Updates on Biden's Economic Policy
Updated: Jan 13
Much of the Biden Administration's plan for recovery involves pushing for vaccination. On August 29, President Biden urged states to offer a $100 incentive to get vaccinated. (Mat Napo/Unsplash)
In the aftermath of economic recession, the White House must work efficiently to achieve recovery ― the aim of much of President Biden’s policy. This article covers the economic policy promised in his campaign and currently being implemented, and potential blockages that could cause turmoil for his administration.
Biden’s Campaign Promises
One of Biden’s main campaign strategies involved his approach to the American economy. It’s safe to say that the coronavirus has hindered the global economy and continues to cause problems. For example, the global economy worsened by 3.5 percent in 2020 alone, and the International Monetary Fund (IMF) reported a seven percent loss in growth. In America, many workers remain unemployed, and businesses, particularly small ones, have faced dire consequences.
In response, Biden’s presidential campaign heavily relied on his claims to help those affected by the virus monetarily. Many of his campaign promises focused on the middle and lower classes. Some of these promises include increasing the minimum wage to $15 per hour, forgiving student-loan debt, and increasing Social Security benefits, on top of his plans that are directly related to COVID-19 relief.
What policies are currently being worked on?
Despite the pandemic delaying many political actions, Biden’s administration has been relatively quick to make good on a key few of his campaign promises. Through his American Families Plan, Biden endeavors to allot $109 billion in order for all Americans to receive two years of free community college. His newly released tax plan, included in the 2022 fiscal budget, also includes a plan to fulfill his goal to raise the corporate income tax rate by seven percent. This tax plan also ensures that all Americans making less than $400,000 a year would see no tax increases, one of the major draws of his campaign.
In addition to the aforementioned projects, the most prominent is still in progress: containing COVID-19. Biden’s $1.9 trillion American Rescue Plan has succeeded in giving stimulus checks to those who are experiencing difficult times during the pandemic, as well as putting money aside for COVID testing and contact tracing. The Biden Administration has also managed to increase the speediness of vaccine rollouts, and as of now, more than 50 percent of the country is fully vaccinated.
Still, recent headlines indicate the virus will continue to run rampant throughout the country, slowing economic recovery. The recently discovered Delta variant of the virus could potentially cause problems for the White House in the midst of financial crises. Since the Delta variant can infect even those who are vaccinated, many Americans have extended their time social distancing and staying home, which impacts supply and demand, prolonging economic suffering. This setback in COVID recovery threatens to cause issues for the Biden Administration.
Issue to look out for: Inflation
In addition to most of Biden’s critics forecasting eventual economic decline as a result of his policies, the issue of inflation has slowly risen to the forefront of pressing economic issues. Economists predicted a rise in inflation since the beginning of the pandemic, but it has exceeded all expectations. The U.S. Bureau of Labor Statistics recorded a 5.4 percent jump in the Consumer Price Index (CPI) over the past year, similar to the jump observed during the Great Recession in 2008. The reason lies mainly in the reopening of the economy: goods and services are now in higher demand than they have been for over a year, and this has led policymakers in the White House to believe that this spike in demand is merely a passing issue.
“My administration understands that if we were to ever experience unchecked inflation over the long term, that would pose real challenges to our economy. So while we’re confident that isn’t what we are seeing today, we’re going to remain vigilant about any response that is needed,” Biden stated on July 19, 2021.
On the other hand, many people, especially those with a conservative agenda, argue that Biden’s COVID relief policies are part of the problem. Republican Kevin McCarthy took to Twitter to tell followers, “Inflation is running rampant due in part to out-of-control spending from President Biden and Speaker Pelosi. Make no mistake[,] with inflation rising at the fastest pace in 13 years, your hard-earned money is worth less in Joe Biden’s America.” Many agree with this point of view, stating that the $2 trillion Biden received from Congress for coronavirus relief has snuck up on the American economy in the form of increased prices—something citizens will pay for later in the form of increased taxes, as is the consequence of most instances of inflation.
Sources & Further Reading
https://www.investopedia.com/american-rescue-plan-definition-5095694 https://www.bloomberg.com/opinion/articles/2021-07-26/why-delta-threatens-to-undermine-the economic-recovery
https://www.washingtonpost.com/business/2021/06/10/inflation-what-to-know/ https://www.bloomberg.com/news/articles/2021-07-25/white-house-shifts-messaging-on-inflatio n-as-republicans-attack