Smoldering economic wreckage will greet Joe Biden when takes office in 72 days.
The Democratic president-elect pledged to begin repair work immediately. On a newly launched website — buildbackbetter.com — he said he will move to provide emergency aid to state and local governments, extend unemployment benefits, bail out Main Street businesses, and put people to work in a “Public Health Jobs Corps.”
And he emphasized his focus will be on the middle class — calling it the “backbone of this nation,” in a Saturday speech — as he seeks to more evenly spread the benefits of what he has called a K-shaped recovery. President Trump, by contrast, has insisted the economic rebound has been sharp and V-shaped.
Over the longer term, Biden “plans to incentivize companies to bring manufacturing jobs back to the United States, to raise taxes on corporations and on individuals making more than $400,000 a year, and to fund job-creating infrastructure investments, including in universal broadband,” David J. Lynch
Biden’s ability to do so hinges on which party controls the Senate, which will be decided by the outcome of a pair of runoff elections in Georgia on Jan. 5.
But his incoming administration isn’t waiting to take office to start pressing its agenda. instead, his transition team will work start working with congressional Democrats immediately to shape a relief package they aim to pass during the upcoming lame-duck session, “with the aim of getting money for their priorities in spending legislation before the end of the year,” Erica Werner, Paul Kane and Yasmeen Abutaleb report.
Meanwhile, the scale of the challenge he faces from the economic crisis alone is coming into sharper focus.
The headline unemployment number dipped to 6.9 percent as payrolls jumped by 638,000 in October, according to the Friday jobs report — beating most economists earlier expectations.
But the labor force participation rate remains at a roughly 40-year low, and other estimates say joblessness is much higher than the official number suggests.
“The economy’s initial bounceback also is losing steam. On Friday, the Labor Department said the number of new jobs fell for the fourth straight month. More than 21 million Americans are receiving some form of unemployment benefits,” Lynch writes. “Amid signs of softer demand, major employers recently announced fresh layoffs. ExxonMobil is cutting 15,000 jobs and Boeing is trimming its payroll by 7,000 after letting tens of thousands of workers go earlier this year.”
The pain is likely to get worse before it eases.
As coronavirus infections spike to record levels across the country, it is primed to force new shutdown measures that will take a fresh toll on struggling businesses.
Against that backdrop and likely facing stiffer resistance on Capitol Hill to major relief spending, investors expect the Biden administration to preside over a low, slow grind out of the economic ditch.
“Treasury bond yields fell sharply Wednesday, suggesting investors expect less fiscal stimulus, slower growth and easier monetary policy from the Fed than had been envisioned pre-election,” the New York Times’s Neil Irwin writes. “And the stock market soared Wednesday and Thursday, as investors priced in both easier money from the Fed and a Biden administration that will be constrained in its ability to raise taxes and expand regulation on businesses.”
But the chance for an upside surprise remains, Irwin writes — if, for example, Biden convinces Republicans to embrace a scaled-down aid package between $500 billion and $1 trillion then succeeds in bringing the pandemic itself to heel. “The biggest question may turn out to be this one: Has the pandemic fundamentally broken anything about the economy? If not, a speedy recovery may be possible even without a politically aligned Congress. If yes, it might feel like the early 2010s all over again.”