As the November election approaches, wouldn’t it be nice if important policy issues took precedence in news coverage over stories about who insulted whom? Mainstream media seems to favor covering personality squabbles over more substantive topics. The fact that the national media is fixated on name calling and who is and isn’t giving interviews to the press is just weird. Oops. Sorry!
People tend to hold politicians accountable for the state of the economy and while this is understandable and justifiable to some degree, the fact is that a macroeconomy is a slow moving beast and is influenced by a number of factors that sitting Presidents have limited control over in one four year term. This article seeks to give an overview of the economic policies of the Trump and Biden – Harris administrations and the impact that each have had on the economy that we are experiencing today.
Trump’s Economic Plan: The Tax Cuts And Jobs Acts of 2017 was Trump’s signature economic plan. It included a $1.9 billion tax cut that slashed corporate rates and according to the Center for American Progress “changed the way the nation taxes profits of U.S. multinational corporations. It also temporarily cut personal income and estate taxes, changes that largely benefited the wealthy”. In a report published in 2020 by the conservative Cato Institute, author Scott Lincicome begins his assessment of Trump’s economic policies by writing, “For the last four years, formal U.S. economic policy has all too often resulted from frantic, messy attempts by beleaguered government officials to backfill disconnected policy trenches dug by presidential tweets. That’s no way to run economic policy, and it shows.” Lincicome’s view of the Trump tax cut is mixed at best. On the positive side, the cuts reduced the United States’ “uncompetitive corporate tax rate”. Lincicome was of the opinion that “the tax cut wasn’t a massive giveaway to the rich, certain upper middle-class taxpayers saw smaller effective reductions than 1 percenters”. Middle class and working class folks did not figure into Lincicome’s assessment. Trump’s assertion that the tax cuts would pay for themselves didn’t pan out. We are often told that these kinds of tax breaks will “trickle down” to the rest of us in the form of corporate expansion, modernization of production facilities and more jobs. Lincicome acknowledges that the results of the Trump tax cuts were “generally disappointing”, noting that there was only significant corporate investment for “a few months, and then business investment slumped again”.
Biden’s Economic Plan: The Biden – Harris administration enacted multiple initiatives in order to address the economic crisis imposed by the pandemic. The American Rescue Plan Act (ARPC) was signed into law in March of 2021. The program provided guaranteed direct funding to all cities, towns and villages in the U.S. With guidance from the Federal Government, local municipalities were able to use the dollars they were allocated as they saw fit to best help their citizens and businesses stay afloat in the face of the worst aspects of the pandemic. It is unusual for economic policies to be aimed at helping everyone. The Biden – Harris administration took care in crafting the ARPC to make sure that it was equitable for all Americans. According to a report by The Treasury Department published in October of 2023, “the American Rescue Plan effectively delivered resources and aid to historically underserved communities, enabling economic recovery far more quickly than in previous downturns”. Other Biden – Harris initiatives include The CHIPS Act which is spurring investments across a number of states to develop high-tech semiconductor research and manufacturing facilities and is creating jobs. The Bipartisan Infrastructure Act has created jobs while addressing the need for investment in repairing and maintaining America’s roads, bridges, airports, railroads, ports, the power grid and other long neglected infrastructure projects. The Inflation Reduction Act (IRA), will provide $8.8 billion in home energy efficiency and electrification projects and is expected to save American families $1,000 a year in energy costs. While the IRA will help America reach its climate goals to reduce greenhouse gasses, a report put out by the Alliance For Citizen Engagement acknowledges that the American Petroleum Institute, the National Association of Manufacturers and most Republican legislators have given a “thumbs down” to the IRA because they oppose the regulations and taxes that are included in the bill. Be that as it may, in an article published last February in UPI, economists stated that under Biden’s economic policies and the performance of the U.S. economy, the prevailing sentiment is that the “economic recovery under the Biden – Harris administration has been exceptional. Economists will be studying the recovery for years to “determine if it is attributed to Biden’s policies, luck, or a combination of the two”.
