Joe Biden and Kamala Harris' victory in Pennsylvania on Saturday put him above the 270 Electoral College votes needed to secure the presidency, although President Donald Trump does not plan to concede anytime soon - Photo: Privacy

“There will be no blue states and red states when we win, just the United States of America”

JAKARTA (TheInsiderStories) Joe Biden and Kamala Harris’ victory in Pennsylvania on Saturday put him above the 270 Electoral College votes needed to secure the presidency, although President Donald Trump does not plan to concede anytime soon. In his winning speech, the “elect president” says he will “work as hard for those who didn’t vote for me as I will for those who did vote for me”

Rated their winning, Fitch Rating sees, a victory for Democratic challenger with Democrats controlling the Senate would likely mean more expansive fiscal measures to combat the effects of the pandemic and tightened regulations over key segments of the economy. Fitch assumes that Democrats retain control of the House in both outcomes.

Response to the ongoing economic and health effects of the pandemic will be an immediate focus for the new administration, although strategies will contrast in where and how to target aid. Meaningful differences between the two major parties’ policy orientations mean that the impact on ratings will vary by outcome, in some cases compounding existing challenges from the pandemic.

Key policy areas where this split matters most include fiscal stimulus and entitlement reform, taxes, the regulatory environment, foreign policy and trade, healthcare and infrastructure. Fitch said, Biden victory would likely mean larger stimulus followed by additional measures to bolster healthcare access and other social support programs.

The scale and breadth of additional stimulus will affect sectors including US public finance, healthcare, real estate, student loans and financial institutions. Others said, a victory for Biden in the US presidential election will likely ease some jitters in the financial markets, even aTrump refuses to concede and presses ahead with legal fights against the outcome.

But with control of the Senate still up in the air and the fresh resurgence in virus cases market risks linger and the prospect of additional economic stimulus before January is unlikely. A fiscal stimulus package to combat the economic damage done by the coronavirus is also less likely to be broad.

In addition, PwC rated, the US election outcome faces legal actions in several states, and control of the Senate is still undecided, businesses are nonetheless looking ahead to January when the 117th Congress will convene to certify the election results and likely put Democrat Joe Biden on course to take the oath on Inauguration Day.

A Biden administration will face a complicated working environment on the Hill. Republicans hold the edge in the Senate but control could shift in January with two runoffs in Georgia. In the House, Democrats are projected to retain a narrower majority.

If Republicans hold the Senate, Congress will likely act to moderate the pace of any policy ambitions. At the same time, there will be interest in finding common ground. Containing the pandemic, spurring job growth and bolstering confidence are priorities on both sides of the aisle. Additional economic stimulus spending is top of mind, as well as how quickly it can work into the US economy.

In the near term, Congress must eventually act on legislation to fund the federal government beyond December 11, when a temporary spending measure expires. Congress also could act on a limited number of other issues, including additional pandemic relief legislation and proposals to extend more than 30 business and individual tax provisions that are set to expire at the end of 2020.

What to expect from a Biden administration

The new administration will try to secure as much of its 2021 agenda as possible, with much riding on progress with safe and effective vaccines. Among the items we’ll be watching at the start of a new legislative year policymaking process as Biden summons his experience as a veteran lawmaker, with eight years in the White House, to find common ground.

Negotiations for additional economic stimulus are possible during the lame duck session in 2020, but some leaders may prefer to wait for the new Congress to convene in January. Republicans may support a package of around US$1 trillion, which could include some amount of support for state and local governments. This is well below the $2.5 trillion passed by the House in October.

Significant challenges are expected to Biden’ proposed corporate tax rate increases if Republicans retain control of the Senate. If Democrats gain control in a 50 – 50 Senate, Biden could still face challenges in gaining support from conservative Democrats for his tax proposals.

Incentives for onshoring and renewable energy investments rising in prominence among policy levers to spur job growth with protectionist tendencies remaining in place in the first year. Frequent initiatives to urge corporate America to redouble its efforts related to diversity and inclusion, wages, job creation, immigration, and environmental and governance matters.

Biden is intimately familiar with the policymaking processes behind major legislation. His potential outreach to both Republicans for cabinet positions and to the left wing of his own party could signal a more consensus-oriented approach to solving problems such as economic inequality and immigration, concluded by PwC.

Edited by Editorial Staff, Email: theinsiderstories@gmail.com