What Biden Learned the Last Time the World Stopped
He oversaw the 2009 economic recovery for Barack Obama. If he wins the presidency, his first task will be to perform an encore on an even more daunting scale.
It was by far the largest enterprise Joe Biden had ever led: a nearly $800 billion government-spending program intended to rescue the country from the worst economic collapse since the Great Depression. It involved more than 100,000 projects—275 programs within 28 federal agencies. “If we do everything right, there’s still a 30 percent chance we’re going to get it wrong,” Biden himself said at the time.
But in overseeing the 2009 Recovery Act as Barack Obama’s vice president, Biden shepherded an effort now seen as an effective and remarkably fraud-free response to the financial crisis, even if it won little praise or political credit at the time. If Biden has the good—or bad—luck to win the presidency in November, his first task will be to perform an encore on an even more daunting scale.
It wasn’t a glamorous job, involving as it did minding hundreds of minor details and scores of bureaucracies, and some public officials doubtless would have found it boring. But it was the kind of close work that’s required for good management in any crisis, and Biden seemed to take to it with an enthusiasm that those who were there in the trenches with him recall with pride.
“He would be the most battle-tested president to come into office that we’ve ever had in this regard,” said Biden’s longtime economic adviser Jared Bernstein, a progressive expert on income inequality who would doubtless have a role in a Biden administration. “FDR did amazing work on the Great Depression, but he was throwing noodles at the wall. Biden would bring a unique experience to the office, having been the implementer in chief last time.”
Indeed, the story of how a longtime legislator, who had never run anything larger than a Senate committee staff, managed to marshal a government-wide campaign may offer a preview of how a President Biden would approach the coronavirus pandemic, and the global economic contraction it has already spawned. Paradoxically, though, it’s a story that’s hard for the presumptive Democratic nominee to share with voters at the moment, because he, like so many Americans, is stuck at home.
“What I found was you have to manage it every single day,” Biden said during a recent CNN town hall, after he was asked what his experience handling the recovery had taught him about the qualities needed in a president in times of crisis. “And so it’s about management. It’s about day to day to day. And I give you my word that for the better part of that 18 months, I was literally on the phone at least three to four hours a day with my team, talking about the detailed implementation. How do we get the money? What do we do? Who do we go to? Who do we ask for?”
To the degree that there was criticism of Biden’s management of the Recovery Act—and there was some—it mirrored the current critique of the former vice president’s pragmatic brand of politics. Critics on the left faulted him and Obama for not making the stimulus package bigger (though keeping it below $1 trillion was the price of winning necessary Republican votes for its passage in the Senate). Republicans attacked the administration for defaulting to Democratic priorities and not working harder to win GOP support.
“The stimulus represented the original sin of the Obama administration to congressional Republicans,” said Michael Steel, who was then a senior aide to the House Republican leader, John Boehner. “It set the tone for the next eight years. House Republicans would have been pretty cheap dates—and it wouldn’t have taken that much to get a fair number of moderates on board—if the White House had reached out more.”
The Democratic viewpoint is precisely the opposite. For Biden and the Obama White House, the House GOP’s lockstep opposition to the plan—before Obama even made his first trip to Capitol Hill to press for it—was what set the tone for the next eight years. In this version of the story, Biden’s successful lobbying of three Senate Republicans—Olympia Snowe and Susan Collins of Maine, and Arlen Specter of Pennsylvania—made possible the passage of any program at all.
“We needed three Republican votes, and he went and he got the three Republican votes,” recalled Ron Klain, then Biden’s chief of staff and now a campaign adviser. “People say, ‘It was a different time, and he couldn’t do that again.’ But a lot of people said he couldn’t do it back in 2009.”
In January of that year, the month Obama took office, the country lost some 800,000 jobs, as unemployment edged toward 8 percent. That capped the worst three months of jobs numbers since defense factories ceased operating at the end of World War II. The stimulus that Obama proposed was a mix of tax cuts, tax credits for business, aid to state and local governments, an expansion of food stamps, and a raft of infrastructure programs.
In his memoir, Believer, Obama’s chief strategist David Axelrod conceded that “to a cynical public, it looked less like ‘Change We Can Believe In’ than ‘Dollars We Can’t Afford,’ which was another way of saying business as usual.” But from the beginning, Obama White House veterans recall, the president told staff that the program should be run as efficiently as possible. Biden drafted a memo outlining how he thought the project should be managed and presented it to Obama over lunch in February 2009. As the author Michael Grunwald recounts in his admiring 2012 history of the Recovery Act, The New New Deal, Obama scanned the memo, flipped it back across the table to Biden, and said, “Great, do it.”
“He wanted me to be the bastard at the family picnic,” Biden would later say, “which, politely, I am.”
Biden made the program a typically personal, “high-touch management” project, because he knew so much, including his own reputation, was riding on it, Klain told me. Although Biden himself had never held a big executive job in his long career in public life, he was known in the Senate for hiring and promoting highly competent staffers, and he relied on the same strategy in this assignment. As Grunwald notes, over the first two years of the administration, Biden convened 22 Cabinet meetings on the recovery program (highly unusual for a vice president, and more than the president had held on all other topics), visited 56 project sites, and hosted 57 conference calls with governors and mayors. He also blocked 260 projects that seemed suspect as political pork or that had been proposed by contractors with sketchy backgrounds, Klain recalled.
