NEW YORK: President-elect Joe Biden, a champion of green energy and a higher minimum wage, could prove to be a game-changer for some US businesses.
How far-reaching the new administration’s reforms can be, however, will depend largely on who controls the Senate, and that outcome will not be decided until January 5 after two run-off elections in Georgia.
President Donald Trump has shaken up US trade relations, imposing steep tariffs on hundreds of billions of dollars’ worth of goods, sparking retaliation from trading partners and pushing prices higher. While he is likely to be more predictable than the current occupant of the White House who changes policy by tweet, Biden’s trade policy stance will not necessarily change much.
He has said some tariffs are justified, like those on Chinese steel, but any easing of tensions with China, a key market for many sectors, could be favorable to companies like Boeing. Biden wants to impose a tax on companies relocating jobs overseas, to help boost US manufacturing jobs.
Many companies benefited from President Donald Trump’s 2017 tax overhaul, which lowered the corporate tax rate to 21 percent from 35 percent. Biden has proposed raising the corporate rate to 28 percent. The plan also calls for a minimum tax on corporations making $100 million or more, while Biden and Vice President-elect Kamala Harris have expressed support for a financial transaction tax, a small fee on equity and debt trading.
The new administration is also expected restore power to the Consumer Financial Protection Bureau (CFPB), an independent agency created after the 2008 global financial crisis to defend consumers against predatory loans and credit card policies, after Trump defanged the agency.
The new president has pledged to rejoin the Paris Climate Accord and reach net zero emissions by 2050, including carbon-free electricity production by 2035, phasing out coal. He has said he would not issue new permits to drill for oil and gas on state-owned land and offshore. But he would not ban the controversial technique of hydraulic fracturing or “fracking” to produce of shale oil and gas, only blocking new permits on state-owned land.
Biden wants to invest $2 trillion over four years for renewable energy, clean transportation, construction and infrastructure, which also will spur green industry jobs. His plan also calls for new emissions standards for fuel-powered vehicles, which still constitute the vast majority of cars sold in the United States.
Job one is getting the Covid-19 pandemic under control. That goal got a boost Monday with good news on a vaccine from Pfizer and BioNTech. But Biden also will have to take steps to shore up the American economy, as businesses continue to struggle and millions are jobless. Focus will turn to a new economic rescue program to replace the $2.2 CARES Act approved in March, but the size and scope will depend on whether Republicans or Democrats control of the Senate. Biden has named a task force to launch the anti-coronavirus strategy starting January 20. With infections surging, that could mean more restrictions on restaurants, shops, entertainment venues and airlines.
Biden, who served as vice president under former president Barack Obama, wants to expand that administration’s signature health care reform, which provided insurance to millions of Americans. Trump has been trying to gut it for the past four years despite its popularity. A key feature would be to provide a public health insurance option like Medicare, which is offered to the elderly.
The new president also plans several measures to lower prescription drug prices, for example by allowing Medicare to negotiate prices or by allowing patients to order medicines abroad.
Biden pledged to increase the minimum wage to $15 an hour, which would increase the purchasing power of low-wage workers but would eat into the profits of certain businesses, particularly in restaurants, where servers, who rely on tips, are paid less the minimum wage.
Biden has pledged to decriminalize cannabis use as part of a reform of the penal system. He indicated his preference for federal decriminalization of medical marijuana, but not full legalization. – AFP