What the Biden Presidency Means for US Economic Policy
Although Joe Biden has ambitious proposals to raise taxes and spend trillions of dollars over the next decade, he will be constrained if Republicans retain control of the Senate. He should welcome that outcome as an opportunity to govern in the mode of Bill Clinton, rather than as the ideologue others would like him to be.
STANFORD – US President-elect Joe Biden’s economic-policy agenda differs markedly from that of President Donald Trump. But Biden’s ability to enact his proposals will depend on three factors: the final composition of the Senate; his ability to learn from past successes and failures (not least the historically anemic Obama-era recovery); and whether the US economy can avoid a growth-sapping shock.
Biden easily won the popular vote in this year’s election, and, as with Trump in 2016, small pluralities in several swing states delivered him a comfortable Electoral College victory. But, despite being heavily outspent, Republicans made surprising gains in the House of Representatives and state legislatures. Exit polls show that voters’ top concerns were the economy, jobs, and the COVID-19 pandemic. With even California voters refusing to reinstate affirmative action or raise property taxes on businesses, the election turned out to be more of a Republican “red ripple” than a Democratic “blue wave.”
To win control of the Senate – with Vice President-elect Kamala Harris casting the tie-breaking vote – Democrats will have to win both of the Georgia run-off elections on January 5. Failing that, Biden’s agenda will be constrained substantially, forcing him either to compromise with Senate Republicans or resort to executive orders and regulatory diktats, as did Obama and Trump.