Recent victories, in particular, have strengthened the influence of the Biden administration on the US economy. His presidency will combine some of the traditional features of Democratic policymaking, such as raising taxes and expanding access to health care, with targeted investment to revive domestic industry, support the American workforce, and antitrust. A renewed focus on cracking down on monopolies with greater emphasis. Execution.
The beginning of Biden’s term has been defined by a fierce battle over the near-term economic landscape. The president has defended the 2021 bailout plan as leading to the biggest single-year job boom in American history, but critics have accused the same policy of hurting the economy. Fastest price increase in 40 years. But with the latest string of legislative victories, the battle over “bidenomics” has turned into a battle over the long-term trajectory of the country’s tax code, energy sector and other structural parts of the country’s economy. these discussions.
“Industrial policy and ‘buy America’ are far more comfortable than international engagement, pro-union policies, and policies that promote competition,” said Jason Furman, a senior economist in the Obama administration. ‘ said. “Many of them were with Obama, but there are more and more central to Biden.”
Hundreds of billions of dollars are being invested in the new law aimed at expanding America’s manufacturing capacity, White House officials say Ensure the broader economy continues to grow in areas such as infrastructure, semiconductors and renewable energy for years. Those economic gains will go back to workers through efforts to keep the tight labor market spurred by the relief plan, they say.
Jared Bernstein, a member of the White House Council of Economic Advisers, said, “History has put President Biden on par with FDR and LBJ when it comes to establishing a lasting legacy when it comes to the economic transformation needed to survive. It is likely to be put down,” he said. An interview referring to Democratic presidents Franklin D. Roosevelt and Lyndon B. Johnson, who have made big changes to the American economy such as Social Security and Medicare. We get an asterisk because we are building this legacy in.”
Yet, so far at least, Biden’s financial reputation has been overwhelmingly defined by one weakness. It’s inflation. Biden’s first major bill, his $1.9 trillion U.S. bailout plan, surged economic demand, leading many economists to say it led to the fastest price rise in decades in the United States.
Rising food, housing and energy prices, while easing, are putting pressure on Americans’ budgets, negating the benefits of broader wage increases. Polls consistently show that the public is broadly outraged by high prices, and it remains unclear whether his legislative accomplishments combined can overcome that frustration.
The current dangers to the economy threaten to undermine the Biden administration’s claims of progress and long-term transformation. If the Federal Reserve moves too far to deal with inflation, it could send unemployment skyrocketing and the economy back into recession. But failure to stem inflation also spells political and economic bankruptcy for the regime.
“Inflation hits everyone everywhere – and that’s just for the administration. Unless or until they fix it, nothing else matters,” said the pollster Analyst Frank Lantz said. Even when guns and abortions dominated the news, Runtz said, inflation eclipsed all problems for voters. Nothing else can match it because it has nothing to do with people.”
The White House also has to grapple with the failure of a key part of Biden’s campaign promises. Democrats made sweeping changes to the national safety net in 2020. Biden has called for the creation of a new “care economy” with new programs for child care, paid family leave and elderly care.
Despite the administration’s efforts, these ambitions have all but vanished in Congress. Some analysts say President Biden will be expanding the welfare state at a slower pace than former Democratic Presidents Bill Clinton and Barack Obama, who have made more significant changes to the U.S. healthcare system. The White House has approved an expansion of the child tax credit for her one year in the 2021 Relief Plan as a central component of the plan to reduce child poverty. We hope this will garner public support for this program to ensure that it continues to be extended. But that measure expired late last year and is unlikely to be renewed anytime soon.
Josh McCabe, welfare policy historian and senior analyst at the Niskanen Center, said: Center-right think tank. “They started with a very ambitious agenda and thought there would be a policy window, but it turned out to be dead wrong.”
Instead, Biden’s financial legacy will largely be the product of congressional negotiations. The deal was decided by Joe Manchin III (DW.Va.), the 50th congressional voter of the Democratic Party over the White House. Many of the policies that centrist Democrats agreed to support were also supported by President Donald Trump. Trump emphasized the need for action on prescription drugs, the revival of American manufacturing, and the need to counter the rise of China. These are all important parts of Biden’s agenda right now. He said that would reduce inflation.
“Conceptually, there is a lot of overlap between President Trump’s agenda and some Republican agendas,” said a former Treasury Department official in the Trump administration and co-founder of investment firm Amberwave Partners. Stephen Millan said. fund.
In an interview with The Post, Brian Deeds, director of the White House National Economic Council, said Biden had “one of the most significant bipartisan achievements in decades, including one that the former president sought but failed to deliver. We have achieved some,” he said.
But the White House has also taken actions that have been criticized by Corporate America in a major reversal from President Trump’s direction. For example, Mr. Biden’s broad approach to cracking down on the power of giant corporations reflects the Democratic consensus that a handful of giant corporations are stifling competition in the U.S. economy. He appointed an antitrust hawk to head the Federal Trade Commission, and his Justice Department is revising guidelines for large corporate mergers. The White House has taken steps to impose greater scrutiny on the shipping industry, which was deregulated under the Clinton administration, through new legislation to crack down on higher international shipping costs. , includes taxes on dozens of shipping companies with annual profits in excess of $1 billion.
“This is a big shift from the Reagan consensus carried on by the Obama administration,” said Sarah Miller, executive director of the American Economic Liberties Project, a think tank that advocates aggressive antitrust policies. rice field.
Biden has also seen a markedly different economic recovery than Obama, who suffered sluggish job and wage growth in the aftermath of the Great Recession. The stimulus package exacerbated inflation, but also avoided the severe labor market scars left after the last recession. Those solid gains are central to Biden’s efforts to empower workers, in part because he said he would raise the minimum wage and make it much easier for workers to unionize. Because Congress defeated efforts to deliver on Biden’s campaign promises.
High demand for workers, resulting in strong job creation and record numbers of vacancies, has encouraged workers to have more leverage to negotiate higher wages and benefits in the workplace. became. (Biden has also taken symbolic actions to boost union efforts, such as inviting Amazon labor leaders to the White House.)
“We’re not hitting workers as long-term as we used to,” said Claudia Sahm, an economist who used to work for the Federal Reserve. “I don’t think the labor system has changed, but the bargaining power of workers has returned,” she said.
Biden’s ultimate economic legacy could come down to comprehensive inflation-cutting legislation. The bill finally passed after months of difficult negotiations without a Republican vote. The law, the largest climate-related bill ever passed, will see Democrats reinforce the country’s industrial base with the aim of repairing supply chains weakened by the war in Ukraine and the coronavirus pandemic. We also hope to revive US manufacturing by reviving it.
Beyond the bill’s energy savings, the most immediate benefit to consumers may be prescription drug reform, which would require Medicare to negotiate prices for some of the country’s most expensive drugs. will run until 2026, after this year’s midterm elections and the 2024 presidential election, so it’s unclear how likely voters will feel about it.
“Compared to most presidents, he gets something out of the campaign platform,” said Doug Holz Eakin, a Republican policy analyst who heads the Congressional Budget Office and is skeptical of the plan’s climate efforts. “Now he has this piece. The question is whether it defines a legacy.”
