What Are President Biden’s Economic Plans and Policies?
Joseph Robinette Biden is the 46th president of the United States, with a term lasting from 2021 to 2025. The highest priority for his economic plan is to combat the COVID-19 pandemic and the recession it caused. To do so, Biden released a $1.9 trillion “American Rescue Plan” in January that provides specifics.
Biden also plans to overhaul the nation’s embattled health care system and address the global climate crisis. He's outlined policies for education, immigration, and housing, as well as taxes, infrastructure, and trade. Learn specifics about each category he, alongside Vice President Kamala Harris, plans to tackle during his presidency.
- Joe Biden has prioritized responses to the pandemic, essential workers’ safety, and recession recovery in his economic proposals.
- Biden hopes to make public health care available to eligible Americans who want it.
- Biden’s tax plan would include increases for corporations and high-income individuals.
- Other planned reforms include addressing climate change, education, immigration, and infrastructure.
Biden's "National Strategy for the COVID-19 Response and Pandemic Preparedness"—released on Jan. 21, the day after he was sworn in as president—is guided primarily by recommendations issued by the Centers for Disease Control and Prevention (CDC).
Within his first few days in office, Biden implemented some components with executive orders and presidential memorandums focused on the pandemic; however, increased spending needs congressional approval before it can be put into action. That would include Biden's $1.9 trillion American Rescue Plan to fight the coronavirus. The plan includes $160 billion to expand vaccine manufacturing and distribution, $170 billion to help schools reopen safely, and $25 billion for child care providers.
Biden encouraged federal agencies to use the Defense Production Act to produce more personal protective equipment (PPE) that protects essential workers and school personnel from COVID-19. A Pandemic Testing Board would coordinate testing distribution, and a Public Health Jobs Corp would mobilize 100,000 people to do contact tracing.
Biden has a goal to provide 100 million COVID-19 vaccinations in his first 100 days as president.
In the American Rescue Plan, Biden promised to give essential workers a COVID-19 pay boost. He would expand sick and family medical leave through Sept. 30, 2021, for anyone who gets sick with the virus or stays home to care for ill family members. The goal is that by allowing sick employees to stay home, disease transmission would be reduced. At the same time, the government would reimburse employers who pay out COVID-19 sick leave for up to 14 days.
Recession Recovery, Jobs Creation
Biden signed an executive order Jan. 25 aimed at forcing the federal government to purchase more goods produced in the U.S., as promised in his "Buy American" plan. It would allocate $400 billion to buy American 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 claims the plan will be the largest of its kind since World War II.
The American Rescue Plan would send $1,400 per-person checks to qualifying households. That’s on top of the $600 stimulus payment approved by Congress in December 2020.
The plan would also expand unemployment benefits to those in need, including previously ineligible contract workers. More than 1 million of the hardest-hit small businesses could take advantage of $15 billion in grants meant to help them "build back better," and up to $175 billion in loans. In an effort to better support front-line workers, ensuring they are on the job and paid, the plan would provide $350 billion to state and local governments, $20 billion to tribal governments, and $20 billion to support public transit.
To keep hunger at bay, as the rate of hungry Americans increased in the summer of 2020, Biden would increase SNAP benefits by 15% through September 2021. The eviction and foreclosure moratorium would also be extended through Sept. 30, and renters and small landlords would receive $30 billion in aid.
On Jan. 27, 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. If approved by the Senate, it would initially raise the $7.25 minimum wage to $9.50 an hour, with specific increases scheduled each year through 2025. This is meant to spur economic growth by giving workers more to spend, increasing both demand and business revenue.
Health Care Reforms
Biden would lower premiums for insurance provided by the Affordable Care Act (ACA) to expand coverage for more middle-income families. He would also create a universal health care option available to anyone who wanted or needed it. Under his proposal, no one on a publicly sponsored health plan would pay more than 8.5% of their income for health insurance. Qualified residents of the states that didn’t expand Medicaid could also sign up for the universal health plan for free.
