. Jon Tester (D-Mont.), who cut that 2018 deal with Republican Sen. Mike Crapo (R-Idaho.), said in an interview on Tuesday that he stands by his vote and disagrees with those blaming his legislation: “I don’t see it the same way. If you read the bill, you’ll know that it doesn’t let them off.”

“Would I vote the same way [today]? Yes,” said Sen. Angus King (I-Maine), who caucuses with Democrats and voted in favor of the 2018 legislation. “Because of the important help to smaller banks and community banks; that was my mission.”

The 2018 law peeled back parts of Dodd-Frank to exempt smaller banks from federally administered “stress tests” that weighed their ability to weather economic downturns. Its enactment meant Dodd-Frank's stricter federal oversights only applied to a handful of bigger banks.

And the issue is already becoming a cudgel in Senate races. Rep. Ruben Gallego (D-Ariz.), who is running for the Arizona Senate seat, went after Sen. Kyrsten Sinema (I-Ariz.) for her vote in support of the 2018 law, calling the votes the “most salient example of how we’re different.” Of the most vulnerable Democratic senators up for reelection next fall, Brown, Tammy Baldwin of Wisconsin and Bob Casey of Pennsylvania opposed the 2018 law, while Sens. Joe Manchin of West Virginia, Tester and Sinema supported it.

“It was obviously a mistake,” said Sen. Martin Heinrich (D-N.M.), another incumbent senator, who missed the 2018 vote but criticized the bill then. “It was ill-advised, these are big banks … and they need to have some backstops."

Asked whether he sensed a divide among Senate Democrats, Sen. Tim Kaine (D-Va.) replied: “That question answers itself. Because there were some in 2018 who thought it was a good idea … and I put myself in that category; I was listening to my community banks.”

Silicon Valley Bank and Signature Bank, both of which qualified for the 2018 exemption, had lobbied hard for the measure by assuring lawmakers they were not big enough to pose systemic risk. Yet federal authorities cited that exact problem on Sunday when they announced they would backstop all of Silicon Valley Bank’s deposits after it collapsed thanks to a large-scale run.

“Working together, a good job — a miraculous job — has been done to stem the possibility of systemic risk,” Rep. Maxine Waters said in an interview. The Californian is the top Democrat on the House Financial Services Committee and opposed the 2018 law.

She also warned against jumping to conclusions on whether congressional action had prompted the bank failures: “I don't know what could be said about what has happened here with this; the collapse of Silicon Valley as it relates to Dodd-Frank.”

As it stands, the toughest regulations apply only to banks with more than $250 billion in assets. Silicon Valley Bank and Signature Bank held around $209 billion and $110 billion, respectively, when regulators took over. Summing up the back and forth, Warren said midsize banks were acting like “little community banks, and should be only lightly regulated. That was laughable on its face.”

It's made a painful issue for Democrats for years now, ever since a group of party centrists went around Brown, then the top Democrat on the Banking Committee, to cut a deal with Republicans. Brown said on Bloomberg Radio on Tuesday that some Democrats “don't fight hard enough,” but then he went into peacemaking mode.

“I think that it's been illuminating to a lot of people,” Brown told reporters later. “I think all the Democrats [now] realize we need stronger rules.”

Even with their entrenched positions, Democratic senators are trying to avoid a replay of the backbiting five years ago when Warren called out her colleagues that supported deregulation in a fundraising email. That move prompted a contentious meeting among Democratic chiefs of staff in which Dan Geldon, then Warren’s top aide, cited nonpartisan Congressional Budget Office warnings that more bank failures could result from rolling back Dodd-Frank, according to three people familiar with the meeting.

Geldon argued at the time that Warren was fighting on principle and not just to target other senators, while aides to senators that supported the bank bill blanched at her tactics and said they were merely reacting to banks back in their states, according to those three people.

Now Democrats can at least face that dispute from the majority, when they're able to choose what comes to the floor. Senate Majority Leader Chuck Schumer has been careful about how he characterizes a potential congressional response, saying Capitol Hill will “look closely” at next steps.

New Hampshire Democratic Sens. Maggie Hassan and Jeanne Shaheen both said they’d be willing to reexamine the 2018 law, which both supported, if investigations find that was the cause of the failures. But they evinced no regrets about their position.

“The reality is, it was very bad management at SVB. And you can’t fix that with any regulation,” Shaheen said.

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Senators from both parties press Austin on sending F-16s to Ukraine

A group of senators from both parties is pressing the Pentagon for more information on what it would take to send F-16 jets to Ukraine.

