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Bidenomics: President Biden’s economic agenda is shrinking fast

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Yahoo Finance's Rick Newman breaks down why President Biden's economic agenda is shrinking.

Video Transcript

SEANA SMITH: We're going to stick with the topic of down in DC because it's time for this week's Bidenomics report. And we want to bring in Rick Newman, as we always do every Friday, to get his take on the latest that we have seen down in DC. And Rick, your big topic for this week is the fact that President Biden and his economic agenda looks to be shrinking pretty fast. Tell us about it.

RICK NEWMAN: It is shrinking, and I think that's actually a good thing for the Biden agenda. So the news that I paid attention to this week, we did have good news for stocks. We got some good economic news on retail sales. Unemployment claims are now below 300,000. But Nancy Pelosi earlier in the week, she sent out a letter to all the Democrats in Congress and say-- saying that the message she's been getting is that Democrats need to do fewer things well.

And that makes sense because this so-called Build Back better agenda, up till now, is a massive legislative package. And there have been some polls recently that show a majority of Americans don't have any idea what's in the plan. They know it's expensive. They're familiar with that price tag you just mentioned, $3.5 trillion, which I think you're right, it's not going to be the final price tag. But they don't really know what's in it.

So I think the Democrats have kind of had this massive grab bag of everything that every Democrat wants to see if they can get done. And that has just jammed up the works. And they've failed to meet those deadlines. They couldn't get a vote on the infrastructure bill at the end of September. The big reconciliation bill seems to be going absolutely nowhere.

So when Nancy Pelosi says, OK, the reality is we have to start talking about a smaller bill, I think that's what you have to do to start finding your way to the finish line. And by the way, a smaller bill could still be around $2 trillion over 10 years. And even if it's only $1 and 1/2 trillion over 10 years, that's a lot of spending Democrats should be happy to get, frankly.

SEANA SMITH: Yeah, and Rick, going off of that, I guess, what do you think the Biden administration would consider as a success when it comes to these two bills?

RICK NEWMAN: I think Biden has been pretty cagey and pretty clever about this all along. So my contention-- I mean, let's go back to the presidential election in 2020. Biden won the Democratic nomination not by being a progressive like Bernie Sanders. He said, you know, I don't stand for all that massive spending that Bernie Sanders and Elizabeth Warren stand for. He ran as a pragmatist. And I think he actually has been pretty pragmatic about this bill.

So he started out, sure, we're going to put everybody's favorite ideas in there. It's going to be massive and unwieldy and probably unworkable. And Biden himself has signaled, yeah, I get it. It's probably going to have to get a lot smaller. I would assume that he has known all along that the upper limit on what he might be able to get is perhaps $2 trillion. And this is just the reality when you have razor thin majorities in both houses of Congress.

If progressives on the liberal side of the Democratic Party really think there is a mandate for all this additional spending, then what they should do is just show everybody they can kick butt in the 2022 midterms, gain five seats in the Senate so they don't have to worry about Joe Manchin anymore, the progressives can do whatever they want, and-- I don't know-- gain 10 or 20 seats in the House. So you don't have to worry about the moderates who don't want to spend all this money.

That's not going to happen, most likely. So this is the only chance they've got. And the Democrats grudgingly seem to be accepting reality on their legislative plans, which is get it smaller.

SEANA SMITH: We will see what unfolds next week. Rick Newman, thanks, as always, for joining us. And of course, you can check out Rick's column on yahoofinance.com.

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