5 key financial factors in Biden’s 2023 State of the Union deal with earlier than Congress
President Joe Biden delivers the State of the Union address before a joint session of Congress in the US Capitol Tuesday, February 7, 2023, in Washington as Vice President Kamala Harris and House Speaker Kevin McCarthy of California applaud.
swimming pool | Via Reuters
President Joe Biden delivered his second State of the Union address before Congress on Tuesday night, marking the halfway point in his term. It was an opportunity for him to highlight his administration’s achievements to date and set the tone for how he hopes the next two, possibly more, years will go.
Biden was bullish on his economic policies after recent reports showed near-record low unemployment and strong job growth, but his speech outlined his broader ambitions to transform the economy into one that “grows from the bottom up and the middle out, not from up down.”
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Return of the billionaire tax?
Biden renewed his calls for a tax on billionaires and corporate share buybacks to reduce the federal deficit.
“The tax system isn’t fair, it’s not fair,” Biden said. “The idea that in 2020, 55 of America’s largest Fortune 500 companies made $40 billion in profits and paid $0 in federal taxes? 0 dollars? Guys, that’s just not fair.”
The idea was popularized by progressives like Senators Elizabeth Warren and Bernie Sanders during the 2020 election campaign. Biden has vowed not to levy taxes on Americans earning less than $400,000 annually.
“Now billion-dollar companies have to pay at least 15 percent because of the law I signed, God loves them,” Biden said to mockery from Democrats. “15%! That’s less than a nurse gets paid!”
Biden previously proposed a 20 percent tax on billionaires as part of his federal budget in March last year. In his State of the Union address on Tuesday, Biden urged Congress to “get the job done.” The proposal didn’t garner much favor at the time and likely won’t go anywhere in the Republican-controlled House.
War on junk fees
Biden continued his crusade against unnecessary “garbage fees” from banks, airlines, cable companies and other industries that come along Surprise costs for consumer bills.
“Look, junk fees may not matter to the very rich, but they do matter to most other people in homes like the one I grew up in,” Biden said. “They add up to hundreds of dollars a month. They make it harder for you to pay your bills.”
The Consumer Financial Protection Bureau last week proposed a new rule to ban excessive credit card late fees. Congress banned excessive fees in 2009, but the Federal Reserve Board of Governors enacted measures to circumvent the law.
In his speech, Biden urged Congress to pass the Junk Fee Prevention Act, which would provide further restrictions on excessive fees for travel and event tickets.
“Airlines can’t treat your child like a piece of luggage. Americans are fed up with this. They’re tired of being played for jerks.”
Antitrust law is the focus
In addition to junk fees, Biden’s administration has been adamant about addressing antitrust concerns, a point the president emphasized in his State of the Union address. Biden issued an executive order in October that allowed hearing aids to be sold over the counter, making them much cheaper for the average consumer.
“You see, capitalism without competition isn’t capitalism, it’s blackmail,” Biden said Tuesday night.
The White House repeated the line in November when Live Nation, Ticketmaster’s parent company, screwed up the launch of tickets for Taylor Swift’s Eras Tour, prompting an antitrust investigation. The company was later grilled by members of the Senate Judiciary Committee over antitrust practices.
“Let’s finish the job and pass bipartisan legislation to strengthen antitrust enforcement and prevent big online platforms from giving their own products an unfair advantage,” Biden said.
work and wages
The President outlined several Worker First initiatives as part of his broader effort to build an “economy.” [that] works for everyone, so we can all be proud of what we do.”
He berated companies that force workers to sign non-compete agreements, citing an executive order signed last month that encourages the Federal Trade Commission to prohibit or limit non-compete agreements. Biden said 30 million Americans have had to sign non-compete agreements for positions ranging from executives to fast-food cashiers.
In addition, Biden called on Congress to pass the Right to Organize Protection Act, which would restore workers’ rights to organize without retaliation.
“I’m sure I’ll get an answer from my friends on my left, but from my right,” Biden said, referring to Republicans. “I’m so sick of companies breaking the law by preventing workers from organizing. Pass the PRO law!”
Biden went on to demand that workers have access to sick days, paid family leave and affordable childcare.
Extension of the price cap for insulin
Drug prices were once again a priority for Biden. The President called for an extension of the $35 insulin price cap set in the Medicare Inflation Reduction Act to include needy, privately insured Americans.
“One in 10 Americans had diabetes, a lot of people in this chamber have diabetes,” Biden said. “And every day, millions need insulin to control their diabetes so they can literally stay alive.”
Biden chided drug companies for raising the price of insulin from about $10 a bottle in order to make “record profits” on the drug, up to hundreds of dollars a month. He welcomed Congressional action to cap costs for Medicare beneficiaries, but stressed that they needed to be expanded.
“There are millions of other Americans who aren’t into Medicare, including 200,000 young people with type 1 diabetes who need this insulin to stay alive,” Biden said. “Let’s finish the work this time. Let’s cap the cost of insulin to $35 for everyone.”
What does that mean?
Many of Biden’s proposed ideas, like the billionaire tax and the PRO Act, will be hard sells in the Republican-controlled House of Representatives and will likely be dead by the time they arrive.
The White House and House Republicans are already deadlocked over whether Congress will raise the debt ceiling, a routine move that has been consistently carried out unconditionally for decades. House Republicans are threatening that the country will default on its debt obligations unless Biden agrees to spending cuts that he says should be handled separately. A month into the new Congress, the situation is a foretaste of how other negotiations will develop.
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