Joe Biden’s promises on the economy: A closer look

Seeking to move past the divisions of Donald Trump’s presidency, Joe Biden is promoting unity — and his economic agenda reflects that, weaving together elements of pro-labor populism, investment in business, policies to promote public infrastructure and human capital, and targeted increases in economic regulation.

Biden has emphasized that he wants support from both parties for his proposals to kick-start the economy. "Look folks, we’re going to bring the Republicans and Democrats together, and deliver economic relief for working families, and schools, and businesses; I promise you," Biden said at an Oct. 30 rally in Milwaukee.

But he faces challenges in winning support across the spectrum, experts say. 

"The very narrow Democratic majorities in the House and Senate will make big policy changes difficult for Biden," said Daniel Mitchell, a conservative economist with decades of experience in Washington. "Republicans were big spenders under Trump, but they'll dust off their fiscal conservatism rhetoric with Biden in the White House. And I assume Republicans will be strongly opposed to tax increases. That won't stop Democrats if they can maintain total unity, but that remains to be seen."

Biden also faces the challenge of addressing the coronavirus, which is likely a prerequisite for a full economic recovery.

As we did for Barack Obama and Donald Trump, PolitiFact will be tracking the progress, or lack of progress, on a cross-section of Biden’s campaign promises.

We’ve grouped Biden’s promises on the economy into a few broad categories in order to shed some light on the different principles that inform his policy proposals.

There’s a strain of economic populism in some of Biden’s promises. He would increase the federal minimum wage to $15 an hour, make union organizing easier for workers, and end pay discrimination by making it easier for employees to challenge discriminatory pay practices and hold employers accountable.

Gary Burtless, an economist at the Brookings Institution, said as long as the $15 minimum wage is phased in over a few years, it would probably have a decent chance of being enacted, given the historical popularity of minimum wage hikes. Overhauling laws on labor unions would be a tougher sell, he said, given near-universal opposition among Republicans.

Populist themes can be detected in Biden’s tax proposals as well. He would rule out tax increases for anyone making less than $400,000 and would raise the corporate tax rate to 28%.

This tax proposal is "bold," said Kyle Pomerleau, a resident fellow at the American Enterprise Institute. "It would raise a ton of new federal revenue, and the vast majority of it would come from high-income households. It certainly goes further than Obama did and further than what Hillary Clinton ran on in 2016."

While raising taxes on richer Americans is generally popular, the idea will likely provoke strong Republican opposition.

"There will be unanimous, or near-unanimous, GOP opposition to the tax increases," Mitchell said. That could make passage difficult.

Populism can also be seen in his proposals to award federal contracts to companies that make all products in the U.S., to tighten "Made In America" rules, to change the tax code so that pharmaceutical production stays in the United States, and establish a tax penalty for "offshoring," or moving production by a U.S. company overseas.

Finally, to aid retired Americans, Biden would expand and raise Social Security benefits and put Social Security on a path to long-run solvency.

The solvency promise is harder to enact — and even for Biden to push for — since the possible remedies could include a hike in the payroll tax or the income tax on benefit payments, Burtless said. Neither option is politically popular and both would attract fierce Republican opposition. Another option would be phased-in benefit cuts for people retiring after a certain year, but that could be unpopular as well.

Biden directed some promises at businesses, rather than just workers.

Biden singled out the auto industry for federal attention, saying he wanted to create 1 million auto industry jobs, particularly jobs connected to clean energy, though details were spotty. He also pledged to give small businesses a "restart package" for pandemic-related reopening, with special attention to items like Plexiglas and protective equipment for workers.

He’s also devoting attention to broader infrastructure as a platform for future economic growth, pledging to develop secure private-sector-led 5G networks.

Some of Biden’s most extensive proposals address the issue of workforce development.

One cluster of promises focuses on education. Biden would forgive student loan debt from public colleges and universities for those earning up to $125,000. He would also make public colleges and universities tuition-free for families below that income cutoff. Biden would double the value of Pell Grants and would make two years of community college or two years of a high-quality training program tuition-free, including for part-time students and young adults who came to U.S. as children and are now covered by the Deferred Action for Childhood Arrivals.

Another cluster of promises addresses ways to enable more Americans to continue working. Biden would guarantee up to 12 weeks paid family and medical leave for all workers and up to seven days of paid sick, family, and safe leave. He would also offer a tax credit of up to $8,000 for child care.

Two proposed regulations could have an impact on economic activity if they are implemented.

One would create a public credit reporting agency within the Consumer Financial Protection Bureau that would take a different approach from private credit agencies in ways that "minimize racial disparities."

Another would block new fracking on federal lands, but not ban all fracking. This became an issue during the presidential campaign, when Trump and his allies mischaracterized Biden’s position as favoring a ban on all fracking.

Overall, Biden faces a dilemma, said Robert E. Scott, a senior economist at the left-of-center Economic Policy Institute.

Scott described Biden’s agenda as "broadly progressive," especially when paired with the $1.9 trillion coronavirus and economic relief proposal he has released. But its chances of enactment would fall if Biden is serious about securing bipartisan support, he said. 

"That was Obama’s approach in 2009, for which he paid a heavy price," Scott said, referring to the 2009 American Recovery and Reinvestment Act that was designed to spur the bounceback from the Great Recession.

The 2009 bill, "although effective, was smaller than necessary — a decision made to obtain initial bipartisan support," Scott said. "Under McConnell, the Senate majority will likely do everything in its power to obstruct Biden’s legislative agenda."