What Joe Biden Would Do in His First Month
Author: Greg Valliere
October 29, 2020
IT’S TOO PREMATURE for Joe Biden to measure for drapes in the White House — the race seems to be tightening — but his top advisers are making plans for his first month in office. We’ll look at that today, and tomorrow we will focus on what Donald Trump might do in a second term.
IF BIDEN WINS, he will begin assembling a very diverse — and progressive — Cabinet that will come into focus in December. If he is inaugurated on Jan. 20, he then would focus on five major issues in his first month as president:
1. Pick up the phone: Within hours of his inauguration, Biden would begin calling global leaders — Angela Merkel, Emmanuel Macron, Boris Johnson, Justin Trudeau, Benjamin Netanyahu and perhaps Xi Jinping and Vladimir Putin.
The message will be simple: the U.S. will seek more predictable relations, and trade policy will become more pragmatic. A normalization of U.S.-China trade relations may not come quickly, however, because many Democrats would resist a liberalization.
2. Regulatory reversals: Biden probably would convene a task force to decide which Trump regulatory reforms will have to go. Emissions regulations — for factories, autos, tankers, etc. — would be high on the list, as well as labor regulations.
3. The pandemic: Biden would rely heavily on Dr. Anthony Fauci, so a mandate on masks and social distancing is possible; a nationwide lockdown is unlikely. A readily available vaccine by spring seems likely, but a spike in new cases, hospitalizations and fatalities will prompt many Americans to self-quarantine this winter, regardless of progress on a vaccine.
4. Pandemic stimulus: It appears that Nancy Pelosi and Steve Mnuchin cannot agree on the details of a stimulus bill; they will try again after the election, but the negotiators are out of gas. If there’s no deal during the lame duck session, this will be a major Biden priority early in his first month.
Even if Trump wins re-election, a $2 trillion package seems likely — but it increasingly looks like a stimulus bill may not win enactment until February, a negative for the markets, which want some economic medicine quickly.
5. Tax hikes: Once there’s movement on the four issues listed above, Biden would begin to focus on a sweeping package of tax increases on wealthy Americans, businesses, capital gains, estates, etc. We think he may go slow, especially if the economy looks fragile early next year. And would he really want to antagonize the financial markets by proposing tax hikes immediately after his inauguration?
But make no mistake — higher taxes are coming if Biden wins. The Democrats’ progressive activists will push aggressively to hike taxes on the wealthy, and they are determined to impose a wide range of tax increases on corporations. The House Ways and Means Committee probably will begin marking up a bill by spring, once a stimulus package has passed.
The effective date for tax hikes could be date the Ways and Means Committee introduces a bill, perhaps around July 1. The economic impact of higher taxes might not be felt until early 2022 — which could expose Democrats to a difficult election in the fall of that year.
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POLLS AND MORE POLLS: A cacophony of polls will be out in the next few days, and some seem dubious. We simply don’t believe CNN’s poll yesterday that showed Trump trailing nationside by 12 points; this feels like a 5 or 6 point race — and the Democrats have to worry about Pennsylvania, where Biden’s lead has been shrinking.
WE STILL THINK BIDEN WILL WIN THE POPULAR VOTE, but that’s irrelevant; Hillary Clinton won the popular vote. Biden still has more paths than Trump to 270 Electoral College votes, but he may be making a mistake that doomed Clinton — why spend time and resources in states like Texas and Georgia when the election will be decided in Michigan and Pennsylvania?
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