Biden economic agenda confronts a divided Congress

  • In Business
  • 2023-02-08 23:52:09Z
  • By BBC

President Joe Biden may not be out of ideas for how to deliver on his economic promises. But he does seem to be out of time.

In his State of the Union address, the president urged lawmakers to "finish the job" - calling for a new tax on the super wealthy, a crackdown on Big Tech companies, and other financial support for families, including family and medical leave.

For those following the issues, it was an oblique way of acknowledging that many of those proposals had already been presented in the last two years and failed to advance, despite Democrats having control of both houses of Congress.

With Republicans now holding a majority in the House of Representatives, the chances of them becoming reality have only lessened.

"A lot of them were not serious legislative proposals - they were campaign points and politics," said Douglas Holtz-Eakin, president of the American Action Forum, a centre-right think tank in Washington. Of the tax increases, he added: "None of those things have a chance of turning into law."

Mr Biden does have some big victories from the last two years to champion - $550bn (£455bn) that the federal government will steer to roads, bridges and other infrastructure projects; $280bn for investments in high tech manufacturing and other research and development; and another nearly $400m for green energy technologies.

But despite those wins, a recent poll by the Washington Post-ABC News found that Republicans and independents overwhelmingly viewed the president as having accomplished little during his time in office. Even 22% of Democrats shared that view.

Analysts said it will be hard to change that perception in the next two years.

Business groups are already pushing back hard against some of the regulatory changes Mr Biden has proposed, such as curbing so-called "junk" fees that banks, airlines and others charge customers, or barring so-called non-compete agreements, which limit the ability of employees to go work for rival businesses.

"Overregulation will stop progress in its tracks," US Chamber of Commerce president Suzanne Clarke wrote on Twitter in response to the president's speech.

Biden met workers in Wisconsin one day after his big speech
Biden met workers in Wisconsin one day after his big speech  

Even on issues where there might seem to be appetite for action in both parties, few are expecting results.

The president's call for action on Big Tech drew applause from both Republicans and Democrats, for example, but talk in Congress on new rules dating back to the Trump administration has yet to produce change.

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Last year, Republicans and Democrats also tried to negotiate a deal that would grant tax changes favoured by business in exchange for expanding the child tax credit, a tax break for families that was credited with lifting millions of children out of poverty when Congress increased it as part of its pandemic relief programme.

Those talks also failed.

"The president doesn't get to pass legislation on his own," said Elaine Maag, senior fellow at the Urban Institute, a Washington think tank focused on issues of equity and opportunity.

"I'm confident that in the Senate there are more than 50 votes to pass an expanded tax credit. I'm much less confident that there are enough votes in the House for a big piece of legislation like that right now."

Elaine Kamarck, a senior fellow at the left-leaning Brookings Institution, says people should not be so quick to write off the president's chances, noting that with such a narrowly divided Congress getting some of his proposals through would only take a few votes.

Republicans have become a more populist party than they were just a few years ago, she added.

"This is not your grandfather's Republican Party where they were all businessmen or Wall Streeters, so you can see a few votes getting picked off," she said.

But Mr Holtz-Eakin said the White House was scaling back its economic message from the big ambitions that Mr Biden ran on for president.

"I think there's a realisation that the Build Back Better agenda was too big. It never really did add up and the American people don't support it," said Mr Holtz-Eakin, pointing to the president's approval ratings, which continue to hover in the low 40%.

Indeed Mr Biden mentioned some of the biggest issues for the progressive Democratic base - such as family and medical leave and student debt relief - only in passing. Raising the minimum wage did not get a nod at all.

Dean Baker, senior economist at the progressive Center for Economic and Policy Research, said Mr Biden is treading a careful path of celebrating his accomplishments without drawing too much attention to the defeats.

"He knows he's not going to get much through this Congress and it doesn't make sense to throw all these things out there that they're just going to ignore," he said. "I think he's just being realistic."


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