Joe Biden Elected President, Will Set Financial Policy for Next Four Years
After several days of counting votes, Democratic presidential candidate Joe Biden unseated incumbent President Donald Trump and is thus set to become the next president of the United States on January 20, 2021. He reached the required 270 electoral vote threshold when he won Pennsylvania, leading the Associated Press and a wide array of other outlets to declare him the winner. Over the next four years, his administration will have substantial power to shape financial policies and advance progressive banking ideas, but he likely will have to grapple with a divided Congress.
When he takes office, President Biden will inherit an economy that has been deeply affected by the COVID-19 pandemic, with 22 million jobs lost and more than 235,000 deaths. The pandemic caused an unemployment rate of almost 15 percent in April, and despite some of those jobs returning over the past several months, it remains near seven percent today.
Some of Biden’s plans to address the pandemic include free testing for those who need it, relief or forbearance of federal student loans and mortgages, and interest-free loans for small businesses. His plans also include full, emergency paid leave for sick or gig economy workers and fully-staffed task forces to minimize the threat of infectious diseases in the future.
One of the key areas where Biden will dramatically impact U.S. financial services is a “Made in All of America” campaign that would move toward cleaner energy and protect the Affordable Care Act, according to Marketplace. This vision would also strengthen domestic manufacturing and private and public sector unions by creating at least 5 million new jobs in innovation and manufacturing.
The President-elect’s tax plan is to raise taxes on Americans making more than $400,000 and on foreign profits. A Penn Wharton Budget Model projection found that the plan would raise $3.375 trillion in additional tax revenue and decrease federal debt by 6.1 percent.
Biden has also proposed investing $640 billion in affordable housing and plans to establish a refundable tax credit of up to $15,000 for first-home buyers. Concerning education, he plans to help Americans “join or maintain their place in the middle class” and provide 100 percent loan forgiveness for students that have responsibly made payments after 20 years.
This week, President-elect Biden has started to announce key hires for his administration and transition team, including Ron Klain as his Chief of Staff. He also announced a slate of advisors for his transition who will serve on Agency Review Teams and will be responsible for “understanding the operations of each agency, ensuring a smooth transfer of power, and preparing for President-elect Biden and Vice President-elect Harris and their cabinet to hit the ground running on Day One.”
Notably, his Agency Review Team for the Consumer Financial Protection Bureau (CFPB) will be led by Leandra English, the Bureau’s former deputy director who also served as former Director Richard Cordray’s Chief of Staff. Don Graves, Head of Corporate Responsibility and Community Relations at KeyBank will lead the team for the Department of the Treasury and MIT’s Gary Gensler will head the Federal Reserve, Banking, and Securities Regulators group, overseeing the CFTC, FDIC, Federal Reserve, NCUA, and SEC.