Joe Biden’s Economic Plan Explained
The estimated reading time for this post is 633 seconds
Seldom has an election garnered as many eyeballs and interest as the current one since it is happening when the American population has been deeply polarized. The Democrats have accused Republican President Donald J Trump of leading the citizens into an extra tax burden.
This has been the moot point of discussion amongst supporters of the 77-year-old former Vice President.
Though Joe Biden’s economic policies have not been as detailed as the others, he still has garner sizeable support though broad basing his arguments across the majority categories.
Let us look at the policy changes that the former vice-president wishes to implement if elected.
The Great American Middle Class
This has been a prime concern for all, mostly self-proclaimed Middle-class Joe. The cornerstone of the Republican drive has been to revitalize the American middle class.
There has been a contention that under the Trump administration, the middle class has been meted with step-motherly treatment. It has scarred them, as claimed by Joe Biden, to such an extent that a reset button is the only option left. The Democrats say that the Trump administration’s divisive policies have alienated the middle class, and the spirit of inclusiveness has been but destroyed.
In a rally which kicks started his campaign, he had thundered that the country was not built by Wall Street bankers and Hedge Fund Managers but by the great American middle class. However, trying to portray himself as a moderate with sensible economic views, he did defend the capitalists by absolving them of any misery being faced by the middle class. He had said that the rising equality was not the fault of 500 billionaires or anyone at the top and that they are not necessarily bad guys.
While this may have sounded like Bernie Sanders, Joe Biden’s ploy has always been to reach out to his constituency by creating an image of a person ready to take the long road towards solving challenges.
Joe Biden is an absolute believer in a prosperous middle class, which he feels holds the key to pushing the country forward. He wants to remove doubt amongst the young voters and make them believe in the great American dream again. A vast majority of young voters always voice their discontent with crony capitalism.
He wants to create an air of optimism and not phony populism, which he thinks, has engulfed the entire nation.
Pew Research states that as much as 52% of American adults’ total population was part of the middle-income household. This study was done in 2016. The median household incomes after adjusting for household size was two-thirds to double the national median.
The statistics further illustrate that the top 20% have fully recovered from the Great Recession, with the rest still struggling to overcome it.
Joe Biden has been quite vocal about regaining the middle class’ trust if the country has to move forward again. He accused Donald Trump of creating policies that excluded them and then threw them under the bus stating illusionary reasons.
“It is not an illusion that the middle class is in trouble. They are in.” has been the oft mentioned tirade.
While the middle class’s inclusivity and the taxation system is a major poll plank, the second most important on the list is Health Care.
Joe Biden has been quite vocal about his disappointment with the Trump Administration regarding Health Care. They are citing reports which suggest that the percentage of uninsured rose for the first time since 2008-2009. It struck 8.5% in 2018 from 7.9% in 2017. The Affordable Care Act that Biden states are the cornerstone of Health Care has been under attack from the Trump Administration. The Supreme Court will start hearing oral arguments on the future of Obamacare one week after the November election.
The incumbent, the former vice-president, says that though Donald Trump promises healthcare for all by ensuring that it is a right and not a privilege, the latter does not want Medicare. By eliminating private health insurance, it would mean that Obamacare, too, would lose its authority, and universal healthcare would become a pipedream. Donald Trump had argued his stand by saying that Medicare for all would cost approximately $30 trillion.
Joe Biden’s Health Care Plan covers 87% of the entire population and will only cost $750 billion over the next ten years. He also wants to expand the current Medicare in the form of a public health insurance scheme. This will be for those who cannot avail Medicare and making 138% below the approved poverty level.
The income gap of 400% will also be removed if ex VP Biden comes into power. It also entailed lowering employees’ contribution to 8.5%. However, he wouldn’t stop at this. There will be no out of network sudden fee hikes or even outlandish rates, drug manufacturers to be negotiated by Medicare for affordable drug pricing, creation of a review board that will take care of drug pricing, penalize those who will flout the law, support research and development for generic drugs and resume federal funding for planned parenthood.
The lowering of eligibility age from 65 to 60 is also on the cards once he comes to power. He said the probability of an American finding a job after the crisis ends remains low. This is a reality that everyone has to come to terms with. The Federal Reserve Chair, Jerome Powell, stated that millions of American workers would not return to the workforce after the pandemic.
Through his Health Care Plan, the basic idea of Joe Biden is to reduce the chances of overbearing medical costs on unemployed individuals. This is a hard reality that needs to be dealt with.
This is one of the fertile grounds of angst amongst most Americans, and Joe Biden has taken not of it. The current tax structure and the vision of the Trump Administration have been halfhearted and without much merit. Joe Biden would want to revert to the pro-growth, as he would love to call it, tax code. The current one, according to him, is not progressive at all.
He proposes to transfer 93% of the tax burden to the top 20% of households or those who are earning more than $170,000 annually.
However, ex-VP Biden does not stop there. The list to reinvigorate the economy are as follows:
- Profit earned from Foreign subsidiaries of US firms to be fixed at 21%
- For companies with annual earnings of $100 million, a minimum tax of 15% to be imposed.