“This was not a McKinsey project,” Klain told me, referring to the consulting company known for its empirical analysis and cold-blooded management advice. “This was a Joe Biden project. Very hands-on. It was very personal to him, the way he interacted with people.”
Biden promised state and local officials who had questions about the program that they would get answers within 24 hours, and he rode herd on his staff to make sure they did. He drafted Earl Devaney, the former head of the Secret Service’s fraud division and the ex-inspector general of the Interior Department, to root out suspected waste, and Ed DeSeve, a veteran of the Clinton administration’s Office of Management and Budget, to run the program day to day. One particular challenge, as Grunwald’s book explains, was that tiny bureaucracies within federal agencies were tasked with dispensing huge sums. For example, a Commerce Department unit with a $19 million budget was responsible for distributing $4.5 billion in grants for building broadband connections.
Ray LaHood, a former Republican representative from central Illinois who was Obama’s first transportation secretary, praised the task force that Biden assembled, and commended the way he would run “roughshod over everybody to make sure” the work “was done right.” “We put hundreds and hundreds of people to work building roads, building bridges, building rail,” LaHood continued.
But he conceded that the program won little public or political praise. “Part of the problem was the Republicans didn’t like it,” he said, “and they bad-mouthed it at every turn.”
In hindsight, Klain told me, he has sometimes wondered whether the program was too sprawling and complicated. It was made up of so many scattered projects—many of them advertised by roadside signs—that envisioning the overall effort as a coordinated plan with an identifiable mission was hard for the public. It didn’t have the visibility of, say, the Works Progress Administration’s construction of thousands of public buildings, or the Civilian Conservation Corps’s creation of parks and highways during the Depression. And the concern about preventing fraud sometimes slowed the flow of dollars. “Maybe we would have been better off to just send everybody a check,” Klain said. “I think as fast as it was, it still took a while.”
Former Treasury Secretary Tim Geithner lamented the recovery’s branding problem in his memoir, Stress Test. “‘Things are getting worse at a much slower rate’ is not a convincing message of hope,” Geithner wrote in a passage about the public’s reluctance to embrace the program as effective. “Neither is, ‘Things would have been much worse if we hadn’t acted.’ It’s hard to inspire the public with counterfactuals.” By the end of the summer of 2009, unemployment still stood at 9.6 percent.
If he should take office next year, Biden would be forced to multitask on an extreme level, not only grappling with how to restore some degree of normalcy whenever required social distancing ends, but also handling the economic and health aftereffects that are sure to linger long after the immediate crisis abates. Terrell McSweeny, who was Biden’s chief domestic-policy adviser at the time, recalls that after the Recovery Act’s initial passage, Obama had many other pressing issues on his agenda, including his overhaul of the health-insurance system, so he relied on his vice president. This time around, Biden would have to find a Biden of his own. “What Biden was able to do was take on these incredibly wide-ranging investments and set of programs across the board,” McSweeny said, “and keep all of that in process with a relatively small staff coordinating deeply—and using his ability at the top of government to constantly keep the pressure on.”
Perhaps the biggest difference from a decade ago is the sheer scale of the current problem. “I think the idea that we get the all-clear sign from the medical community and the economy is fine at that point is really misguided,” Bernstein said. He cited forecasts that unemployment could be at 15 percent by this fall, more than 8 percent in January, and still well over 6 percent by the fourth quarter of 2021. The Great Recession of 2008 upended the economy, sparked by the housing bubble and resulting turmoil in financial markets. This crisis has a different, more deadly cause and is already proving more far-reaching.
Complicating Biden’s task further is an even more toxic partisan political divide in Washington than existed a decade ago. House Democrats are in a standoff with Senate Republicans over what next steps to take, if any, following the just-passed $2 trillion coronavirus-relief plan.
In 2009, congressional Democrats, who at that time were also led by Nancy Pelosi, paid a serious public-relations price for initially attempting to freight the Recovery Act with unrelated liberal priorities—such as measures for smoking cessation and STD prevention—that had been stymied during the George W. Bush administration. (Those amendments never made it into the final bill.) Pent-up progressive demand for change, on policies including taxes and health care, is likely even more intense today, after three years of Donald Trump’s presidency. And Biden would take office in the face of deep skepticism from many segments of his own party’s left wing.
Still, Biden’s allies insist he’d have the temperament to manage it well. “What I experienced firsthand was that the vice president took to this like a duck to water,” Bernstein said. “I sat with him on dozens of calls to mayors and governors where mayors of small towns couldn’t believe they were talking to the vice president, who was getting into granular detail about precisely what they were going to do.”
Bernstein remembers being at the site of a bridge project in rural Pennsylvania with Biden and a state official, who was talking about what they planned to do. “Biden says, ‘Can I see the plans?’ And the guy goes and pops open his trunk and they look at the plans” together, Bernstein recalled. “We had this whole motorcade, sitting there in the middle of nowhere. It was surreal.”