POLICY BRIEFING BIDENOMICS T - HE ECONOMIC STRATEGY OF THE BIDEN ADMINISTRATION

Addressing the economic challenge from China.9 American Rescue Plan The American Rescue Plan builds on the March 2020 CARES Act and the December 2020 Consolidated Appropriations Act to provide temporary federal government economic relief to mitigate the impacts of the ongoing covid-19 pandemic in the United States. [...] The primary differences are the introduction of climate and the environment; the commitments to supporting wages and conditions across the world; and the commitment from the Biden administration to “repairing partnerships and alliances” damaged by Trump’s Presidency as a “priority”. [...] He cites the Congressional Budget Office as estimating the “output gap” (the gap between actual and potential output) as shrinking from $50bn at the start of 2020 to $20bn by its end, as the economy returns to rapid growth.30 In this view, the long-term “scarring” effects of the pandemic are assumed to be limited, scarcely reducing the capacity of the economy, meaning the output gap closes rapidly. [...] The risk of a Senate filibuster blocking some or all of both, with a 60% supermajority required to break it, the deep hostility of the Republican Party, and the fiscal conservatism of a few Democratic Senators has pushed the administration into opening negotiations with the Republican Party. [...] But the close historic links of the US and the UK make the parallels more exact; and both Democratic and Labour Parties face similar challenges, common across the older industrialised world, of holding together disparate coalitions of support: from solid new bases, often of the young and minorities, in major cities to historic (but weakening) support from often older voters in parts of the country.