- Corporate Income Tax to be increased to 28% from the current 21%
- For those earning more than $400,000 a year, a social security tax to be levied.
- The stepped-up basis loophole to be plugged immediately
- Unrealized gains at the time death to be taxed too
- The income tax to be increased from 37% to 39.6%
- Capital gains and dividends for those who earn more than $1 million to be taxed.
Student debt is a sentimental subject in the United States of America. Soon after Bernie Sanders left the fray, Joe Biden quickly announced the expansion of his student debt relief program. The first and foremost thing that would be done is to forgive student loans for those who earn less than $125,000 a year and have attended two- and four-year public colleges and universities or black colleges or minority-serving institutions perennially underfunded.
To accommodate this policy, Joe Biden intends to repel the high-income tax cut in the Cares Act.
He would do it since it benefits the wealthy Americans and does not serve the purpose it was intended to during the times of the pandemic.
There are several other proposals that the ex VP wants to implement once at the helm of things. Some of them are listed below:
- Immediate cancellation of a minimum of $10000 of student debt per student, though this is supposedly the idea of Senator Elizabeth Warren.
- Removal of the remainder of the tax after 20 years and elimination of any tax burden
- Monthly payments and interests for those earning less than $25000 annually will be suspended.
- Discretionary incomes to be capped at 5% for the rest who do not make a list in the above section
- Those participating in public service to have their loans waived to up to $50000 over five years
He has further bolstered Sander’s plan and has promised to make public colleges and Universities free for only those making less than $125,000 annually.
The process to streamline bankruptcy and easy to file is also going to be given adequate fillip once Joe Biden is voted to power. This program is titled d “Fixing Our Bankruptcy System to Give People a Second Chance,” and has a long term effect on just the students and professionals but the economy as a whole. The personal bankruptcy law, which Senator Warren planned initially, has found an able supporter in Joe Biden, who entirely agrees and endorses it. Reversing the course on personal bankruptcy will be a mulligan for vice-president Biden. He was a staunch proponent and voted for the stricter bankruptcy laws back in 2006.
The most important aspect of this bill is to increase the minimum federal wage to $15. Some of the planned proposals are:
- Provide workers with more bargaining power
- Getting rid of the non-competing clauses
- Eliminating clauses where employees cannot discuss pay with each other
- Preventing companies from designating low wage workers as managers to avoid paying them the requisite Overtime
- To look into i8ntyernational trade rules that would protect American workers and protect the environment.
- Labor standards to be improved
- Foster innovation amongst the middle-class
- Take on global challenges like Corruption and climate change.
Made in America: All of it
In his speech in July 2020, Joe Biden had proposed to spend $700 billion to bolster American innovation and engineering. Innovation is the key to growth, and his vision is to teach the same in every sphere of life. Of the above-mentioned amount, $400 billion to be spent on US goods and services and the rest on Research and Development. The focus of the R and D funding would be on frontier technologies like Electric Vehicles, Lightweight materials, Nanoscience, AI, and 5G.
His website has proclaimed that an American worker can outcompete for anyone but is never supported much by the government, and he intends to set the record straight. He believes in the American spirit, and the excuse that globalization and automation are eating into well-paying union jobs is simply a ruse for an incompetent administration. The vitality and spirit of American innovation have to be let loose.
Infrastructure and Climate Change
While being a Vice President, Joe Biden had once shamed New York’s La Guardia International Airport as a third world airport and had urged the need to improve infrastructure. He understands the efficacy of the first-world infrastructure, and the urgency to develop it is one of his prime objectives. He understands the need for more roads, better bridges, airports, and faster broadband speed. Infrastructure is no more a luxury in the speed-age but a necessity.
His plan is simple:
Total spend: $1.3 trillion over a decade
- Repairing of roads, highways, and bridges: $50 billion in the 1st year
- $20 billion on rural broadband Infrastructure
- $400 billion spread over ten years for research on Clean energy and innovation
- $5 billion on EV for the next 5 years
- $10 billion for 10 years for transit projects
On the Climate change front, Joe Biden will sign the Paris Agreement since he believes and agrees with the New Green Deal’s idea. He aims to achieve a carbon pollution-free power sector by 2035 and reaches net-zero emissions no later than 2050.
There will be a new Environmental and Climate Justice Division within the Justice Department that will have the authority to look after any violation of environmental laws and regulations.
He wants to link his climate change crusade with funding and research and development in clean technologies that will benefit the environment and create thousands of well-paying union jobs.
All this will require federal spending of $2 trillion.
There will be no ban on fracking, but no new oil fields and drilling activities will be allowed on federal land and offshore sites. Old oil fields will be plugged, and former mining sites reclaimed and restored.
The former VPs focus is firmed on rural America since it makes up 20% of the total population.
He wants fair trade deals for them as well as provide them with all modern amenities.
An investment of $20 billion would be pumped into the rural broadband program. At the same time, there are programs which will ensure more manufacturing jobs, agricultural research, improvement of access to more federal funds to augment and encourage entrepreneurship, expand the health services, which will also include health training programs and spend at least 10% of the federal program in areas which experience repeated poverty.
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