A new report reveals how stock buybacks have inflated CEO paychecks and widened pay gaps at the 100 largest low-wage corporations.
What Can Biden Say About the Economic State of Our Union?
Strong jobs numbers are not enough. The president should keep pushing a bold legislative agenda while deploying every executive tool at his disposal to achieve a more equitable economy.
Blogging Our Great Divide
February 24, 2022
President Joe Biden moved the date of the State of the Union from the traditional late-January period to March 1, with high hopes that by then he would have good news to share about his economic policy agenda.
Instead, two dark clouds will be hanging over his speech: the Russian invasion of Ukraine and the stalled negotiations over the president’s Build Back Better proposals.
The leader of the world’s most powerful country has spent much of the past few months pleading with Putin not to invade and pleading with Democratic Senators Joe Manchin and Kyrsten Sinema to stop blocking his economic agenda. Sadly, these pleas fell on deaf ears.
In his speech, Biden will need to acknowledge the limits to his power and the deep suffering of so many here and around the world. But he should also tout the economic achievements under his administration — and commit to using every tool in his executive action toolbox to make further progress without waiting for Congress to act.
People who like to play State of the Union games should definitely have “jobs” on their bingo cards and drinking lists. Biden will no doubt utter this word numerous times, since rapid job creation is one of the brightest spots of his presidency so far. The U.S. economy added 6.4 million new jobs in 2021 and another nearly half million in January 2022, bringing the unemployment rate down to 4 percent. We may even see pre-pandemic employment levels by July.
We can thank Covid relief legislation, including the $1.8 trillion American Rescue Plan of 2021, for the speed of the jobs recovery.
“There’s still a long way to go,” Economic Policy Institute President Heidi Shierholz tweeted, “but we’re on track to recover from this recession eight years faster than we recovered from the Great Recession, because of our policy response.”
Of course jobs data don’t tell the whole story of our union’s economic state. Inflation has taken a bite out of family incomes and savings — a bite made more painful by the U.S. Senate’s failure to pass the Build Back Better Act. The bill the House passed last fall would’ve raised taxes on the wealthy to pay for child care, home care, housing, and other investments to help American families become more economically secure in the face of inflation and other challenges. But on the Senate side, Democrats Manchin and Sinema and all Senate Republicans have blocked the bill.
The Senate gridlock’s most immediate blow to families came in January, when the supplemental Child Tax Credit that would’ve been renewed under the Build Back Better Act was left to expire, pushing 3.7 million children into poverty.
Biden cannot do an end run around Congress to tackle inequality and poverty at anywhere near the scale that would be achieved under the Build Back Better Act. And so efforts need to continue to reach an agreement on that legislation. But in the meantime, Biden should use executive authority in meaningful ways to move the ball forward.
He has already used this authority to raise the minimum wage for federal contract workers to $15 an hour. Nearly 400,000 workers, more than half of whom are Black or Latino, are getting raises averaging $3,100 thanks to this action.
Biden could go much further to use the power of the public purse to lift up American workers and reduce economic, gender, and racial inequality.
For instance, Biden could make it hard for companies with huge gaps between CEO and worker pay to get a taxpayer-funded contract. The administration could also require that federal contractors offer paid family and sick leave and commit to staying neutral in union organizing campaigns. And they could make it easier for companies with good records on racial and gender diversity to move to the head of the line in contract bidding contests.
Biden could also use his executive powers to cancel student debts held by the federal government, a move that would help all those suffering under this financial burden while making a significant step forward in narrowing the racial wealth divide. Roosevelt Institute researchers estimate that canceling up to $50,000 in federal student loan debts would increase the wealth of Black Americans by 40 percent.
The president also has the power to reduce pharmaceutical prices by giving overpriced and urgently needed drugs developed with federal assistance to generic producers.
He could also lessen the hardships faced by immigrant families by discontinuing the Trump-era Title 42 policy, which has been used to rapidly expel thousands of migrants, without giving them a chance to apply for asylum within the United States.
These are just a few examples of executive actions the Biden administration could take to build a more equitable and sustainable economy.
If Congress can’t deliver for American families, the president needs to be clear that he’s done pleading and prepared to take action on his own.