Much of the optimism about a new American president has been doused by the grim reality that new COVID-19 variants are infecting the country. Another round of stay-at-home shutdowns could be coming as COVID-19 infections spiral upward to nightmarish new levels. That could delay a full reopening of the economy for several more months or longer. Meanwhile, small business closings could continue at a crushing pace, and high unemployment will hamper consumer spending.
President Joe Biden’s policies will have an immediate effect on certain US industries. Some of these sectors will feel the impact by necessity, like the pharmaceutical industry faced with the herculean task of producing and distributing enormous volumes of their new coronavirus vaccines. Others are industries that a Democratic president would historically tend to favor, like childcare or green energy.
President Biden’s first move on the economy has been to propose another new economic stimulus plan, barely a month after the most recent stimulus plan passed. It’s still just a proposal that has not even been introduced to Congress, but it lets us know how Biden wants to tackle problems facing every industry.
The Associated Press reports that Biden’s $1.9 trillion “American Rescue Plan” is both an economic relief plan and a COVID-19 plan, with about $1 trillion of that going to economic stimulus. This plan includes another stimulus check of $1,400 for most Americans, on top of the $600 stimulus check from the previous stimulus plan. It would also enhance unemployment benefits and extend some eviction protections.
CNBC adds the plan includes $15 billion in small business grants plus another $35 billion for various other financing programs for small businesses. That amount is in addition to the new round of PPP loans that just started being offered.
We cannot be certain that Biden’s plans will pass Congress in their proposed form. But there are some things we can be certain of.
Taxes also affect everyone and everyone’s business or place of employment. CNBC reports that Biden has announced plans to raise taxes on households that make more than a combined $400,000 and raise the corporate tax rate to the 28% level (where it was before the Trump tax cuts).
Biden insists his tax cuts would not affect any households that earn less than $400,000 a year. But anyone who remembers George Bush’s 1988 “Read my lips, no new taxes” pledge knows that campaign promises are not necessarily binding. Biden almost surely will try to raise taxes on corporations and the wealthiest households but says for now that the middle class will not see any tax raises.
The healthcare industry is poised to receive billions in grants—but of course with the expectation that they save as many lives as possible during the pandemic. Most significantly, the Biden administration just bought another 200 million vaccine doses to distribute to the states.
According to Business Insider, the proposed American Rescue Plan also includes $50 billion toward expanded testing and another $20 billion toward building more vaccination sites. This comes as states and pharmaceutical companies are already experiencing supply chain and distribution problems, just like grocery stores had with their empty shelves early in the pandemic.
The vaccine may not be distributed as smoothly as hoped, but that could change quickly with the surge of new doses. We know that the coronavirus will change our healthcare system forever, and we’ve already seen massive government healthcare subsidies in the early days of the Biden presidency.
The tech industry matters a lot more than usual right now, simply because we are so dependent on work-from-home at the moment. Stuck-at-home orders will eventually end, but there is currently no end in sight, so tech industry policy means a great deal right now.
When it comes to political parties’ feelings about the tech industry, The Hustle sums it up pretty well. “Republicans want to prosecute Big Tech for abusing market power,” the site says. “Democrats want to make it harder for Big Tech to acquire smaller companies.”
Bloomberg Law points out that Biden will be tougher on Amazon, Apple, Facebook, and Google—he even complained about their “overwhelming arrogance” in a New York Times interview. He’s expected to use antitrust lawsuits and merger restrictions to limit these companies from getting bigger, and he’s spoken out about tech investors striking it rich while the Main Street economy is doing poorly.
Another highly distinctive crisis for Biden is that he takes over while schools are mostly closed. Even if you don’t work in the education sector, parents nationwide are burdened by the still-ongoing school closures and remote learning. Getting kids back in school will help make all parents’ careers a whole lot easier.
Biden’s plan to reopen schools focuses first on virus containment, and he’s certainly going to be stricter about enforcing mask-wearing. But Biden also says he’s going to invest much more in reopening schools, calling for $58 billion to cash-strapped school districts, another $30 billion for districts to implement COVID-19 safety measures, plus $4 billion to deliver broadband internet to more children.
President Obama had big aspirations with green technology, but the results were a mixed bag. He did oversee solid growth and the wind and solar energy sectors, but a government funding scandal with one solar company made that a liability. Biden also has a set of green tech policies
that call for immediate pollution limits and fuel economy standards, limits on oil drilling, and a $400 billion investment in clean energy.
Biden is likely to have much better luck than Obama with green energy. Electric vehicles like Teslas are now a trendy emerging market, and Americans are far more receptive to things like car-charging stations with solar inputs that may have seemed too esoteric when Obama was elected in 2008.
Even if your industry was not listed above, Biden’s policies will still affect you. The markets have reacted well to Biden’s election but likely because of the promise of good vaccine news. Reality could undermine that promise quickly, and the challenge of reopening America could be longer and more difficult than his team is anticipating.