If re-elected, Mr. Biden will seek to increase budget spending to subsidize production and social welfare but will remain skeptical of globalization.
Joe Biden's opponents have focused on his age as a weakness in his 2020 presidential bid. But paradoxically, when he became the White House boss, the 81-year-old leader has probably led the most dynamic US government in nearly half a century, according to The Economist.
He has launched spending packages to reduce poverty and encourage industry to reshape the world’s largest economy. Of course, there is much debate about the merits of these policies. For example, a surge in federal spending has exacerbated the budgetary situation. Or subsidies for companies investing in the United States have angered allies.
But there’s no denying that many of these policies have worked. Just look at the boom in factory construction, and investment in manufacturing has more than doubled under Biden, soaring to record highs.
US President Joe Biden speaks at the White House on January 19. Photo: AP
Like any president, Mr. Biden’s agenda has so far been limited by Congress. His $3.5 trillion “Build Back Better” bill has many components, but the most successful so far has been the investment side, which includes three pieces of legislation focused on infrastructure, semiconductors and green technology.
Accordingly, three laws were signed into law related to these contents, creating a $2,000 billion effort to reshape the US economy. It was considered an effective presidential term, according to the Economist.
Biden’s reelection campaign motto, “We can get it done,” sounds more like a builder’s pledge than political rhetoric. But current and former advisers to the president have said that “Bidenomics” is akin to an American economic revolution. Where will that revolution go if Biden continues to run for a second term in the White House?
There are two scenarios. First, if Republicans retain control of the House or Senate, or both, advisers say Biden’s focus will be on protecting his legislative achievements. Republicans won’t be able to repeal Biden’s packages, but they can block them.
For example, a nearly $200 billion funding package for advanced technology research and development requires congressional approval to be spent. So far, only $19 billion has been awarded to three federal research agencies, nearly 30 percent less than planned, according to Matt Hourihan of the Federation of American Scientists.
So if Congress refuses to cooperate, the real money that is spent will be squeezed. Then the investment that has been on the rise for the past few years will likely slow down. Manufacturers will struggle to survive because of high input costs.
But Mr. Biden will have some leverage. Many of the big tax cuts passed under Donald Trump are set to expire at the end of 2025. If Republicans want to extend them to avoid a spike in tax rates, they will likely have to negotiate with Mr. Biden in exchange for supporting some of the president’s priorities, including industrial subsidies, regardless of the budgetary risk.
But what happens if Democrats control both houses? Biden could implement unfinished plans in his “Build Back Better” agenda, including free preschool, increased child and senior benefits and other social benefits.
Treasury Secretary Janet Yellen describes the agenda as “modern supply-side economics.” She argues that investing in education will make workers more productive, while health care will free people, especially women, to work, leading to a larger workforce.
But it would also be costly, requiring at least $100 billion in additional spending each year, adding half a percentage point to the federal deficit, which is expected to reach 7.5 percent of GDP by 2023. Implementing it would also be difficult. For example, subsidizing child care would spur demand, exacerbating the shortage.
Biden’s desire to strengthen unions also has an opportunity to do so. Last year, he became the first president to join a protest, joining a strike by autoworkers near Detroit. But beyond symbolic actions and words, his push for the Support Act, which would promote collective bargaining and limit corporate interference in union decisions, has been unsuccessful. Reelection and Democratic control of Congress would open the door.
For supporters, Biden’s ambitious spending increases on everything from child care to semiconductor subsidies would make America more equal and boost industry. But for opponents, it’s the prospect of a government that reverts to an outdated model focused on manufacturing and unions, one that could strain relations with allies.
There are also doubts about the foreign economic approach. The big question, for example, is whether the US and Europe can reach an agreement on critical minerals and work together to secure inputs for battery production and reduce dependence on China. Biden has so far been skeptical of globalization. He recently suspended approval for liquefied natural gas exports and is almost certain to maintain a tough stance on China.
In the short term, Biden must convince Americans that he is in a position to continue running the world’s largest economy. As he prepares for the general election, he has emphasized that people are starting to feel better about the state of the economy, which will be a key issue for them in the November election.
“We passed a lot of really good legislation. It took a while to kick in, but it’s already having an impact in turning the economy around,” he said on January 25 at an event in Superior, Wisconsin.
However, American voters generally have a dim view of Mr. Biden’s ability to manage the economy. A December Wall Street Journal poll found that “Bidenomics” was approved by less than 30% of voters and disapproved by more than half.
History also works against him economically. The research journal The Conversation found that when Americans are confident about the economy, they tend to support the incumbent president. Conversely, if they are pessimistic, they will vote for someone else.
Over the past 45 years, from January 1978 to December 2023, consumer confidence has risen as rapidly as it did under Republican Ronald Reagan in the 1980s and again under Democrat Bill Clinton in the 1990s. Then, approval ratings for the incumbent president have risen in tandem.
By contrast, confidence hit its lowest point in 2008, after the financial crisis, when George W. Bush was in the White House. Approval fell when Barack Obama was elected president that year. For Biden, a Gallup poll released in December 2023 found 22% of consumers satisfied with the state of the country and 77% dissatisfied.
According to The Conversation, the US economy is growing faster than expected, but GDP figures can feel vague and out of touch with reality for ordinary people. So far, economic indicators have increased in the run-up to the November election, but they have not had any positive impact on Mr. Biden. "While the US economy is doing well, voters have not necessarily felt it in their pocketbooks," the magazine commented.
Phien An ( according to Economist, ABC, Conversation )
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