President Biden used his State of the Union speech on Thursday to remind Americans of his efforts to steer the nation’s economy out of a pandemic recession, and to lay the groundwork for a second term focused on making the economy more equitable by raising taxes on companies and the wealthy while taking steps to reduce costs for the middle class.
Mr. Biden offered a blitz of policies squarely targeting the middle class, including efforts to make housing more affordable for first-time home buyers. The president used his speech to try and differentiate his economic proposals with those supported by Republicans, including former President Donald J. Trump. Those proposals have largely centered on cutting taxes, rolling back the Biden administration’s investments in clean energy and gutting the Internal Revenue Service.
Many of Mr. Biden’s policy proposals would require acts of Congress and hinge on Democrats winning control of the House and the Senate. However, the president also unveiled plans to direct federal agencies to use their powers to reduce costs for big-ticket items like housing at a time when the lingering effects of inflation continue to weigh on economic sentiment.
From taxes and housing to inflation and consumer protection, Mr. Biden had his eye on pocketbook issues.
Raising Taxes on the Rich
Many of the tax cuts that Mr. Trump signed into law in 2017 are set to expire next year, making tax policy among the most critical issues on the ballot this year.
On Thursday night, Mr. Biden built upon many of the tax proposals that he has been promoting for the last three years, calling for big corporations and the wealthiest Americans to pay more. He proposed raising a new corporate minimum tax to 21 percent from 15 percent and proposed a new 25 percent minimum tax rate for billionaires, which he said would raise $500 billion over a decade.
Criticizing the cost of the 2017 tax cuts, Mr. Biden asked, “Do you really think the wealthy and big corporations need another $2 trillion in tax breaks?”
Help for the Housing Market
High interest rates have made housing unaffordable for many Americans, and Mr. Biden called for a mix of measures to help ease those costs. That included tax credits and mortgage assistance for first-time home buyers and new incentives to encourage the construction and renovation of affordable housing.
Mr. Biden called on Congress to make certain first-time buyers eligible for a $10,000 credit, along with making some “first generation” home buyers eligible for up to $25,000 toward a down payment.
The president also unveiled new grants and incentives to encourage the construction of affordable housing. He also said the Consumer Financial Protection Bureau would be pursuing new rules to address “anticompetitive” closing costs that lenders impose on buyers and sellers, and called for more scrutiny of landlords who collude to raise rents and sneak hidden fees into rental agreements.
Protecting Consumers From “Shrinkflation”
There is only so much that a president can do to tame rapid inflation, but Mr. Biden used his remarks to lean into his favorite new boogeyman: shrinkflation.
“Same size bag, put fewer chips in it,” Mr. Biden said. He called on lawmakers to pass legislation to put an end to the corporate practice of reducing the size of products without reducing their price tag.
The president also touted his efforts to cut credit card late charges and “junk” fees and to eliminate surprise fees for online ticket sales, and he claimed to be saving Americans billions of dollars from various forms of price gouging.
Building and Buying American
One of the mysteries that consume Mr. Biden’s advisers is why he does not get sufficient credit for the major pieces of legislation that have been enacted during the last three years.
The president blitzed through those accomplishments, reminding his audience of the construction of new roads and bridges and investments in the development of microchips and clean energy manufacturing.
Veering off script, Mr. Biden ribbed Republicans for voting against some of those policies while reaping the benefits of the investments in their states.
Tackling China
As president, Mr. Biden has prioritized stabilizing America’s economic relationship with China while also trying to reduce the United States’ reliance on Chinese products. Mr. Biden took aim at Mr. Trump, saying that while the former president portrayed himself as tough on China, the Biden administration’s policies were having a bigger impact on shrinking the bilateral trade deficit and powering U.S. economic growth.
The president added that his administration had been pushing back against China’s unfair trade practices and keeping exports of sensitive American technology away from the Chinese military. He said that Republicans who claim that the U.S. is falling behind China were wrong.
“America is rising,” Mr. Biden said. “We have the best economy in the world.”