Beyond 2020: Post-Election Policies

Episode Summary

Executive Summary: The episode examines how a Trump or Biden victory could reshape U.S. economic policy, focusing on taxes, stimulus, trade, regulation, growth, and foreign policy. Hassett argues Trump would extend tax cuts, keep deregulation, and continue tariff-based bargaining, while Bernstein says Biden would prioritize virus control, relief, and a major structural agenda funded by higher taxes on high earners. Bremmer adds that domestic policy would diverge far more than foreign policy, though Biden would deepen multilateralism and U.S.-Europe coordination.

Main Topics: Election stakes and economic policy divergence (Priority: 5/5): The conversation frames the 2020 election as unusually consequential because the candidates represent sharply different domestic policy directions with major implications for growth, markets, and the policy mix. Trump second-term agenda: taxes, infrastructure, deregulation, tariffs (Priority: 5/5): Hassett says a second Trump term would likely extend expiring tax cuts, pursue a new middle-class tax proposal, revive infrastructure, preserve low-regulation conditions, and keep tariffs as a negotiation tool. Biden agenda: virus control, relief, and 'Build Back Better' (Priority: 5/5): Bernstein lays out a sequence of virus suppression, targeted relief, and long-run structural investment in climate, childcare, health care, and labor-market resilience, financed by progressive tax increases. Trade policy and supply chains (Priority: 4/5): The speakers contrast Trump's tariff-led bilateral pressure with Biden's coalition-based trade strategy, onshoring incentives, and more worker-centric trade agreements. Regulation, labor, and sector-specific rollbacks (Priority: 4/5): Trump is portrayed as continuing broad deregulation, while Biden would reverse climate, ACA, anti-immigration, and labor-related rollbacks and strengthen worker bargaining power. Growth outlook under each candidate (Priority: 4/5): Hassett expects a strong rebound under Trump if the economy stabilizes, but warns Biden tax hikes could trigger recession; Bernstein argues Biden's investments in childcare, clean energy, and education would boost labor supply and growth. Foreign policy continuity vs. style differences (Priority: 4/5): Bremmer argues foreign policy differences are narrower than domestic ones: both administrations would remain hawkish on China and Russia, while Biden would revive alliances with Europe and multilateral cooperation.

Key Arguments: Trump would likely prioritize making permanent expiring tax cuts and could pursue additional middle-class tax relief, especially if the economy remains weak and COVID recovery is incomplete. A second Trump term would probably continue deregulation, which Hassett says strongly benefits small and medium-sized businesses and supports entrepreneurship. Hassett argues tariffs have been an effective negotiating mechanism for Trump, helping extract concessions from allies and trading partners. Biden’s economic team sees virus control as the prerequisite for a durable recovery; without it, sustainable growth is unlikely. Bernstein argues the next relief package should be highly targeted toward high-multiplier spending such as SNAP, unemployment insurance, anti-eviction measures, and state/local aid. Biden’s permanent policy agenda would require tax increases concentrated on households above $400,000, with some measures only affecting those above $1 million in AGI. Bernstein argues Biden’s tax-and-spend mix should be judged on both sides of the ledger, since many proposed investments and tax credits are pro-growth. Biden’s trade strategy would shift from unilateral tariffs to coalition-building, domestic industrial policy, and incentives to onshore manufacturing. Bremmer says domestic policy would be far more transformed under Biden than foreign policy, potentially producing the largest U.S. domestic policy shift in decades. On China, Bremmer expects continuity on core strategic issues such as technology, Hong Kong, Taiwan, and supply-chain competition, with more diplomacy and guardrails rather than a dramatic reset. On Europe, Bremmer expects a major improvement in transatlantic relations under Biden, especially around climate, vaccines, and multilateral coordination.

Data Points: Obama-era economically significant regulations: just under 500 - Hassett compares the number of economically significant regulations during Obama’s eight years with Trump-era rollbacks. Trump-era economically significant regulations expected by year-end: 16 - Hassett says the administration would end the year with only 16 new economically significant regulations. Real median household income growth in 2019: $4,379 - Hassett cites pre-COVID income growth as evidence of momentum entering 2020. Comparison to Obama’s eight years: $1,300 more - Hassett says 2019 median household income growth exceeded the total increase over Obama’s eight years by $1,300. Biden tax threshold: above $400,000 - Bernstein says Biden’s proposed tax increases begin above $400,000, affecting top earners. Capital gains tax threshold: over $1 million in AGI - Bernstein notes some Biden pay-fors, like taxing realized capital gains as ordinary income, begin above $1 million adjusted gross income. First-time homebuyer tax credit: $15,000 - Bernstein lists a Biden tax credit for first-time homebuyers as a growth-supporting measure. Child and dependent care credit: $8,000 per family - Bernstein cites a refundable childcare-related tax credit in Biden’s plan. State and local fiscal relief in prior House proposal: $100 billion - Bernstein references the Heroes Act as a model for aid to states and localities. Childcare investment program: $775 billion - Bernstein cites Biden’s large childcare plan as a key pro-growth structural investment. ACA uninsured trend: increase after a 5–6 percentage point drop - Bernstein says uninsured rates fell by five or six points after ACA enactment, then rose again under Trump. Free public college threshold: families below $125,000 - Bernstein mentions Biden’s proposal for free tuition to public universities for lower-income families.

Pivotal Quotes: "The priorities actually do lend themselves to a sequencing, which is one, virus control, two, relief recovery, and three, what the vice president calls his building back better agenda." — Jared Bernstein: Bernstein outlines the Biden administration’s policy roadmap. "I think that tariffs have been a very effective negotiating mechanism for him." — Kevin Hassett: Hassett explains why Trump would likely continue using tariffs in a second term. "This would be a more significant shift, really seismic, than anything we've seen in decades in the United States." — Ian Bremmer: Bremmer describes the scale of a potential Biden domestic-policy realignment.

Implications: The episode suggests a Trump win would reinforce low-tax, low-regulation, tariff-heavy policy, while a Biden win would mean larger government, more redistribution, and stronger multilateralism. Markets, labor, trade, and climate policy would likely respond very differently under each path.