Politics Strong economic growth, stock market gains not good enough for Biden: top advisor
Biden's capital gains tax hike to 39.6% will send rates soaring
President Joe Biden's proposed tax hike will cost high-earning Americans in more than a dozen states upwards of 50% on their long-term capital gains and other qualified dividends. Nearly doubling the federal capital gains rate could discourage those making more than $1 million from investing in the stock market as it’s increased from 23.8 per cent to 39.6 per cent, which would lower the GDP by 0.1 per cent and reduce federal revenue by around $124 billion over 10 years, according to the Tax Foundation.
President Biden will not consider a strong year for economic growth and the stock market to be a successful rebound from the coronavirus recession, one of his top economic advisors said Tuesday.
Jared Bernstein, a member of the White House Council of Economic Advisors, said Tuesday that Biden will not consider the recovery from the downturn to be complete if it does not provide greater access to education, health care, and well-compensated jobs for low and middle-income families.
"From the perspective of President Biden, if he presides over an economy with strong [gross domestic product] growth, a big rising stock market where quality jobs, access to higher education and childcare do not reach the middle class and people of low income, he will consider that not to be the success that he is seeking," Bernstein said during a virtual interview hosted by Politico.
Fact check: Biden's speech had an estimated 26.9 million viewers
The president’s first address to Congress had 26.9 million viewers, not 11.6 million as claimed in a social media post.An April 29 Facebook post from James T. Harris, a conservative radio host and social media personality, lists television ratings for five past presidential addresses — four from former President Donald Trump and one from Biden. The post says Biden’s address to Congress had only 11.6 million viewers, compared to 37.2 million viewers for Trump’s 2020 State of the Union speech.
The U.S. economy is on track to grow by 6 percent or more this year and bring millions of Americans back to work after more than a year of pandemic-related challenges. Even so, Bernstein expressed concerns about the "K-shaped dynamic" of the recovery.
While the rapid rebound of the stock market and housing market in mid-2020 boosted the wealth for many financially stable Americans-the upper prong of the "K"- those who lost their jobs or experienced economic hardship because of the pandemic-the lower prong- have struggled to stay afloat.
"If you're only looking at overall growth and if you're looking at a stock market wherein, by the way, the bottom half owns virtually no shares of stock at all, you're absolutely going to miss this President's agenda," Bernstein said.
5 winners and 3 losers from President Biden’s first congressional address
Winner: Obamacare. Loser: Wall Street.“After just 100 days — I can report to the nation: America is on the move again,” Biden said during his speech. “Turning peril into possibility. Crisis into opportunity. Setback into strength.
The state of the economy come November 2022 could play a crucial role in whether Democrats are able to defend narrow Democratic majorities in the House and Senate during Biden's first midterm election. Midterm elections often bode poorly for the party in control of the White House and just a handful of Republican pickups could derail Biden's legislative agenda.
Biden and Democratic lawmakers are hoping to cement a strong rebound across all levels of the economy through a total of roughly $4 trillion on infrastructure projects and social safety net expansion. While Republicans say they're willing to strike a deal on physical infrastructure, Democrats will likely attempt to pass the rest of Biden's proposal through budget reconciliation, which would require only simple majorities in each chamber.
"Anyone who wants to come to the table to talk about these goals is more than welcome," Bernstein said. "They're gonna need to bring something real when they sit down with him because he's playing in a very real ballgame here."
Transcript: Joe Biden delivers speech to joint session of Congress .
The president spoke to a limited crowd due to the pandemic. The setting was very different from a typical address, though. Due to the pandemic, tickets were limited and social distancing rules were in place.