'Even If Hampered by the Republican Party'... Biden Has a Workaround for the Economic Stimulus Plan

Possible by Executive Order Without Republican Consent
Considering Student Loan Forgiveness and Minimum Wage Increase

President-elect Joe Biden [Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Joe Biden, the President-elect of the United States who promised to revive the economy hit by the novel coronavirus disease (COVID-19) crisis, is increasingly likely to seek a workaround as he faces opposition from the Republican Party. Although a large-scale economic stimulus package is the best card for economic recovery, it is said that he will look for alternatives that can produce effects similar to stimulus measures through presidential executive orders without the consent of the Senate, which is dominated by the Republicans, due to political obstacles.

According to a press release issued on the 12th (local time) by Biden’s transition team, Biden spoke with Democratic House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer on the same day to discuss the preparation of a stimulus package. He conveyed that a stimulus package including support for households and small business owners, expansion of unemployment benefits, and support for local governments is necessary for economic recovery, and it appears that Biden requested the Democrats to speed up the discussions.

However, negotiations between the Democrats and Republicans in Congress have virtually come to a halt. Senate Minority Leader Mitch McConnell (Republican) reiterated that the amount of the stimulus package demanded by the Democrats, which exceeds $2 trillion, is too large, and that about $500 billion is appropriate. Speaker Pelosi criticized, "They (the Republicans) are refusing to accept reality and are putting on a ridiculous circus. They are making it harder to respond to the enormous health and economic crisis we face."

With President Donald Trump refusing to accept the election results and the Republicans supporting him, it is unlikely that an agreement on the stimulus package will be reached in the near future. Accordingly, foreign media are paying attention to the possibility that Biden’s team will consider policies that can be implemented under presidential authority without congressional approval.

According to the New York Times (NYT) and others, Biden can stimulate the economy through measures such as student loan debt forgiveness and raising the federal minimum wage. Student loan debt is more commonly held by minorities such as African Americans, so there is a high possibility that minority workers who supported Biden will benefit. Senator Elizabeth Warren, who is mentioned as a candidate for the first Treasury Secretary in the Biden administration, recently wrote in a Washington Post (WP) op-ed that "billions of dollars in student loan forgiveness would provide immediate financial support to tens of millions of Americans and help reduce racial disparities," adding that "a single executive order is the most effective way to provide consumers with a massive economic stimulus."

Felicia Wong, an advisor to Biden’s transition team and president of the Roosevelt Institute, mentioned to the NYT that raising the federal minimum wage, currently $15, through an executive order could benefit thousands of workers. It is also possible to oversee whether the $2.2 trillion stimulus package executed by the Trump administration in March was properly distributed. For example, the Paycheck Protection Program (PPP), introduced to help small business owners, can be checked to see if it was properly used for employee payroll, and if not, the funds could be reclaimed.

This content was produced with the assistance of AI translation services.