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Congress still has not reached agreement on a new COVID-19 relief plan to help millions of Americans who could fall off an economic cliff by year-end when moratoriums on evictions and some unemployment benefits are expected to expire. But whether or not Congress agrees on an additional aid package during the lame duck session, Joe Biden will always inherit a fragile economy and perhaps uncooperative Congress, which raises questions. on what – if anything – the next president can do on his own to support an economic recovery.
One thing most economists agree on is that the best way for the president to directly stimulate the economy is to tackle the public health crisis and ensure that vaccines are deployed effectively.
“Rule # 1 in the virus economy, I always say, is that if you want to help the economy you have to control the spread of the virus,” said Austan Goolsbee, former chairman of the Council of Economic Advisers. under President Barack Obama who also informally advised Biden’s campaign.
He said that controlling the virus is not a compromise with improving the economy, in his opinion it is fundamental for an economic recovery.
Biden could help control the virus, some say, by encouraging Americans to wear masks, but he could also force changes to make workplaces safer.
“The president has the power to lead [the Occupational Safety and Health Administration] put in place an emergency temporary standard to help protect workers during COVID, ”said Heidi Shierholz, former Obama administration labor economist who now works at the Economic Policy Institute.
In August, about a quarter of the U.S. workforce worked from home, according to the Bureau of Labor Statistics.
Many economists believe additional congressional spending is vital at this time, but if that isn’t feasible, it’s worth considering what Biden could do on his own.
“There are many areas where the federal government could get some relief,” Goolsbee said. “One of the most obvious spaces is student loans.”
The Trump administration has postponed student loan payments until the end of January.
A number of Democrats on the Hill, including Senate Minority Leader Chuck Schumer, are urging Biden to go further.
“I have no doubts that the new president – President Biden – in the first few weeks after his appointment can simply sign an executive order and, in the end, wipe out $ 50,000 in student debt from each student,” said Schumer, DN .Y., At a press conference last month.
Some economic experts have argued that canceling student debt is in fact a bad form of stimulus that does not inject a lot of money into the economy given how much it would cost the government. Others have called for an income cap of around $ 150,000 so that any cancellation program specifically targets low- and middle-income families.
But anyway, as Schumer and other Democrats argue, it’s something Biden could do with “a stroke of the pen.”
“Ninety-five percent of all student debt is actually held by the government, so the education secretary would have the power to write off a lot of that debt,” said Felicia Wong, who has spoke to NPR in his capacity. as President and CEO of the Roosevelt Institute. She is also a member of Biden’s Transitional Advisory Board.
Minimum wage for federal contractors
Susan Walsh / AP
Wong has another idea for Biden that she says would immediately put money in people’s pockets.
“(The) federal government is a very large employer, and Joe Biden promised during the election campaign a federal minimum wage of $ 15 an hour,” she said. “Well, that would require Congress. But his administration could take an executive action that says all federal contractors must pay their employees at least $ 15 an hour.”
Wong said the change would help a number of low-income workers and put pressure on other businesses outside of federal jurisdiction.
Trade, health policy
Other experts say Biden could try to tackle parts of his larger economic agenda without Congress; he could, for example, change Trump’s trade tariffs or change regulations around the Affordable Care Act.
“The Trump administration has pushed the boundaries of what perhaps almost everyone thought was possible with billions of dollars in payments to farmers [and] from embezzling billions of dollars from the defense budget to building the wall, ”Goolsbee said.
The president has also passed a number of COVID-19 assistance measures without Congress, placing a moratorium on evictions and withdrawing disaster money from FEMA to pay for increased temporary unemployment assistance.
A creature of Congress
But even though Biden could employ similar executive actions, political experts say it’s not clear the Trump administration’s maneuvers were entirely legal or as big as the economy needed them. Moreover, they add, radical one-sided action in the midst of an economic crisis is not in Biden’s nature.
“President-elect Biden is himself a creature of Congress, and I think as a result – he’s going to be more in tune with Congress, rather than circumventing Congress by issuing executive orders,” said Bill Hoagland, vice -Senior President of the Biparty Policy Center.
Shierholz also wonders to what extent some of these one-sided measures, such as canceling student loan debt, which could provide a “fairer economy” in the long run, would actually solve the immediate financial problems people face. The economy needs a boost, she said. And while there is an assumption that a new president can walk into the Oval Office and immediately change the course of the economy, she said, presidents don’t have the specific tools to do so. The most viable path for sustained economic recovery, she said, requires congressional buy-in.
For example, she said that one of the most effective forms of stimulus the federal government could offer would be more money for cash-strapped state and local governments and manage less tax revenue. This would allow them to keep first responders, such as police and firefighters, on the job.
But the president can’t distribute more money to state governments – Congress should allocate those funds.
So, in some ways, the biggest economic test for Biden isn’t how much he can do on his own, but how good he is at making deals.
“The thing he will have to resort to is trying to build on his nearly 50 years of experience in Washington,” said Shierholz. “This is what it will boil down to. Can President Biden convince [current Senate Majority Leader] Mitch McConnell to move on because that’s what it will take to get the stimulus needed. “