On Thursday February 18th, US Treasury Secretary Janet Yellen pushed for President Biden’s $1.9 trillion stimulus package saying it was needed to address the pain Americans are facing. She dismissed the notion that it would cause inflation in the future, claiming that the benefits of the package outweigh the costs. The near $2 trillion stimulus comes on top of the Congressional Budget Office forecast that accumulated US national debt in 2021 would exceed its entire GDP — a feat generated by years of debt piling on from both Democratic and Republican Administrations.
Just a month into President Biden’s term, the stimulus stands to be the first major piece of legislation that will be put to a vote in Congress. Biden’s first month has been mainly characterised by a whopping 50 executive actions, including 32 executive orders, many of whose purpose has been to roll back his predecessor’s policies, and advance the social and economic issues on which he campaigned.
- Climate crisis: rejoin the Paris Agreement (on climate change), revoke the permit for the Keystone XL Pipeline, freeze ANWR drilling, elevate climate change to a national security issue, pledge to invest in renewable energy.
- Immigration: Stop construction of the border wall, allow undocumented immigrants to be counted in the US census, rebuild the US refugee resettlement program, preserve DACA, reverse the travel ban on specific countries, create a task force to reunite families separated at the border, end the “Remain in Mexico” program, end harsh immigration enforcement.
- Covid-19 pandemic response: Create Covid-19 Response Coordinator position, require masks on federal property, fill Covid-19 supply shortfalls, expand testing, improve collection and analysis of Covid data, reach 100 million vaccinations in 100 days, provide guidance on safely reopening schools, require face masks on various modes of public transportation, re-enter the World Health Organization.
- Racial and gender equity: Advance racial equity across federal government, revoke 1776 commission, combat discrimination on the basis of sexual orientation and gender identity, repeal transgender military ban, direct HUD to address discriminatory housing practices, combat racism against Pacific Islanders and Asian Americans, expand protection of LGBTQ people worldwide.
A razor thin Democratic Party majority in Congress
On February 5th, resolutions passed in the House and Senate allowing for the stimulus to pass with only a simple majority in Congress, using a legislative tool called budget reconciliation. Normally, legislation requires 60 votes in the Senate, but with the Democrats controlling both houses of Congress, the party sees an opportunity to push its agenda without having to compromise with the Republicans.
Nonetheless, the Democratic Party’s majority in both the House and Senate is razor thin, especially in the Senate where they essentially have a one-seat advantage. With the partisan atmosphere pervading the halls of Congress, President Biden’s agenda — especially the more progressive aspects — will only go as far as the more moderate leaning Democratic senators and members of the House are willing to take it.
“Slow down, Joe”
Only a week after his presidency began, Biden had signed 17 executive orders prompting The New York Times to declare: “Ease up on the executive actions, Joe.” The Editorial Board urged President Biden to advance his agenda through Congress which is more permanent, as opposed to executive actions, which can be overturned easily by another administration.
Biden admitted as much after signing executive actions on climate change, which would revoke many Trump Administration executive actions on the topic. He said that although his administration would combat climate change like never before, it will need to pass legislation for a lot of issues they want to tackle.
The majority of President Biden’s executive orders and actions have been primarily in a few areas: response to the pandemic, racial and gender equity, policies related to immigration, and the climate crisis. Though many will have some form of economic impact, none may be as consequential as Biden’s actions on the climate crisis, which stand to have significant impacts on federal spending and reallocation of its resources.
Climate crisis and renewable energy are priorities
In one of his first actions as President, Joe Biden declared that the US would be re-entering the Paris Agreement (on climate change). A few days later, he signed an executive order intended to tackle the climate crisis and proclaimed that climate change would be at the centre of his foreign and national security policies. The executive order established a climate policy office within the executive office of the president, and a National Climate Advisor would be brought on board.
Massive investments in renewable energy
On the campaign trail Joe Biden unveiled a $2 trillion dollar plan to address climate change, and he wasted no time as President to begin implementing it. Biden’s executive orders have two main points: first, to harness all aspects of the federal government to fight the climate crisis, which includes fostering and encouraging innovation and new technologies for clean energy and to use the procuring power of the federal government to invest in hardware that runs on clean energy.
The second part of the executive orders on this topic is to target the fossil fuel industry by revoking permits such as the Keystone Pipeline, pausing new oil and gas leases on public lands and halting other investments which would facilitate its expansion. According to a fact sheet released by the US Department of Interior, the pause only affects new permits, while mentioning that the oil and gas industry possesses 7,700 unused, approved permits to drill. Reuters quoted Devon Energy’s executive chairman who expects that their permits will be enough to continue drilling for at least four years. A similar statement was made by EOG Resources, and Occidental mentioned that it has more than 200 approved permits. It is the small companies which are concerned about the pause in permits.
The future is still unknown
While the President’s stimulus plan has cleared some hurdles, it remains unclear if he will receive his whole wish list. For example, there are doubts whether he will receive the $15 minimum wage hike that progressives have been pushing. Going forward, Biden will undoubtedly work to implement his climate agenda, but he will need the support of key Democratic senators and members of the House who represent states and districts producing coal and fossil fuels.
Already, Democratic Congressmen from Texas have expressed agitation at Biden’s actions regarding oil and natural gas, claiming they will kill jobs in their state. On the other side, advocates of clean energy are encouraged by the new Administration. Organisations representing major airlines are hoping this Administration will provide investments in clean energy so the airlines can meet their carbon goals.
The economic impact of the Biden Administration’s policy may be a split-screen: a prosperous renewable energy sector with heavy investment by the federal government, and simultaneously the oil and gas sector being hamstrung by regulations and other obstacles that will reduce productivity and lead to job loss.
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