Trump On Trade: On the Trade front, Trump’s policies included imposing tariffs on trading partners like Canada, China, Mexico, and the European Union. His administration said tariffs would benefit American workers, give the U.S. leverage for future trade agreements, and protect national security. However, a working paper authored by David Autor and others and published by the National Bureau of Economic Research, shows this did not end up being the case. In fact, research published in early 2024 shows that tariffs the former president put on various goods from China did not increase or decrease the number of jobs in industries they aimed to, but also led to tariffs from other countries as retaliation that negatively impacted American workers. The Cato Institute gave Trump a D+. Tariffs may be favored by those who see themselves as “tough negotiators” but the costs of import tariffs always get passed on to businesses and consumers and typically are not considered good for the economy.
Biden On Trade: The Center For American Progress published an article in March of last year that evaluated Biden’s trade initiatives as follows. “Over the past two years, the Biden administration has pursued a number of innovative trade initiatives that in different ways aim to redefine the scope and purpose of U.S. trade relations. These initiatives differ both in structure from traditional free trade agreements (FTAs) and also in their substance, most notably in the emphasis they place on climate aims and worker empowerment over tariff reductions”. The short version of this assessment is that the Biden administration has worked to strengthen trade and economic partnerships around the world, including the Indo-Pacific Economic Framework For Prosperity, the Americas Partnership For Economic Prosperity, the U.S.- Taiwan Initiative On 21st-Century Trade and the U.S.-EU Trade And Technology Council. The economics of trade relationships are very nuanced entities and the Biden – Harris administration seems to have taken these complicated factors into consideration as they have crafted both trade and economic policies.
Trump, Biden And The National Debt: According to the Committee For A Responsible Federal Budget, a quick analysis of what has happened with the national debt under each President can be broken down as follows.
- Trump approved $8.4 trillion of new ten-year borrowing during his full term in office, or $4.8 trillion excluding the CARES Act and other COVID relief.
- President Biden, in his first three years and five months in office, approved $4.3 trillion of new ten-year borrowing, or $2.2 trillion excluding the American Rescue Plan.
- President Trump approved $8.8 trillion of gross new borrowing and $443 billion of deficit reduction during his full presidential term.
- President Biden has so far approved $6.2 trillion of gross new borrowing and $1.9 trillion of deficit reduction.
National economic policies and global economic conditions overlap from one presidential administration to the next. Americans are justifiably concerned about the high price of food and other goods. Trump says he’ll deal with inflation as he did before, with tariffs and tax cuts. The Peterson Institution for International Economics warns that middle class Americans will likely face an additional $1,700 in costs with his proposed tariffs. Tax cuts may or may not happen as they will be dependent on Congressional approval. Kamala Harris has indicated support for increasing corporate taxes, making the super wealthy pay their fair share in taxes, continuing to invest in manufacturing, infrastructure and jobs and protecting consumers by enforcing antitrust laws. The question is, which policies will aid in economic recovery and lower inflation? Readers are encouraged to look beyond media sound bites and election year drama and do their own research. Then, VOTE!
The following sources were used for this article.
Joint Economic Committee: Did Trump Create or Inherit the Strong Economy?
Cato Institute: Grading Trump’s Economic Policies.
Investopedia: The Economic Impact of Donald Trump’s Presidency.
Reuters: Trump ends his term like a growing number of Americans.
Forbes: Record-Breaking Accomplishments On Jobs.
Center For American Progress: The Tax Cuts and Jobs Act Failed To Deliver Promised.
Alliance For Citizen Engagement: Pros And Cons Of The Inflation Reduction Act | ACE.
Center For American Progress: A New Horizon in U.S. Trade Policy.
Peterson Institute For International Economics: Why Trump’s tariff proposals would harm.
Committee For A Responsible Federal Budget:Trump and Biden: The National Debt.
