Biden's most populist proposals in the State of the Union

Enough people are talking about his age. Let's focus on the issues.

Welcome to a Tuesday edition of Progress Report.

Much of the mainstream media coverage of President Biden’s State of the Union address tonight will be qualitative and vibes-based, with assessments of the clarity of the president’s voice, assuredness of his presentation, and the ease of his mannerisms, all really just ways of commenting on how old he seemed.

There’s really no winning there for Biden, because even if he aces it, the coverage will still remind people of his advanced age. It’s not particularly illuminating for voters, either, because polls indicate that most voters are already concerned about handing a second term to an 81-year-old who has lost a step or two. I share that concern, but as a reporter, I know that it’s not particularly helpful coverage, because polling shows that people are most concerned about their material conditions and the economy.

With that in mind, I’ve compiled the various economic policy proposals that the president will make tonight so that people have somewhere to read and evaluate his actual plans for a second term instead of a pundit’s evaluation of his body language.

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Many Americans will be looking to Biden’s comments on Israel’s relentless war on the Palestinians trapped in Gaza, which is in many ways the most pressing moral issue we face at the moment. Details on the president’s latest pivot can be found in this story. Below, I’ve laid out the most important economic policies proposed by President Biden in tonight’s State of the Union address.

Note: Speaking from a more progressive position, there are plenty of policies that I’d love to see, like the public health insurance option that he pitched during the 2020 campaign, that are missing from Biden’s list of proposals. This list isn’t an enthusiastic endorsement of his platform — which is much better than Republicans’, of course — so much as a resource for people.

Corporate Power

Raise corporate income tax rate:

Donald Trump’s signature tax plan lowered the corporate tax rate to 21%, which Biden proposed lifting to 28% shortly after entering office in 2021. Democrats failed to pass the increase despite the fact that they controlled both the Senate and the House (guess who was responsible). Biden is re-asserting his call to increase the tax rate, which has no chance of passing a House controlled by Republicans, who are likely to propose cutting the tax even further. Not a bad contrast, I’d say.

Increase the minimum tax on corporations:

The Inflation Reduction Act established a minimum corporate tax of 15% so that major corporations could no longer use loopholes and tax havens to avoid a bill from the IRS. Now he wants to up it to 21%.

Ending tax breaks for highly paid employees:

Employers typically receive tax breaks for paying their payroll taxes, which means companies that pay exorbitant salaries get a fair amount of that money back from the public coffers. Under this proposal, companies wouldn’t be eligible for deductions on salaries that exceed $1 million.

Taxing stock buybacks:

Major corporations reward shareholders by purchasing large tranches of their own stock, thereby raising the price and increasing the value of their portfolios. Companies are expected to buy back $1 trillion worth of their own stock in 2025 — unless Biden’s plan to quadruple the tax on those buy backs comes to fruition.

Taking on junk fees and ripoffs:

Cracking down on hidden fees that send prices soaring at checkout has been a key focus of Biden’s first term, especially since Democrats lost the House in 2022. He’s taken a series of executive actions to require more transparency on prices and crack down on some of the most exploitative practices, most recently reducing late fees on credit cards from $32 to $8.

The administration has put in motion a series of additional new rules that would force airlines to compensate travelers for flight cancelations and reduce overdraft fees among other things.

Reducing healthcare expenses

Expand Medicare drug price negotiations:

The Inflation Reduction Act authorized Medicare to negotiate the prices of up to 20 drugs per year by 2028. Biden wants to raise the threshold to 50 drugs per year. Get ready for more lawsuits!

Cap out of pocket costs on prescription drugs:

Starting in 2025, Medicare beneficiaries will have their annual outlay for prescription drugs capped at $2,000. The White House wants to extend that policy to Americans who have private insurance, in part by taking on the money-sucking scourge of Prescription Benefit Managers.

Make Affordable Care Act subsidies permanent:

The Inflation Reduction Act made subsidies available for private insurance plans bought on the Obamacare market for an additional two years, extending the expiration date to January 2025. The formula ensures that participants won’t pay more than 8.5% of their household income on insurance and the White House wants Congress to make those subsidies permanent. Without a further extension, 13.5 million people will lose out on the funding that allows them to afford a decent healthcare plan.

Helping working families

Expand the child tax credit (again):

The provision of the American Rescue Plan that expanded the child tax credit and deposited the monthly benefit directly into people’s bank accounts helped cut child poverty by an astounding 50%, making it by far the most popular and successful policy of Biden’s first term in office.

Unfortunately, Congress only authorized it for a single year, and because Joe Manchin’s idea of centrism is allowing child poverty to balloon again because he convinced himself that single mothers used the monthly income (it averaged out to $215 per month for 39 million families) to buy drugs. The expiration of the tax credit has been a major blow to the finances of working families and a drag on their perceptions of the economy.

The Senate has been working on crafting a much smaller boost with stingy House Republicans, but Biden is proposing that they bring the whole thing back from the dead.

Increasing the earned income tax credit:

Tax credits that don’t go directly to people’s bank accounts are often hard to obtain, especially for low-income Americans, but the earned income tax credit is still one of the most effective tools for fighting poverty. Biden wants to increase the EITC by an average of $800 per year for the 19 million families that receive it.

Taxing the Rich

Increasing the tax on the wealthiest .01%:

Without Kyrsten Sinema to stand up for private equity titans, the White House wants to take another shot at ensuring the wealthiest Americans pay their fair share of taxes. Under its proposal, anyone making over $100 million would have to pay a minimum tax rate of 25% — still lower than they should pay, but far more than most pay right now.

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