What Are President Biden’s Economic Plans and Policies?

Joseph Robinette Biden is the 46th president of the United States, with a term from January 2021 to January 2025. The most immediate priority for his economic plan is to combat the COVID-19 pandemic and the recession it's caused. Biden signed the $1.9 trillion American Rescue Plan Act into law on March 11, 2021.

Biden also plans to overhaul the nation’s embattled healthcare system and address the global climate crisis. He has outlined policies for education, immigration, and housing, as well as taxes, infrastructure, and trade. These are the specifics of each category that he and Vice President Kamala Harris plan to tackle during Biden's presidency.

The Pandemic Response

Biden's "National Strategy for the COVID-19 Response and Pandemic Preparedness"—released on January 21, 2021, the day after he was sworn in as president—is guided primarily by recommendations issued by the Centers for Disease Control and Prevention (CDC).

Biden implemented some components with executive orders and presidential memorandums focused on the pandemic within his first few days in office, but increased spending requires congressional approval before it can be put into action. This included Biden's $1.9 trillion American Rescue Plan to fight the coronavirus. The plan included $160 billion to expand vaccine manufacturing and distribution, $170 billion to help schools reopen safely, and $25 billion for childcare providers.

Biden encouraged federal agencies to use the Defense Production Act to produce more personal protective equipment (PPE) to protect essential workers and school personnel from COVID-19. He campaigned on the creation of a Pandemic Testing Board, which would coordinate testing distribution, and a Public Health Jobs Corps, which would mobilize 100,000 people to do contact tracing.

The American Rescue Plan Act expanded sick and family medical leave for anyone who contracted the virus or stayed home to care for ill family members. The goal was that disease transmission would be reduced by allowing sick employees to stay home. At the same time, the government would reimburse employers who pay out COVID-19 sick leave for up to 14 days.

Recession Recovery and Jobs Creation

On January 25, 2021, Biden signed an executive order aimed at requiring the federal government to purchase more goods produced in the U.S., as promised in his "Buy American" plan.

The plan would allocate $400 billion to buy U.S. products and services, with an additional $300 billion over four years going toward research and development. A portion of the funds would target clean energy, aimed at creating jobs and securing U.S. industry leadership. Biden's campaign claimed that the plan would be the largest of its kind since World War II.

The American Rescue Plan sent $1,400-per-person checks to qualifying households, in addition to the previous stimulus payments approved by Congress in 2020. More than one million of the hardest-hit small businesses could take advantage of $15 billion in grants.

The plan also provided $350 billion to state and local governments, $20 billion to tribal governments, and $20 billion to support public transit in an effort to better support front-line workers, ensuring that they're on the job and paid.

The plan also increased SNAP benefits by 15% through September 2021 to keep hunger at bay. The eviction and foreclosure moratorium was also extended through September, and renters and small landlords would receive $30 billion in aid.

Democratic lawmakers introduced The Raise the Wage Act of 2021, the first step in Biden's plan to more than double the federal minimum wage to $15, on January 27, 2021. It would initially raise the $7.25 minimum wage to $9.50 per hour if approved by the Senate, with increases scheduled each year through 2025. The bill is meant to spur economic growth by giving workers more to spend, increasing business revenue.

Healthcare Reforms

Biden would lower premiums for insurance provided by the Affordable Care Act (ACA) to expand coverage for more middle-income families. He also would create a universal healthcare option available to anyone who wanted or needed it.

No one on a publicly sponsored health plan would pay more than 8.5% of their income for health insurance under Biden's proposal. Qualified residents of the states that didn’t expand Medicaid could also sign up for the universal health plan for free.

Biden has also promised to:

• Increase federal support of Medicaid
• Lower eligibility for Medicare to age 60

Climate Change Measures

Biden has rescinded some Trump-era orders that weakened the nation's environmental regulations. Biden made it clear he would treat climate change as a national security priority. He paused oil and gas leasing in the Arctic and revoked the Keystone XL oil pipeline permit.

Biden also led the United States to rejoin the Paris Agreement, from which President Trump had withdrawn in June 2017.

Biden’s “Clean Energy Revolution” would invest $2 trillion and create millions of jobs to combat the climate crisis. It would also:

• Achieve net-zero emissions by 2050
• Spend $400 billion annually on clean energy research and innovation
• Double offshore wind production by 2030
• Reduce the carbon footprint in the power sector by 50% by 2035
• Add 500,000 electric vehicle charging stations by 2030
• Restore the electric vehicle tax credit

Education Proposals

Biden paused federal student loan payments, and he kept the interest rate at 0%. The pause on payments has been extended again to August 31, 2022. He ordered federal agencies to use CDC guidelines to advise states on how to reopen schools and early-childhood-education providers. Biden's plan clarifies a coordinated response from federal and local entities on how low community infection rates need to be before schools can reopen, and which practices to enforce to keep them open.

