Five key economic points in Biden’s 2023 State of the Union address to Congress

President Joe Biden delivers the State of the Union address to a joint session of Congress at the U.S. Capitol, Tuesday, Feb. 7, 2023, in Washington, as Vice President Kamala Harris and House Speaker Kevin McCarthy of Calif., applaud. 

Pool | Via Reuters

President Joe Biden delivered his second State of the Union address to Congress on Tuesday night, marking the halfway point of his tenure. It was an opportunity for him to highlight his administration’s achievements to date, as well as set the tone for how he hopes the next two, possibly more, years go.

Biden has been upbeat on his economic policies after recent reports showed near record low unemployment and strong job growth, but his speech exhibited his broader ambitions to reshape the economy into one that grows “from the bottom up and the middle out, not from the top down.”

Here is the economic news you missed:

Return of the billionaire tax?

Biden renewed his call for levying a tax on billionaires and corporate stock buybacks to reduce the federal deficit.

“The tax system is not fair; it’s not fair,” Biden said. “The idea that in 2020, 55 of the largest corporations in America, of Fortune 500, made $40 billion in profits and paid $0 in federal taxes? $0? Folks, it’s simply not fair.”

The idea was popularized by progressives like Senators Elizabeth Warren and Bernie Sanders in the 2020 campaign. Biden has vowed to not raise taxes on Americans earning under $400,000 annually.

“Now because of the law I signed, billion dollar companies have to pay a minimum of 15%, God love them,” Biden said to jeers by Democrats. “15%! That’s less than a nurse pays!”

Biden previously proposed a 20% tax on billionaires in March of last year as part of his federal budget. In Tuesday’s State of the Union address, Biden called on Congress to “finish the job.” The proposal did not gain much traction then and is unlikely to go anywhere in the Republican-controlled House.

War on ‘junk fees’

Biden continued his crusade against unnecessary “junk fees” from banks, airlines, cable companies and other industries which add surprise costs to consumer bills.

“Look, junk fees may not matter for the very wealthy but they matter to most other folks 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 proposed a new rule to ban excessive credit card late fees last week. Congress banned excessive fees in 2009, but the Federal Reserve Board of Governors issued actions to circumvent the law.

Biden in his speech called on Congress to pass the Junk Fee Prevention Act which would impose further restrictions on excessive fees tacked onto travel and event tickets.

“Airlines can’t treat your child like a piece of baggage. Americans are tired of that. They’re tired of being played for suckers.”

Antitrust takes center stage

In addition to junk fees, Biden’s administration has been dogged in addressing antitrust concerns, a point the president stressed in his State of the Union address. Biden issued an executive order in October allowing hearing aids to be sold over the counter, making them much cheaper for the average consumer.

“Look, capitalism without competition is not capitalism, it’s extortion,” Biden said Tuesday night.

The White House repeated the line in November when Ticketmaster’s parent company Live Nation botched the rollout of tickets for Taylor Swift’s Eras Tour, prompting an antitrust probe. The company was later grilled by members of the Senate Judiciary Committee for antitrust practices.

“Let’s finish the job, pass the bipartisan legislation to strengthen antitrust enforcement to prevent big online platforms from giving their own products an unfair advantage,” Biden said.

Labor 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 feel pride in what we do.”

He berated companies that make workers sign noncompete agreements, referring to an executive order signed last month that encourages the Federal Trade Commission to ban or limit noncompete agreements. Biden said 30 million Americans have had to sign noncompete agreements from positions ranging from executives to fast-food cashiers.

Further, Biden called on Congress to pass the Protecting the Right to Organize Act restores employees’ rights to unionize without retaliation.

“I’m bound to get a response from my friends on my left, but the right,” Biden said referring to Republicans. “I’m so sick and tired of companies breaking the law by preventing workers from organizing. Pass the PRO Act!”

Biden went on to call for workers to have access to sick days, paid family leave and affordable childcare.

Expanding the insulin price cap

Drug prices were again top of mind for Biden. The president called for broadening the $35 price cap on insulin passed in the Inflation Reduction Act for Medicare to privately insured Americans in need.

“One in ten Americans had diabetes, many people in this chamber do, in the audience,” Biden said. “And every day millions need insulin to control their diabetes so they can literally stay alive.”

Biden chided drug companies for hiking the price of insulin from roughly $10 a bottle to make, up to hundreds of dollars a month, “making record profits,” off of the drug. He cheered Congress’ measure to cap the cost for Medicare recipients, but stressed it needed to be expanded.

“There are millions of other Americans who are not on Medicare, including 200,000 young people with Type 1 diabetes that need this insulin to stay alive,” Biden said. “Let’s finish the job this time. Let’s cap the cost of insulin for everybody at $35.”

What does this mean?

Many of the ideas proposed by Biden, like the billionaire tax and PRO Act, are going to be tough sells in the Republican-controlled House and likely dead on arrival.

The White House and House Republicans are already at a stand-still on whether Congress will lift the debt ceiling, a routine measure done for decades consistently without conditions. House Republicans are threatening to allow the country to default on its debt obligations if Biden does not agree to spending cuts he believes should be handled separately. One month into the new Congress, the situation is a peek into how other negotiations will play out.

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