"Build back better", Joe Biden's economic program
Joe Biden, 46th President of the United States, begins his term in difficult economic, health and social conditions. The news is, however, better politically. Already assured of a majority in the House of Representatives, the Democrats gained control of the Senate on the wire. Democrats and Republicans each with 50 seats, the majority in the Senate goes to the “donkey party” thanks to Vice-President Kamala Harris, President ex officio of the Upper House.
Democratic domination in both Chambers, at least acquired until the midterm elections, authorizes the new administration to take measures with significant budgetary and fiscal consequences. So a huge $ 1.9 trillion stimulus package should be passed quickly. In the process, the economic program developed by Joe Biden during his campaign could be implemented, while avoiding decisions that would risk further dividing a country that the new president has set himself the task of reconciling.
Produce in the United States in compliance with reinforced environmental standards
The priority of Joe Biden's "Build Back Better" program is to increase manufacturing output and employment in the United States.
This concern joins that of his predecessor Donald Trump, to whom it allowed to justify both the environmental deregulation measures and the customs duties imposed on Europe and China. It is on the method that the two presidents differ. Joe Biden is indeed considering reviving the American industry through an investment plan in sectors linked to new technologies, from electric cars to 5G.
700 billion dollars in aid are planned over the next four years: 300 billion dedicated to research and development and 400 billion to public purchases of products "made in the USA", in particular electric cars. The Democratic program also sets itself the goal of creating a million additional jobs in an automobile industry that would move away from the use of fossil fuels to be part of the prospect of a zero-emissions US economy. net by 2050.
To support his reforms in favor of the environment, Joe Biden has already announced his desire to reintegrate the United States within the framework of the Paris Agreements. Anxious to avoid too great a shock to the economic activity of certain States particularly affected by the oil and gas industry, it does not intend to ban hydraulic fracturing immediately. But the planned strengthening of the regulations aimed at limiting the discharges of methane and other pollutants generated by this extraction method will inevitably reduce the profitability of an industry already undermined by the fall in the price of oil due to the health crisis. .
Joe Biden does not seem ready to abandon the economic and trade battle waged by Donald Trump against China. The tariff increases put in place by its predecessor will therefore not be canceled immediately. This battle should however move, both in form and in substance. Instead of taking unilateral action that would immediately be followed by costly retaliation, the president intends to re-engage in the World Trade Organization and use this international lever to pressure China to meet international standards. It is precisely by negotiating to obtain stricter international standards in terms of labor law and the environment that Joe Biden shows the desire to protect Americans' jobs against imports from low-cost countries.
Domestically, still with a view to reviving American manufacturing production, Joe Biden's program provides for a system of relocation tax and relocation subsidy in the form of a tax credit.
Renovate infrastructure
The Democratic program includes a vast infrastructure renovation plan, planned to be spread over a decade. It concerns a large number of areas, including the road network, rail transport, sanitation networks, the Internet network and energy distribution, including in particular the installation of 500,000 charging stations for electric vehicles.
All these renovations would be an opportunity to orient the American economy in the direction of the development of new technologies and clean energies. In terms of roads and bridges alone, $ 50 billion in spending is planned for the first year of Joe Biden's tenure alone.
Protect families and workers
Joe Biden's economic program includes a large number of measures in favor of the poorest to the middle classes. The first step is to broaden the scope of health insurance for all. While nearly 10% of Americans have no coverage in 2019, a figure up from 2018, the new president would like to achieve a coverage rate of 97%. Without specifying the terms yet, it also intends to tackle the price of drugs, deemed too high due to the weak competition that exists in the pharmaceutical industry.
To protect the most precarious workers, Joe Biden plans to increase the federal minimum wage to $ 15 an hour by 2025. He also wants to fight against anything that limits the right of workers to organize by supporting a law which protects union members against unfair dismissals and by putting in place sanctions against companies which would classify under the status of auto-entrepreneur those who are, in fact, their employees. He defends the principle of collective bargaining to enable workers to obtain better pay and employment conditions.
The new president also wants to tackle the inequalities suffered by women and racial minorities in the labor market. Its plan includes specific support for small businesses run by women and / or people from minorities, which could benefit as a priority from the $ 400 billion in public purchases of “made in USA” products provided for in the plan. revival of manufacturing production; the promotion of women and persons from minorities when recruiting for key positions in federal agencies; and the revaluation of salaries in the sectors, particularly feminized, of education and early childhood.
Increase taxes to finance reforms
Such an ambitious stimulus plan obviously requires releasing considerable financing capacity and, therefore, increasing taxation in the face of Republicans opposed to any tax hike. Joe Biden wishes in particular to return to a large part of the tax cuts granted by Donald Trump, cuts that have primarily benefited the richest.
Its program notably plans to raise the corporate tax rate from 21% to 28% and to tax at 21% the profits made by American companies in their subsidiaries abroad. Regarding households, he plans to raise the top tax rate from 37% to 39.6% and, for income over $ 1 million, to tax capital gains and dividends at the same rate as other income. A tax levied on annual salaries over $ 400,000 per year would help fund health insurance. Under these conditions, the Tax Policy Center estimates that 93% of the additional tax burden would rest on the richest 20% of households and 75% on the richest 1%.
Despite the Democratic Party's control over Congress, the Biden administration will need to discuss the implementation of its economic agenda with the Republicans, so as not to risk aggravating the deep divisions that cross American society.
