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oe Biden hopes aggressive spending will revive a pandemic-battered economy and offset any negative impacts from new taxes and regulations. Much depends, however, on which side controls the Senate.
“With such high unemployment, low inflation and zero interest rates, Biden’s proposal to go big on government investment will get us back to full employment fastest,” Mark Zandi, chief economist of Moody’s, tells USA Today.
The new administration’s initial priorities are expected to be containing the pandemic and its fallout on businesses. Longer term, major investments in infrastructure and public transit, clean energy, mobilizing American manufacturing and innovation and other areas will be intended to drive economic output, generate millions of jobs and upskill workers to support future growth.
Moody’s predicts the economy will expand on average 3.8 percent a year, creating 14.1 million new jobs, over Mr. Biden’s four-year term should the Democrats manage to take control of the Senate. Growth is projected to slow to an average 3.5 percent, with 11.6 million jobs created, if Republicans remain in power.
Republicans have the edge to keep control of the Senate and are expected to stymie any massive fiscal stimulus efforts. A more conservative judiciary may thwart executive actions and those by regulatory agencies.
Republicans and many business groups are expected to strongly oppose moves to raise corporate taxes, increase environmental regulations and institute pro-labor policies, such as a $15 federal minimum wage.
A Wall Street Journal report noted that many business leaders are hoping the new administration will work more closely with other countries on issues such as climate change, the pandemic and trade. The 46th president, with his centrist roots, could deliver a more stable business environment.
Greg Ip wrote for the Journal, “In all, a Biden presidency will be slightly less hospitable to business than Mr. Trump’s but also more predictable and, many business leaders hope, boring.”
Finally, many hope Mr. Biden’s unifying message will ease social tensions and elevate the country’s mood. “Now is the time to come together and unite around the substantial challenges we face and for the betterment of our country,” Matthew Shay, president and CEO of the National Retail Federation, said in a statement.
Brian Dodge, president of the Retail Industry Leaders Association said, “Leading retailers are ready to work with Congress and the next Administration to defeat COVID-19 and restore economic prosperity for the millions of Americans whose lives and livelihoods have been upended this year.”
By: Tom Ryan