Quote of the Day
“This is our historic moment of crisis and challenge, and unity is the path forward.”
– President Biden, calling for unity in his inaugural address. “We must end this uncivil war that pits red against blue, rural versus urban, conservative versus liberal,” Biden said. Read his full speech here, or watch it here.
Biden Signs a Slew of Executive Actions on Day 1, With Promise of More to Come
President Biden signed a flurry of executive orders just hours after taking the oath of office on Wednesday, hastening to enact his agenda to address the coronavirus pandemic and to reverse Trump administration policies in areas such as immigration, racial equity and climate change.
Biden’s chief of staff, Ron Klain, also issued a memo to freeze new regulations and review any that the Trump administration tried to finalize in its last days.
Biden’s team reportedly boasted that the 15 executive actions and two directives to agencies far surpassed the number of actions his four predecessors took on their first days in office.
And Biden plans more actions over the next 10 days. “According to guidance shared with Capitol Hill, he plans to issue administrative actions relating to the coronavirus on Thursday and economic relief on Friday,” The Washington Post reported. “A ‘Buy American’ action will come Monday, and an order addressing racial equity issues will follow Tuesday. He will announce actions on climate change on Jan. 27, health care on Jan. 28, immigration on Jan. 29, and international affairs and national security on Feb. 1.”
The combination of executive orders, memoranda, directives and letters Biden signed Wednesday include:
* Launching a “100 Days Masking Challenge,” asking the American public to do “their patriotic duty” by wearing face masks and instituting a mask mandate requiring face coverings and physical distancing on federal property and by federal employees and contractors.
* Creating the position of federal Covid-19 Response Coordinator, reporting directly to the president. To fill the position, Biden has chosen Jeff Zients, a former director of the National Economic Council in the Obama administration who is best known for his role in fixing the HealthCare.gov website after its disastrous rollout.
* Reversing the Trump administration’s move to withdraw from the World Health Organization, which the Biden transition team called “an entity that is critical to coordinating the international response to COVID-19, advancing preparedness for future epidemics and pandemics, and improving the health of all people.”
* Reestablishing the National Security Council’s global health security team, which was disbanded under Trump.
* Asking the Centers for Disease Control and Prevention and other agencies to extend federal eviction and foreclosure moratoriums until at least March 31 and calling on Congress to provide more assistance to renters.
* Asking the Department of Education to extend the pause on interest and payments for federal student loans until at least September 30.
* Terminating the national emergency declaration Trump used to divert federal funds toward construction of border barriers. Biden’s proclamation pauses wall construction projects “to allow a close review of the legality of the funding and contracting methods used, and to determine the best way to redirect funds that were diverted by the prior Administration to fund wall construction,” his transition team said.
* Repealing the Trump administration’s interior immigration enforcement order that sought to strip federal funds from so-called "sanctuary cities.”
The Economy Biden Inherits in 3 Charts
President Joe Biden inherits an economy suffering from the effects of a pandemic that’s still causing enormous pain throughout the country.
While the economy has made a comeback in some areas since its lowest point last spring, there are still major problems the new president needs to confront. “We’re in a catastrophic health and economic crisis,” Austan Goolsbee, who chaired President Obama’s Council of Economic Advisers, told Marketplace Wednesday. “We’re still as bad by some measures as the lowest point of the Great Recession.”
Many economists say the prospects for recovery are reasonably good — as long as the new administration can get a handle on the pandemic. “There remains a tremendous amount of underlying strength in the U.S. economy,” Douglas Holtz-Eakin, who led President George W. Bush’s Council of Economic Advisers, told Marketplace. “If we can sustain those who’ve been out of work with the relief that we’ve seen Congress pass and deal with the virus, there’s a good platform to jump off from.”
Biden has proposed a massive relief package totaling $1.9 trillion to help households and businesses stay afloat in what could be the peak of the Covid-19 crisis. Here are three key areas that show just how far the economy still has to go.
Employment: The economy is down nearly 10 million jobs compared to where it was at the start of the crisis. Employment fell by more than 22 million in the spring as large swaths of the economy shut down in response to the pandemic. About 12.3 million jobs have been regained — an impressive number, but one that leaves millions still out of work, with losses concentrated in depressed industries including restaurants, entertainment and travel.
The unemployment rate has fallen much faster than expected, holding steady at 6.7% in December. But the millions of workers who have dropped out of the workforce don’t show up in the official unemployment rate, suggesting the problem is much worse than the headline number indicates. In December, payrolls shrank again, bringing seven months of job growth to an end.
Job losses could continue in January, economists say, but most expect to see a significant turnaround after that, driven by the combined effect of the $900 billion stimulus package signed into law in December and the slow but steady return to normalcy caused by mass vaccinations. State and local governments account for some 13% of the workforce, and further cuts by governments facing budget pandemic-related pressures could slow the recovery, economists warn.
The question for Biden is how many of the job losses are permanent, and how long it will take for the economy to create enough new jobs to absorb the millions of people who are looking for work.
GDP: After falling like a stone in the spring, the economy bounced back at a record pace in the third quarter. But growth is expected to have slowed considerably in the fourth quarter, bending the curve away from the v-shaped recovery some economists had hoped to see.
The $900 billion stimulus package currently in effect is expected to help boost the economy’s growth rate and prevent it from slipping into a potential double-dip recession. Biden’s proposed $1.9 trillion stimulus package would amplify that effect considerably. Mark Zandi, chief economist at Moody's Analytics, projects a growth rate of 8% in 2021 in the unlikely event that Biden’s full plan passes, with employment returning to pre-pandemic levels in 2022.
More realistically, Zandi expects to see a smaller package worth about $750 billion — enough to push the growth rate to 5% for the year.
Covid-19 cases: It may not be a conventional economic measure, but the Covid-19 case count may be the single most important factor in determining the economy’s course over the next year.
Biden is taking direct aim at the issue, with one of his first executive orders calling for the use of face masks on all federal property (see below) — a marked shift from the previous administration, in which face masks were seen with skepticism if not suspicion. Biden has also pledged to oversee 100 million Covid vaccine shots in his first 100 days, a lofty target but one that suggests that the new administration intends to take every step it can to slow the spread of the disease.
- 4 Takeaways From Joe Biden’s Inaugural Address – Aaron Blake, Washington Post
- 400,000 Dead. Never Forget These Precious Lives Lost – Washington Post Editorial Board
- A New President, and a New Start – Bloomberg Editorial Board
- Joe Biden Wants to Avoid the Obama Era's Biggest Economic Mistake. Congress May Not Let Him – Matt Egan, CNN
- ‘Byrd Rule’ Shadow Could Fall on Biden Coronavirus Relief Plan – Paul M. Krawzak, Roll Call
- The Delicate Deficit Dance That May Define Biden’s Presidency – Howard Gleckman, Tax Policy Center
- President Biden Arrives With Negotiator in Chief Credentials – Lindsey McPherson, Roll Call
- $15 Minimum Wage Subverts Biden Recovery Plan – Michael R. Strain, Bloomberg
- Joe Biden's Proposed Stimulus Checks Are a Lousy Way to Fix the Economy – Chris Isidore, CNN
- Why Biden’s Minimum Wage Idea Is Old News for States – Jordan Yadoo, Bloomberg
- Trump Went to War With His Own Government. Biden Now Has to Repair It – Joe Davidson, Washington Post
- How to Rein in Big Tech? Tax the Behemoths – Stewart Baker, Washington Post
- Donald Trump Had an Economic Record That Will Be Remembered – Stephen Moore, The Hill
US Institutions After Trump—Daron Acemoglu, Project Syndicate