Growth estimates in the name of prudence
Where Biden is cautious is instead in the growth forecasts: the growth of GDP stops, which in the first quarter of 2021 was just confirmed at 6.4%, slightly below 2% per year from 2022 to 2031 net of inflation. Unemployment would slide to 4.1% in 2022 from the current 6.1% and then below 4%. His predecessor Donald Trump was known for rosy predictions of more than 3% growth, which were then disregarded.
At the heart of Biden’s budget, as indicated, are the initiatives on which he has already raised the curtain: the Jobs Plan, which aims to restore and modernize infrastructure, with investments from roads to broadband and advanced manufacturing. And the American Families Plan, which aims at social interventions to broaden and relaunch the centrality of the middle classes, their qualification and introduction. Together they mobilize approximately 4 trillion of resources and aim, in addition to combating excessive social inequalities, to better prepare the country for the challenges of the future, from the fight against climate change with an energy transition to renewable sources, to stimulate innovation and hi -tech in competitive head-to-head with a rival power such as China.
Difficult comparison on infrastructures
On infrastructure negotiations are underway with the republican opposition that could alter costs: the White House has offered to file spending to 1,700 from the initial 2,300 billion, the conservatives have responded by raising their counter-proposal to 928 billion from just over 500 billion . Even more distant chances of compromises on the strategy for families, from anti-poverty aid to education and crèches: in Biden’s eyes the same is true but the opposition is compact. Thanks to an albeit narrow Democratic majority in Congress, Biden still has the option, if there are no defections, to snatch the passage of budget laws without Republican support.
In the budget proposal, which represents the President’s wishes and which Congress will then have to transform into law, the White House also outlines further initiatives without allocating specific funds at the moment and thus leaving them to parliament. This includes a reform of the unemployment benefit system to make it more effective. Absent are funds for a public health plan to add to Obamacare’s private options, but Biden urges Congress to take action and also lower the age for using Medicare, the federal aged care program, to 60 from 65. He is also asking for MediCare to be authorized to negotiate drug prices with pharmaceutical companies.