Joe Biden could wipe out $50,000 of student debt without Congress. Here are 3 other areas he can help the struggling US economy even with a GOP-controlled Senate.

Joe Biden could wipe out $50,000 of student debt without Congress. Here are 3 other areas he can help the struggling US economy even with a GOP-controlled Senate.

11 Nov    Finance News
Biden transition
U.S. President-elect Joe Biden speaks to the media after receiving a briefing from the transition COVID-19 advisory board on November 09, 2020 at the Queen Theater in Wilmington, Delaware. Mr. Biden spoke about how his administration would respond to the coronavirus pandemic. Joe Raedle/Getty Images
  • Joe Biden will inherit a struggling economy when he takes office in January.

  • Republicans may maintain control of the Senate depending on the outcome of two Senate runoff races in Georgia.

  • Biden could provide student debt relief, repurpose unspent federal relief funds, and raise the minimum wage for federal contractors without Congress.

  • Visit Business Insider’s homepage for more stories.

President-elect Joe Biden will be inheriting a struggling economy when he takes office in January. Coronavirus infections are reaching new highs with the pandemic showing no signs of abating anytime soon.

Meanwhile, millions of people remain unemployed and permanent layoffs are rising. Small businesses are still shuttering as the recovery shows signs of weakening without additional stimulus.

A pair of Senate runoff races in Georgia will decide which party controls the Senate and the balance of power in Washington. If Republicans keep the chamber, it may be difficult for Biden to achieve many elements of his platform such as tax increases for wealthy individuals and corporations.

But here are four steps Biden could take on his own without Congress.

Biden could forgive a chunk of student debt without any help from Congress.

College debt
Student-loan debt reached a national high of $1.5 trillion in 2019. Boston Globe/Getty Images

Democratic Sen. Chuck Schumer, the Senate minority leader, and Sen. Elizabeth Warren unveiled a proposal for the next president to cancel up to $50,000 in student loan debt.

“The President of the United States has the power to broadly cancel student loan debt, help close the racial wealth gap, and give a big boost to families and our economy,” Warren said in a statement in September. “It’s time to use this existing authority and permanently improve the lives of tens of millions of Americans.” 

See also  Shanghai Finds First BA.5 Sub-Variant Case; Macau Shuts All Casinos

Schumer indicated it could form part of Biden’s early agenda in a recent interview. During the Democratic primary earlier this year, Warren said she could use executive authority to begin canceling student debt if she won the presidency.

The Massachussetts senator cited an analysis from Harvard University researchers which found the president could direct the Education secretary to cancel student debt on “a broad or categorical basis.”

Biden has proposed forgiving $10,000 in student debt for borrowers as part of a coronavirus relief package. Nearly 42 million Americans owe debt totaling $1.7 trillion.

Biden could increase the federal minimum wage for contractors to $15 an hour.

capitol hill
The U.S. Capitol is seen from the Russell Senate Office Building on Capitol Hill. AP Photo/Patrick Semansky

Biden can increase the hourly pay for federal contractors

The President-elect supports a $15 minimum wage nationwide, though he hasn’t unveiled a timeline to achieve it. House Democrats passed a plan last year to gradually reach that level by 2025.

Congress hasn’t bumped the minimum wage from $7.25 an hour since 2009. It’s the longest the US has gone without an increase in hourly pay for workers.

Biden could step up corporate taxes by adjusting regulations with the Treasury Department.

Exxon Mobil's Fife Ethylene Plant in Cowdenbeath, Scotland
Exxon Mobil plant in Scotland. Ken Jack/Getty Images

Biden campaigned to partially roll back Trump’s 2017 tax law and increase the tax rate on corporations to 28%. But Republicans are not likely to support the move and it may be difficult to achieve if Democrats don’t control the Senate.

He could step up corporate taxation by adjusting several regulations with the Treasury Department.

Trump’s tax law reduced the corporate tax rate from 35% to 21%, the biggest change to the tax code in three decades.

See also  NatWest Markets’ Girard: Economy Has Shown Resilience

The Trump administration cut the tax liability for multinationals through a combination of new levies known as Global Intangible Low Taxed Income (GILTI) and the Base Erosion and Anti Abuse Tax. Biden can increase these.

Repurpose unspent federal relief funds.

store closed coronavirus business shutdown
Small business closure. Bill Tompkins/Getty

Congress hasn’t spent all the relief funds from the CARES Act passed in March. Biden could repurpose some of the unspent money from the Paycheck Protection Program.

The small business relief program expired in August with $130 billion left over.

Monthslong talks between Republicans and Democrats have not produced a new stimulus package despite economists urging lawmakers to pass one and prop up the economy.

Read the original article on Business Insider

Leave a Reply

Your email address will not be published. Required fields are marked *