After months on hold responding to the COVID-19 pandemic, the 2020 US elections are heating up, as Democrats seek to take control of the White House from President Donald Trump. On Thursday, July 9, former Vice President and presumptive Democratic presidential nominee Joe Biden released a broad economic plan during a speech in Dunmore, Pennsylvania.
The plan looks beyond the immediate post-COVID-19 recovery and charts a four year path for creating 5 million new jobs. The $700 billion plan rests on three pillars:
- Using the spending power of the federal government to transform American manufacturing and technology
- Expanding research and development initiatives
- Tightening “Buy American” laws designed to support American firms
In particular, Vice President Biden calls for a $400 billion increase in government purchasing of American goods and services over the next four years to “modernize our infrastructure, replenish our critical stockpiles, and enhance national security,” plus $300 billion in research and development initiatives focused on artificial intelligence (AI), clean energy, and biotechnology. Government procurement would likely focus on clean vehicles and clean energy; PPE; infrastructure materials, namely steel products; and telecommunications. He pledged to create “millions of well-paying union jobs” through supporting clean energy infrastructure, with a renewed focus on low-income and other vulnerable communities. Jake Sullivan, a top policy adviser and likely candidate for National Security Advisor, said the plan “will be the largest mobilization of public investments in procurement, infrastructure, and R&D since World War II.” The plan also focuses heavily on labor protections and re-emphasizes Vice President Biden’s plans to strengthen workers’ collective bargaining rights.
During his speech, Vice President Biden argued for additional taxes on large corporations, namely through raising the corporate income tax from 21% to 28%. To support the middle class, he said he would be rolling out plans for a “twenty first century caregiving and education work force.” He also advocated for additional funding for Title I schools, providing schooling for children under 5, and increasing teacher salaries.
Regarding trade, the plan promises to strengthen American markets before engaging in new trade deals abroad. To support domestic manufacturing, Vice President Biden offered a proposal to “double the tax on foreign profits” in order to entice companies to produce domestically. Many of the domestic expenditures are designed to explicitly target China’s role in American supply chains, with the plan calling for using federal spending to “stand up to the Chinese government’s abuses, insist on fair trade, and extend opportunity to all Americans.” He highlighted plans to address unfair trade practices and intellectual property theft. Vice President Biden also touched upon healthcare costs and attempts to eliminate the Affordable Care Act, systemic racism, and the need for police reform.
Over the coming weeks, Vice President Biden’s top surrogates and most of his former Democratic primary challengers will begin publicizing and praising the plan in media appearances across the country. We continue to closely monitor the platforms and statements of both Presidential candidates and assess the practical implications for businesses and others with vested interests. The stakes are high, regardless of who Americans elect as their president in November.