Biden’s administration now transforms into a new sector of his presidency, especially as his first hundred days comes to an end. Major economic legislation has already been passed by Democrats to combat the effects of the coronavirus pandemic. The ‘American Rescue Plan’ was passed with the goals of providing citizens with $1,400 additional stimulus checks and continuous unemployment benefits for individuals that are unemployed because of the pandemic.
While this relief package has likely succeeded in providing relief for millions of Americans, it also has managed to provide a temporary boost to the economy. This includes jobs numbers, stock market, and the employment rate.
The big problem is that Biden’s desire to pass expensive infrastructure legislation is not overwhelmingly popular with Republicans. There’s also several democrats that are calling for the corporate tax rate to remain below 25%. Several of the proposals in that bill could endanger the economy in several different categories. A significant increase in the corporate tax rate could immediately spark a disaster in the stock market across a wide range of sectors and industries.
The signs of a struggling economy likely won’t be visible for a while as businesses reopen and restrictions from the pandemic are slowly lifted. There will likely be signs of growth and expansion initially, but one can only wonder how much of that is being affected by the temporary benefits of the ‘American Rescue Plan’.
Expanded unemployment benefits are ending in September and many people have already spent their stimulus checks on their personal priorities. This means that millions of people could be without relief if the pandemic’s effects are not completely accounted for by the beginning of September.
As government spending continues to increase under Biden’s administration, the risks of another major economic collapse also go up significantly. For now, Biden’s first 100 days in office can be judged decently, but his true test with the economy will come in the months ahead as expensive legislation is debated in the chambers of congress.
If the skeptical democrats continue to block Biden’s potential infrastructure bill, an economic collapse may become less likely. Biden may be forced to leave the corporate tax alone and look at other ways of paying for his massive infrastructure proposal. Only time will tell which path his administration ultimately takes, but the steady economic recovery that has been apparent since March of 2020 could come to an end at any moment.