President Donald Trump added more turbulence to the United States election race by refusing to participate in the next presidential debate with Joe Biden after it was changed to a virtual event to guard against the spread of Covid-19, prompting both campaigns to propose postponing it a week. Even before his illness was announced, President Trump’s performance in the chaotic first debate with Biden prompted calls for a change in format. President Trump constantly interrupted and talked over both Biden and the moderator.
In any case, the person elected President of the United States in November 2020 will have a unique and challenging task which is managing the nation’s economic recovery after a global pandemic that caused unemployment to surge to levels not seen since the Great Depression. The IMF predicts the United States economic output will drop 8% this year after 2.3% GDP growth last year. The expectation is that once the virus containment measures are lifted and the virus is defeated, the economy will rebound sharply.
However, uncertainty related to the nature of the virus and the long wait for a vaccine or therapy have reduced the chances of a “V-shaped” recovery. The United States should be prepared for 18 months of rolling lockdowns as parts of the economy open and close, said Federal Reserve Bank of Minneapolis CEO and President Neel Kashkari. This means the economic agendas of the candidates are even more important during the 2020 election. The person with the more convincing plan for America could very well win. After all, President Franklin D. Roosevelt beat Herbert Hoover by a landslide in the 1932 presidential election because he promised “a new deal for the American people.”
Former Vice President Joe Biden has attacked President Donald Trump’s handling of the coronavirus efforts to date and released a seven-point plan of his own, which includes a nationwide mask mandate, more testing, ramping up personal protective equipment production, establishing a renewable fund for state and local governments, investing 25 billion dollar in a vaccine manufacturing and distribution plan, and fixing the country’s relationship with the World Health Organization (WHO). Joe Biden has also called for the next government stimulus and relief package to be larger than 2 trillion dollar and has said it should include much more aid for states and come with a higher degree of oversight. He claims there is none right now.
President Trump has signed four bills designed to offer relief to the American economy. The first bill, the Coronavirus Preparedness and Response Supplemental Appropriations Act was signed on March 6, 2020, and allocated 8.3 billion dollars to fund various efforts. The Families First Coronavirus Response Act was signed on March 18. On March 27, 2020, Trump signed the 2 trillion dollars CARES Act (Coronavirus Aid, Relief, and Economic Security). The fourth package, nicknamed Phase 3.5, was signed on April 24 and basically refunds programs created in the CARES Act with 484 billion dollars.
President Trump’s approval rating for April 1 to 14, 2020, was at 43%, according to Gallup. This was higher than his term average, but it dipped from a peak of 49% reached just a month before between March 13 to 22, 2020. If he loses later this year, he will be the first president since George Bush Sr. to not secure a second term.
Below is a comparison of the economic policies of President Donald Trump and Democratic nominee, Joe Biden sector by sector. Joe Biden produced his Economic Plan – “Save the Middle Class to Save America”. President Trump has provided few details for his plans for the economy during his second term outside of the 2021 budget proposal released in February 2020, before the COVID 19 pandemic’s impact was fully known.
Regarding the infrastructure sector, President Trump, who campaigned on the promise of rebuilding America, has long sought an infrastructure bill. There appears to be bipartisan support for such a bill. He recently said he wanted a 2 trillion dollars “very big and bold” plan, as part of the next Congressional coronavirus relief package.
Joe Biden on his part, has released a 10-year,1.3 trillion dollars infrastructure plan as part of his election campaign. He says his plan will move the United States to net-zero greenhouse gas emissions and create jobs to expand the middle class. The spending includes 400 billion dollars on a new federal program for clean energy research and innovation, 100 billion dollars to modernize schools, 50 billion dollars on repairing roads, bridges and highways in his first year in office, 20 billion dollars on rural broadband infrastructure, and 10 billion dollars for transit projects that serve high-poverty areas with limited transportation options.
Concerning Taxes, in the budget proposal from February 2020, the Trump administration assumed individual income tax provisions included in the massive Tax Cuts and Jobs Act and set to expire in 2025, will be extended. Between 2025 and 2030, these tax cuts will cost the federal government $1.5 trillion, according to the Committee for a Responsible Federal Budget. The budget also proposes repealing renewable energy tax credits, offering tax credits for United States education secretary Betsy DeVos’ Education Freedom Scholarship program, and raising the Internal Revenue Service (IRS) budget by about $15 billion over a decade.
Joe Biden on the other hand wants to raise the top income tax rate back to 39.6% from 37% and the top corporate income tax rate to 28% from 21%. If elected, he will apply Social Security taxes to earnings above $400,000, tax capital gains and dividends at ordinary rates for those with annual incomes of more than $1 million and impose 15% minimum tax on book income of large companies. The tax rate on profits earned by foreign subsidiaries of United States firms will be doubled to 21%. According to the Tax Policy Center, Biden’s tax proposals will increase revenue by $4 trillion between 2021 and 2030. It estimated that 93% of the tax increases would be borne by taxpayers in the top 20% of households by income. The top 1% of households would pay three-quarters of the tax hike.
Health Care is one of the most crucial policy issues both for President Trump as well as his contender, Joe Biden. In the 2021 budget proposal, the Trump administration has proposed deep health care spending cuts over the next decade, especially to Medicaid ($900 billion) and Medicare ($450 billion). It requests $94.5 billion for the Department of Health and Human Services, a 10% decrease from the 2020 enacted level. President Trump has repeatedly promised to bring down drug prices, but we haven’t seen significant results so far.
Regarding this issue, Joe Biden doesn’t miss an opportunity to mention he was next to President Obama when the Affordable Care Act was signed into law and has vowed to protect and expand it. He says he will eliminate the 400% income cap on tax credit eligibility and lower the limit on the cost of coverage to 8.5% of income. Instead of Medicare for All as suggested by his more progressive rivals, Biden wants to create a public health insurance option like it. He also wants to lower the eligibility age for Medicare to 60 from 65.
Joe Biden’s campaign has said his plan will insure more than an estimated 97% of Americans and cost $750 billion over a decade. It will be paid for through revenue from his capital gains reform. The cost estimation, however, was provided by the campaign last year, before expanding Medicare access to younger people was suggested.
To be continued, …….