InterRegional for Strategic Analysis

The United States (US) Congress finally approved President Joe Biden’s $1.9 trillion American Rescue Plan to help Americans cope with repercussions of the COVID-19 pandemic. Approved by the House and Senate, the plan reflects the US president’s commencement of a new economic era running contrary to the one inaugurated by previous US President Reagan in the 1980s based on top-down economic management. Biden’s vision also differs from that of previous President Trump. Biden’s policies, supported by low-income people, will help divide Republicans, especially as 63% of low-income Republicans support the recent economic policies. The key features of US President Joe Biden’s recent economic policies can be summed up as follows:







1- Biden ushers in a new economic era: It can be said—given Biden’s $1.9 trillion recovery plan passed by Congress on 11 March 2021—that Biden is ushering in a new era that is unlike the one that began under former President Ronald Reagan in the early 1980s. That era was based primarily on top-down management, cutting taxes on businessmen to allow their businesses to prosper and expand, thereby creating more job opportunities for the middle and lower classes.







Biden’s vision, by contrast, goes from bottom-up, helping the middle class and low-income people by boosting their purchasing power and, by extension, reviving the economy.







2- Biden’s plan to rescue the middle class: Comparing Biden’s bailout bill to President Donald Trump’s corporate tax cut policies, it appears we are talking about two completely different economic visions.







The benefits of the Trump-era tax cut went to the upper 20% of society, while the assistance tied to Biden’s rescue plan goes to the middle class, which makes up 40% of the income structure in American society.



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3- Support among low-income Republicans for Biden’s policies: A recent Pew Research Center survey found that Biden’s plan had the support of only 25% of high-income Republicans, as well as 37% of middle-income Republicans. But among low-income Republicans earning less than $40,00 a year, and who currently make up a quarter of the Republican Party base, Biden’s plan has 63% support. Those developments could lead to such a split in the Republican Party that it would be difficult to contain.



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4- Biden’s need for media promotion of the rescue plan: Much of many Americans’ defense of Reagan’s economic policy stems from the country’s economic boom in late 1982. They link this progress and economic growth to the Reagan administration’s tax cut policies.







The Biden administration should pay heed to this fact. Without media promotion of the $1.9 trillion rescue plan, and linking Democrats’ passage of this plan to the economic recovery the country is expected to see in the next few months, neither Biden nor the Democrats will be able to attribute this improvement to their policies. Nor will they be able to get rid of the Reaganism currently dominating the US economy.







The Republican minority leader in the US Senate, Mitch McConnell, has recognized this. So he was quick to make a statement saying that if the economy experiences some kind of recovery in the coming period, it is not in any way tied to the recently passed economic recovery package.







In conclusion, it is clear that the Biden administration’s interventionist policies in the economy to mitigate the consequences of the pandemic, which are based on bottom-up management, are ushering in a new economic era that is very popular in American circles as those policies boost the purchasing power of low- and middle-income earners. Biden’s economic policies are expected to further divide Republicans, especially since a large segment of them are low income.

Can Biden’s economic plans peel off low-income Republicans?