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Biden's middle-class focused economic approach

President-elect Joe Biden on Tuesday announced an “economic team” that will be sharply different in makeup and approach than that of the current administration.

Biden’s nominees for the top economic and fiscal positions are ethnically, racially and gender diverse — reflecting the nation these officials will serve — while the same posts in the Trump administration have been held largely by white men.

The economic management team in the current administration has focused on a top-down approach by easing regulations and cutting taxes, arguing this pro-business, pro-rich policy ultimately benefits the middle class through job creation and 401-k-boosting market expansion. The nominees introduced Tuesday by Biden placed their focus, instead, on directly helping and expanding the middle class. A strong middle class is central to sustained economic expansion that benefits most, not just some.

Introduced as the future Treasury secretary was former Federal Reserve chair Janet Yellen, who while on the Fed advocated for keeping interest rates low to encourage job expansion and wage growth.

Yellen cited the need to address "stagnant wages, especially for workers who lack a college education.” She also set as a goal addressing unfair “small-business lending that denies wealth building to so many communities of color.”

Biden’s pick for director of the Office of Management and Budget is Neera Tanden, the chief executive officer of the Center for American Progress, which has the stated mission of “improving the lives of all Americans, through bold, progressive ideas, as well as strong leadership.”

Biden’s economic team will only be as good as the policies the next president pursues and his ability to get those policies through what will remain a divided Congress, with Democrats in control of the House and Republicans likely to maintain control of the Senate, both by narrow margins.

Unsurprisingly, Biden has named appointees that line up with his campaign platform, which focused on revitalizing the middle class and making it more racially inclusive. These goals align with this editorial board’s policy priorities.

A large middle class was this nation’s strength from the post-World War II period into the 1970s, but has been eroded by a growth in corporate control, diminished union power, the outsourcing of jobs, and a massive transfer of wealth to the richest Americans.

This shift has been exacerbated by events of the 21st century. While the top 20% have fully recovered from the Great Recession, and then some, the middle class has not yet reached its previous peak in 2007, before the recession hit, according to the Brookings Institution. Now, as a result of the economic fallout from the pandemic, tens of millions of more Americans are threatened with falling out of the middle class or finding it further out of their reach.

What will be Biden’s approach?

The first order of business — to limit the damage from the current crisis — would be approval of another economic stimulus bill, some form of which the president-elect wants passed before he takes the oath of office Jan. 20.

Once in office, Biden will seek to expand Obamacare, including providing a public health insurance Medicare-like option to keep a lid on private-sector premiums. He wants to expand Medicaid to states that have resisted it, and to introduce drug price controls.

Biden proposes boosting the minimum wage to $15 per hour, similar to the phased-in approach Connecticut is using to reach that number. Boosting the federal minimum wage, now a paltry $7.25, has popular support and Democrats should push hard on that proposal.

The next president says he will seek large public-private investments in American research, development, training and education to expand the nation’s manufacturing capabilities and reduce importations, providing the American workers-first approach Trump trumpeted but did not deliver.

Some form of federal student-debt relief would unleash the buying power of recent college graduates. And Biden wants the federal government to invest in rural broadband infrastructure, improve access to federal programs for small farms and businesses, and expand health services in these communities. Such steps are not only good policy, but can build a bridge to rural communities that Democrats have too long ignored.

Reversing massive tax cuts for the rich and corporations would help pay for it all.

Our expectation is this middle-class agenda would prove popular with Americans. Biden’s great challenge is finding paths to enactment, including getting the American people behind him in demanding an end to political stagnation.

The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Editorial Page Editor Paul Choiniere, Managing Editor Izaskun E. Larrañeta, staff writer Julia Bergman and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.


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