The fresh push came in a letter Tuesday to Defense Secretary Lloyd Austin from eight senators, and obtained by POLITICO, as top administration officials from President Joe Biden on down have poured cold water on bipartisan calls to send U.S.-made fighters into the fight for now.

The conflict between Russia and Ukraine is "now at a critical juncture," the senators wrote, arguing F-16 fighters could give Kyiv an edge as Moscow's full-tilt invasion enters a second year.

"After speaking with U.S., Ukrainian, and foreign leaders working to support Ukraine at the Munich Security Conference last month, we believe the U.S. needs to take a hard look at providing F-16 aircraft to Ukraine," the senators wrote. "This would be a significant capability that could prove to be a game changer on the battlefield."

The letter was organized by Sen. Mark Kelly (D-Ariz.).

The senators requested Austin provide them with assessments by the end of the week on a variety of factors needed to successfully transfer F-16s to Ukraine.

Among their questions, the lawmakers asked how high Ukrainian officials are ranking fighter jets when making requests for weapons and how the F-16s might be sourced if approved — either newly produced or from current inventories. They also sought the military's assessment of what impact F-16s would have on the conflict and how quickly Ukrainian pilots could be trained on the jets.

The group hailed reports that two Ukrainian pilots came to the U.S. for a fighter skills assessment at Tucson's Morris Air National Guard Base, in Kelly's home state, which they called a "critical step in gauging" their readiness to fly F-16s.

Also signing onto the letter were Democrats Tammy Duckworth of Illinois, Tim Kaine of Virginia, Martin Heinrich of New Mexico and Jacky Rosen of Nevada as well as Republicans Lisa Murkowski of Alaska, Tommy Tuberville of Alabama and Ted Budd of North Carolina.

Bipartisan efforts to convince the Biden administration to send F-16s, or facilitate other countries sending them to Ukraine, have been bolstered by assessments such as those of Gen. Christopher Cavoli, the top U.S. and NATO commander in Europe. Cavoli told lawmakers behind closed doors at the Munich Security Conference last month that sending advanced weapons, including F-16s and long-range missiles, could help bolster Ukraine's defenses.

But top civilian officials, including Biden and White House national security adviser Jake Sullivan, say fighters aren't an immediate battlefield need compared to other capabilities.

Pentagon policy chief Colin Kahl also defended the administration's stance, telling the House Armed Services Committee last month that the most optimistic timeline for delivering older F-16s would be roughly 18 months, while producing newer jets could take three to six years to deliver.

"It is a priority for the Ukrainians, but it's not one of their top three priorities," Kahl testified. "Their top priorities are air defense systems ... artillery and fires, which we've talked about, and armor and mechanized systems."

The Senate letter follows a bipartisan effort in the House, spearheaded by Maine Democrat Jared Golden, to convince Biden to send Kyiv F-16s or similar aircraft.

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The crypto 'contagion' that helped bring down SVB

The lender's lightning collapse is testing the claim that traditional finance is perfectly insulated from volatile crypto markets.

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Senate Republicans break with DeSantis over opposition to Ukraine aid

"Well, I don’t know what he’s trying to do or what the goal is," Marco Rubio said.

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Russian jet collides with U.S. drone in ‘reckless’ maneuver

A Russian fighter jet collided with a U.S. drone flying in international airspace on Tuesday, sending the uncrewed aircraft crashing into the Black Sea, the U.S. military announced.

The uncrewed MQ-9 Reaper drone was making a routine flight before it was intercepted by two Russian Su-27 fighter jets. The warplanes dumped jet fuel on the drone and flew in front of it in a “reckless, environmentally unsound and unprofessional manner,” according to a statement from U.S. European Command.

One of the Russian aircraft then struck the drone’s propeller, sending the Reaper crashing into the Black Sea, said Air Force Gen. James Hecker, commander of U.S. Air Forces Europe.

“In fact, this unsafe and unprofessional act by the Russians nearly caused both aircraft to crash," he added. “U.S. and Allied aircraft will continue to operate in international airspace and we call on the Russians to conduct themselves professionally and safely.”

The downing of the drone comes amid continued tensions between both countries over the war in Ukraine.

The statement added the incident over the Black Sea also follows “a pattern of dangerous actions” involving U.S. and allied aircraft and Russian planes.

“These aggressive actions by Russian aircrew are dangerous and could lead to miscalculation and unintended escalation,” European Command said.

