A second Biden term: 3 big consequences
What could Joe Biden accomplish in a second presidential term that he couldn’t in a first? Quite a lot, actually.
Biden’s April 25 announcement that he’s seeking reelection isn’t likely to generate a lot of excitement among voters. Two-thirds of Americans think Biden shouldn’t run again, and half of those cite his age as the primary reason. Biden is 80 and would be 86 by the time he finished a second term.
Yet Biden was a sleeper candidate in 2020, just as he has been a sleeper president. He electrified virtually nobody in 2020, but beat more than a dozen Democrats plus incumbent Donald Trump to win the White House. His low-key presidency has lacked pizzazz, but still resulted in landmark developments on infrastructure, green-energy investment and domestic manufacturing.
Biden is now entreating voters to “finish the job” by giving him another term to carry forward the agenda he began in the first. The momentum of eight consecutive years allows a president’s policies to root deeply in the political ecosystem, instead of barely going into effect before a new president alters or overturns them. Quirks of timing will also drop some crucial issues right onto the next president’s lap. Here are three of the biggest things at stake in Biden’s reelection bid:
Higher taxes. When Republicans passed the tax-cut law that President Trump signed in 2017, they made corporate tax cuts permanent. But tax cuts for individuals, at every income level, expire at the end of 2025. That was necessary to keep the long-term cost of the law below a budgetary threshold it had to meet in order to pass. The hope among Republicans then was that voters would love the tax cuts so much that a future Congress would find a way to extend them.
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Eh, maybe not. Since the 2017 law passed, the national debt has swollen by 54%, or $11 trillion. The debt is so massive that some Republicans now refuse to raise the federal borrowing limit unless Congress enacts spending cuts at the same time. The 2017 tax cuts also turned out to be unpopular because many voters felt they favored businesses and the wealthy too much. That’s one reason Republicans took a drubbing in the 2018 midterm elections.
Given the mushrooming national debt, even a Republican president would have trouble extending the individual tax cuts beyond 2025. But the setup plays right into Biden’s tax agenda. He wants to raise taxes on individuals earning more than $400,000, in some cases by a lot. That will happen automatically at the end of 2025 if Congress does nothing. If Biden’s president then, expect him to push for letting all the individual tax cuts expire, except for earners below $400,000. He could use Republicans’ logic to argue that the gargantuan national debt requires these higher taxes.
Raising business taxes would be harder, but Biden could argue for higher business taxes to finance the extension of the Trump tax cuts for lower earners. That would be politically popular. Biden tried to hike the corporate tax rate to do that during his first two years and failed, even though Democrats controlled both houses of Congress. That was because the Democrats’ one-vote margin in the Senate wasn’t enough to overcome the objections of a couple of moderate Democrats. It would be different in 2025, however, because Biden could frame it as a tax hike for business financing a tax cut for ordinary Americans. The national debt will probably be about $6 trillion larger by then, aiding Biden’s case for raising taxes. He would probably need Democrats to keep control of the Senate and regain the House, though.
Green energy everywhere. Biden is already pushing the most ambitious green-energy program in US history, including hundreds of billions of dollars in incentives Congress passed last year, stretch goals to slash tailpipe emissions and promote electric vehicles, and a forthcoming plan to drastically cut carbon pollution at power plants. There’s plenty that could go wrong — and lots of opposition from industries that would face higher costs, lost customers or other types of disruption. President Obama, during his second term, also enacted aggressive rules to address global warming. Trump reversed nearly all of them, highlighting the vulnerability of transformative policies to the whims of politicians.
A Republican president who takes office in 2025 would very likely ease, and in some cases rescind, many of Biden’s environmental policies. But if Biden wins, a couple of crucial things will happen. First, all the automakers, utility firms, energy drillers and other businesses affected by Biden’s plans will have more certainty about the future. They’ll know the Biden rules are here to stay and will plan for that, instead of hedging their bets in case a Republican wins. By the next presidential election, in 2028, many of the Biden policies could be established norms that would make no sense to undo.
Another Biden term would also provide some running room for inevitable legal challenges to play out. The Supreme Court will probably end up deciding key legal questions, such as whether the Biden administration is exceeding its authority by setting strict pollution rules without Congressional action. A new administration revoking many of the Biden rules would leave many such questions unanswered, since legal challenges would become moot. Whether the court’s decisions are favorable to Biden or not, they will lay the groundwork for the more aggressive government hand that’s probably necessary to make meaningful progress combatting climate change.
An answer on student-debt relief. This is another huge legal question: Biden signed an executive order last year forgiving up to $20,000 in student debt per borrower, which opponents promptly challenged in court. The Supreme Court is due to issue a ruling by early summer. Then what? If the court blocks the move, which seems likely, there are other tactics Biden could try. Those would face legal challenges, too, and possibly end up at the Supreme Court, as well, maybe next year. If the court shoots down all efforts to forgive student debt by executive action, the only alternative left would be a Congressional law allowing forgiveness. That would likely stand.
The current Congress won’t take up any such bill, since Republicans control the House and they’re opposed to student debt relief. That would make it a big 2024 campaign issue, and Biden would probably run on it hard. Young voters have become an important constituency for Democrats, and student-debt relief is one of their top issues. Biden might not be able to muster the votes or a debt-relief bill, since some moderate Dems don’t like the idea, either. But debt relief would either happen definitively or disappear in a second Biden term.
Don’t worry, there will be plenty of other issues to debate when 2028 rolls around.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman
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