On Jan. 28, Biden directed the Department of Health and Human Services to reopen enrollment for ACA plans, reinstating HealthCare.gov.
Biden also promised to:
- Subsidize premiums for those who lost their jobs so they could continue to receive coverage under their employer-sponsored plans
- Increase federal support of Medicaid
- Lower the eligibility for Medicare to age 60
Climate Change Measures
On his first day in office, Biden rescinded Trump-era orders that weakened the nation's environmental regulations and made it clear that 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 rejoined the Paris Agreement, which former President Trump withdrew from 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
- Ban offshore drilling in the Arctic and new oil and gas permits on public lands
- 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
Biden's 2050 zero-emission target falls short of the Paris Agreement’s goal of reaching zero emissions by 2030.
On Jan. 20, Biden extended the pause of federal student loan payments and kept the interest rate at 0%. 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 what practices to enforce to keep schools 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 1 funding for low-income families to raise teachers' pay. 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 3- and 4-year-olds, in an effort to lower the financial and emotional burden on parents across the country.
A McKinsey study showed that, if low-income students had had the same educational achievement as their wealthier peers by 1998, in the next decade they may have added up to $670 billion to the economy.
To lower the cost of higher education, Biden would make community colleges and public universities free for families with income below $125,000. He would invest $8 billion on community college facilities and $50 billion on workforce training.
Biden’s proposals would reverse most of Trump's immigration policies. On his first day in office, Biden rescinded Trump's ban on immigration from primarily Muslim and African countries. Then, on Feb. 2, he ordered the Domestic Policy Council (DPC) to expedite the naturalization process and restore trust in the legal immigration system. In correlation with that goal, Biden asked that the DPC create a Task Force on New Americans, set to include members of agencies that can implement policies directly 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. Under the Biden administration, the U.S. would no longer separate families at the border. On Feb. 2, Biden established the Interagency Task Force on the Reunification of Families to reunite children separated from their families during the previous administration.
Biden's U.S. Citizenship Act, which is focused on modernizing the entire immigration system, would provide a road map to citizenship for undocumented immigrants who pay taxes and pass a background check. 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 Jan. 26, Biden ordered the U.S. Department of Housing and Urban Development (HUD) to restore the agency's adherence to the Fair Housing Act, which had been weakened by prior executive actions. Biden plans to make available $640 billion 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.
Subsidized housing allows residents to focus on improving their job skills and education. It provides stability during bouts of unemployment, so children can remain in school.
Specifically, Biden would:
- Spend $13 billion to build 400,000 units for the homeless through Congresswoman Maxine Waters' 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 new tax credit for low-income renters
Per estimates from the Tax Foundation, 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, he would impose a 12.4% Social Security payroll tax for those making more than $400,000 a 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 tax long-term capital gains and dividend income above $1 million at the 39.6% income tax rate.
Biden would make the tax code more progressive, meaning high-income households pay a higher tax rate than do low-income taxpayers.
Biden would increase tax deductions or credits for senior workers, families with children, and first-time homebuyers. Per Biden's American Rescue Plan, the Child Tax Credit (CTC) would increase, and so would the Earned Income Tax Credit (EITC) for childless workers and the income limits, allowing more people to claim it. The plan would expand tax credits for child care expenses.
Biden's "Build Back Better" plan would invest $2 trillion to rebuild infrastructure, focusing on clean energy. He would increase funding for zero-emissions public transit in any town with a population of 100,000 or more residents.
The plan would expand the nation’s rail system, invest in high-speed rail, and help Amtrak add more electric travel. It would also improve battery technology for electric vehicles and add charging stations. Plus, Biden plans to provide universal broadband, including 5G wireless.
Biden would invest $300 billion to restore America's leadership in critical technologies. He is focused on clean energy, artificial intelligence, and electric vehicle battery technology. Instead of tariffs, Biden would work with U.S. allies to present a united front in trade disputes with China.