During a briefing with reporters on Tuesday, National Security Council spokesperson John Kirby said the State Department will “make our concerns known” with Moscow. He noted this marks the first time one of these aerial intercepts “resulted in a splashing of one of our drones.”

One Reaper drone costs roughly $14 million.

Gen. Christopher Cavoli, supreme allied commander for Europe, has briefed allies on the incident, according to a NATO official.

A senior diplomat in Eastern Europe, who was granted anonymity due to the sensitivity of the issue, said officials are concerned "as it shows the aggressiveness of the Russian conduct. … This again shows the importance of the Black Sea and the need to have an approach on it for medium and long term.”

Alexander Ward and Lili Bayer contributed to this report.

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Pritzker, allies are ready to cover bills if Chicago gets Dem convention

CHICAGO — Illinois politicians, including Gov. JB Pritzker, and wealthy corporate leaders are sweetening their pitch to host the 2024 Democratic convention by pledging to make sure the DNC can walk away debt-free.

In the city’s battle with other finalists, New York City and Atlanta, the governor, his sister and former Commerce secretary Penny Pritzker, businessman Michael Sacks, Cubs co-owner Laura Ricketts and Illinois AFL-CIO President Tim Drea have been in talks about funding Chicago’s effort. It’s a lineup of resources designed to blunt the fears of repeating the 2012 convention in Charlotte, N.C., which ended with an $8 million tab.

“We have a strong fundraising community that will be able to raise the money for the convention and not create any debt for the DNC, the city of Chicago or the state of Illinois. It would be a win for everyone financially and electorally,” Chicago Federation of Labor President Robert Reiter said in an interview. “And it would put thousands of people to work.”

But what’s gone largely unsaid — at least officially — is the governor’s own riches.

JB Pritzker, a billionaire with presidential potential, is a noted philanthropist and a prolific Democratic donor who cut checks last year for incumbent governors like Michigan’s Gretchen Whitmer and the Democratic parties in Minnesota and Wisconsin.

Pritzker’s team is hoping to lure the party to Chicago with what’s essentially a financially risk-free 2024 convention. Federal funds don’t generally cover conventions, though security for the U.S. Secret Service is funded through a federal grant for as much as $50 million to pay for, among other things, additional police presence. So having a billionaire governor as a stopgap could be alluring.

“The governor has spoken directly to Joe Biden and committed that Chicago has the ability to fund the convention,” Natalie Edelstein, a spokesperson for the Chicago bid, told POLITICO.

Conventions are costly affairs. When the 2012 Democratic convention wrapped, Democrats still owed money on everything from operational expenses to construction work and modifications made to the Time Warner Cable Arena. To deal with the $8 million bill, the city of Charlotte secured a $10 million line of credit from Duke Energy, an electric utility in the region. But Democrats didn’t repay Duke, which claimed the money as a business expense, drawing criticism for leaving shareholders to foot the bill.

Those organizing Chicago’s bid expect the price tag to run between $80 million and $100 million.

A priority for Chicago and Atlanta is fundraising, which relies on four pillars: organized labor, national corporations, political donors and local businesses and leaders.

“If one of those entities is not participating, it becomes almost impossible to fundraise,” said a Democratic strategist who’s consulted on conventions.

President Joe Biden has already sought to nudge his party south, pushing South Carolina up the Democratic presidential nominating calendar, and awarding the convention to Atlanta would bring more attention to Georgia, which swung his way in 2020. Labor leaders in New York have also tried to spike Atlanta over its dearth of unionized hotels and the idea that such a pro-union president would take the convention to a right-to-work state.

Still, some Midwestern Democratic elected officials have recommended Chicago to the DNC, according to letters written by Michigan Gov. Gretchen Whitmer and others.

A potential strike among food workers at Chicago’s United Center, which would be the centerpiece location of the convention, caused some recent concern about the viability of the bid. But the tensions appear to be close to a resolution. UNITE HERE Local 1 and Levy Restaurants have reached a tentative agreement, and union members are expected to ratify it in the coming days.

The effort to bring the Democratic convention to Chicago is also reminiscent of the city’s business community stepping up in 2009 for an ill-fated bid for the 2016 Olympic Games.

But another undercurrent around Chicago’s push for 2024 attention is the persistent concern about the city’s crime, which upended the mayor’s race this winter. Mayor Lori Lightfoot, who was seen as a strong voice to represent the city in a convention, was bumped from the runoff, leaving two candidates at the extreme ends of the Democratic Party about public safety and policing.

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