Biden wants to start "investing in our children at birth" and plans to do so by increasing federal funding for K-12 education. Specifically, he would triple Title I funding to raise teachers' pay. Title I funds schools serve a significant number of low-income families.

Biden also plans to double the number of health workers in schools, with a specific focus on mental health. There would be universal pre-kindergarten for all three- and four-year-old children in an effort to lower the financial and emotional burden on parents across the country.

Biden would make community colleges and public universities free for families with annual incomes below $125,000 in an effort to lower the cost of higher education. He would invest $8 billion in community college facilities and $50 billion in workforce training.

Immigration Changes

Biden’s proposals would reverse most of Trump's immigration policies.

On his first day in office, Biden rescinded Trump's immigration ban affecting primarily Muslim and African countries. He ordered the Domestic Policy Council (DPC) to expedite the naturalization process and restore trust in the immigration system on February 2, 2021. He asked that the DPC create a Task Force on New Americans to include members of agencies that can implement policies impacting immigrant communities.

Biden ended Trump's declaration of a state of national emergency at the border with Mexico and halted the construction of the border wall. The U.S. would no longer separate families at the border under the Biden administration. Biden established the Interagency Task Force on the Reunification of Families on February 2, 2021, to reunite children separated from their families during the previous administration.

Biden's U.S. Citizenship Act is focused on modernizing the entire immigration system. It would provide a road map to citizenship for undocumented immigrants who pay taxes and pass background checks. This includes protection for participants in the Deferred Action for Childhood Arrivals program (DACA).

Biden promised to raise annual refugee admissions to 125,000 from its record low of 22,405 in 2018.

Affordable Housing Plans

On January 26, 2021, Biden ordered the U.S. Department of Housing and Urban Development (HUD) to restore the agency's adherence to the Fair Housing Act. It had been weakened by prior executive actions.

Biden plans to make $640 billion available over 10 years to provide affordable, safe housing for individuals of all races, cultures, and backgrounds. Of that, $100 billion would set up an Affordable Housing Fund to build new housing and improve existing housing.

Specifically, Biden would:

• Spend $13 billion to build 400,000 units for the homeless through Congresswoman Maxine Waters's Ending Homelessness Act
• Expand the Low-Income Housing Tax Credit by $10 billion
• Add $10 billion to Community Development Block Grants
• Fully fund Section 8 rental assistance
• Commit $5 billion per year for a tax credit for low-income renters

Taxes

The Tax Foundation estimates that Biden's tax plan would increase federal revenue by $3.3 trillion over 10 years by increasing taxes for corporations and high-income filers.

Specifically, Biden would impose a 12.4% Social Security payroll tax for those making more than $400,000 per year. He would repeal the Tax Cuts and Jobs Act (TCJA) for high-income filers, restoring tax rates to 2016 levels. He would increase the corporate tax rate to 28%. Biden would also raise taxes on long-term capital gains and dividend income above $1 million to the 39.6% income tax rate.

Biden would increase tax deductions or credits for senior workers, families with children, and first-time homebuyers. The American Rescue Plan increases the Child Tax Credit (CTC), as well as the Earned Income Tax Credit (EITC) for childless workers, for at least one year. The plan expands tax credits for child care expenses as well.

Infrastructure Rebuilding

The Bipartisan Infrastructure Bill (Infrastructure Investment and Jobs Act) was passed in November 2021. Its goals are to "rebuild America’s roads, bridges and rails, expand access to clean drinking water, ensure every American has access to high-speed internet, tackle the climate crisis, advance environmental justice, and invest in communities that have too often been left behind."

Biden's "Build Back Better" plan was intended to "create millions of good-paying jobs, enable more Americans to join and remain in the labor force, spur long-term growth, reduce price pressures and set the United States on course to meet its clean energy ambitions." However, the bill was unable to garner the necessary support from Congress to pass in December 2021.

Trade Agreements

Biden would invest $300 billion to restore America's leadership in critical technologies. He's focused on clean energy, artificial intelligence, and electric vehicle battery technology. Biden would work with U.S. allies to present a united front in trade disputes with China instead of imposing tariffs.

Frequently Asked Questions (FAQs)