- U.S. President Biden’s policy agenda got a significant boost from Georgia voters.
- Large tax increases still look like an uphill climb, but no longer appear impossible.
- Technology companies are likely to face more regulatory risk.
As U.S. President Joe Biden takes office, the prospects for his policy agenda appear more robust than previously thought, following a Georgia runoff election that flipped control of the U.S. Senate.
With Democrats now in charge of the White House, Senate and House of Representatives, some of Biden’s top legislative priorities may encounter less opposition between now and the 2022 midterm elections. But a 50-50 split in the Senate, with Vice President Kamala Harris as the tiebreaker, still means that major new legislation may require some degree of bipartisan support.
Without a commanding Democratic majority, the most ambitious elements of Biden’s agenda are likely to face a difficult, but not impossible, path to approval. That includes large tax increases for corporations and the wealthy, which some moderate Democrats may oppose along with many Republicans, especially while the U.S. economy continues to struggle with the COVID crisis.
“This is not a blue wave scenario,” says John Emerson, Vice Chairman of Capital Group International, Inc.SM and a former U.S. Ambassador to Germany. “With thin Democratic margins in the House and a 50-50 Senate, Democratic moderates will have a moderating influence on legislation. President Biden will work hard to gain bipartisan support where he can.”