Markets & Research
More than ever, the first 100 days of a presidency are closely watched for hints of what to expect in the subsequent four years. Early actions indicate not only policy priorities and legislative strategy but the aspirational scope of the person settling into the Oval Office.
The start of Joe Biden’s presidency has been a swirl of activity. He’s issued a string of executive orders. He signed a huge COVID-19 relief package. And he proposed a $2 trillion infrastructure overhaul that his administration portrayed as the first part of a larger plan, with a similarly ambitious second installment.
The fate of the infrastructure plan is unclear, especially considering that the coronavirus bill garnered no Republican support in the Senate. Democrats had to rely on the so-called reconciliation process to push the measure to Biden’s desk. However, executive orders and Senate legerdemain have limitations. In coming months, Democrats might have to make tactical adjustments — and perhaps focus on areas where Republicans are more open to compromise — to bring some of Biden’s plans to fruition.
What’s clear is that Biden has laid out both a vision and a game plan that seem likely to steer his course until at least the 2022 midterm elections. Here’s a look at how the early days of the Biden administration have unfolded and what may come next.
Thus far, Biden’s signature legislative accomplishment is the $1.9 trillion virus response package. The American Rescue Plan covers a remarkable amount of ground, providing $1,400 direct payments to most Americans, extending $300 weekly federal unemployment benefits and funding a variety of programs designed to help lower-income households make ends meet.
This bill “is better directed toward lower- and middle-income cohorts than earlier efforts,” says Capital Group economist Jared Franz. “I think that’s a good thing, making sure we’re helping the people who stand to be worst affected by COVID.”
The plan also provides money to help schools reopen, speed vaccination efforts and expand the Affordable Care Act. At one point, it would have raised the federal minimum wage to $15 an hour.
The bill’s passage was hard won: It narrowly passed the House, but all 50 Republican senators lined up against it. With only 50 votes of their own in the Senate, the Democratic caucus could not risk a filibuster, a bill-killing motion that can only be bypassed with 60 votes. Instead, they turned to reconciliation, the arcane process that allows certain bills to go straight to a vote.
However, reconciliation isn’t a silver bullet. Many items can’t be included, as Democrats found when the Senate parliamentarian nixed the minimum wage component. The party divide made clear that the Democrats can’t take any non-Republican vote for granted in future legislation.
“The challenge in reconciliation isn’t necessarily the Republicans — it’s moderate Democrats,” says Capital Group political analyst Matt Miller. “They don’t want to hurt employers, especially in the current situation, when we’re in need of job growth. And some of them are facing reelection in purple districts in 2022.”
This dynamic could come into play for Biden’s infrastructure plan. Republicans have championed a modernization of U.S. roads, bridges and the like, with former President Donald Trump repeatedly invoking the prospect during his term in office. But Biden seeks to fund his plan by raising the corporate tax rate to 28% from 21%, undoing a portion of the Tax Cuts and Jobs Act of 2017.
“I don’t think the Democratic Party’s razor-thin majorities can hang together to enact the huge ambitions Biden unveiled,” Miller says. “He’s proposing trillions in new spending partially offset by trillions in new taxes. I think a feasibly enactable agenda probably looks more traditional.”
Complicating efforts, some senators have already expressed fear that the next portion of the infrastructure plan will feature more tax increases. Biden campaigned on higher taxes primarily aimed at high-income earners.
“Raising taxes to pay for the proposal is an indication that we’ve shifted from deficit-funded ‘emergency’ COVID relief spending to a more normalized post-COVID spending approach,” Franz says. “In areas like infrastructure, I think there’s some commonality between the right and the left. But there’s a fundamental difference between Republicans and Democrats on how you tax people.”
Biden has been aggressive with executive actions. He’s signed dozens of orders, proclamations and memos, putting him on pace to publish more than his predecessors in his first 100 days. However, rather than breaking new ground, many of these actions dismantled Trump-era directives and marked a return to the status quo in 2016.
For example, Biden loosened many of Trump’s immigration rules, especially those that limited the scope of who could enter the U.S. Conversely, he’s tightened many environmental regulations. That includes nixing the bitterly contested Keystone XL oil pipeline and recommitting the U.S. to the Paris climate accord, a nonbinding set of environmental goals.
“There’s a certain litmus test of ‘what Trump did, Biden will undo,’” Franz says.