On a visit to an aluminium foundry in Wisconsin last week, a sombre Joe Biden mourned the grim milestone of America’s 200,000 Covid-19 deaths before quickly pivoting to his economic agenda.
“You matter,” the Democratic presidential nominee told the audience at the plant in Manitowoc, near the Lake Michigan shore. “I don’t want to punish anybody, but instead of just rewarding wealth in this country, it’s about time we start to reward work.”
While the former US vice-president campaigned in the Democratic primary as a moderate, he has laid out a much more progressive economic platform that absorbs much of the spirit and some of the ideas put forward by rivals Bernie Sanders and Elizabeth Warren, who challenged him for the nomination.
At the heart of it are tax increases for high-income households and corporations to reduce inequality and help fund a massive dose of public investment worth $3.9tn during his first term, according to a Moody’s Analytics estimate.
The policy heads
Stef Feldman is Mr Biden’s policy director after working on his vice-presidential staff, and is playing a key role in crafting his domestic economic agenda, particularly on tax and climate.
Jake Sullivan was former head of policy planning at the state department under President Barack Obama. He was central to the Iran nuclear negotiations and is a senior policy adviser, including on Mr Biden’s economic agenda.
Antony Blinken was the deputy secretary of state under Mr Obama, and is a foreign policy adviser to Mr Biden who weighs in on international trade.
Mr Biden has vowed to pour federal dollars into healthcare, education, infrastructure and clean energy, while also embracing a rise in the minimum wage and measures to boost unionisation. That is on top of any immediate stimulus — including extra funding for jobless benefits — needed to help the US economy recover from the coronavirus pandemic.
At a glance: Joe Biden’s economic strategy
Climate Increased spending of $2tn over his first term on infrastructure, clean energy and transport.
Manufacturing Higher investments worth $700bn on procurement and R&D to support industrial America.
Education and caregiving Funding totalling $775bn to boost government support for providers of help to the elderly, the sick and small children.
Taxes Mr Biden’s plans raise corporate tax revenue by $822bn, payroll tax revenue by $317bn and individual tax revenue by $303bn over his first term, according to Moody’s.
Not only is Mr Biden’s strategy the antithesis of President Donald Trump’s plan to further cut taxes and continue deregulating the economy: it also reflects the Democratic party’s leftward shift on economic issues in recent years, a transformation that began in the aftermath of the financial crisis and accelerated during Mr Trump’s presidency.
In the wake of the coronavirus recession, which has hit low-income communities much harder than wealthier parts of America, Mr Biden has become even more committed to a bolder tax-and-spend agenda, according to more than a dozen interviews ranging from campaign advisers to economists consulted by his team.
“The pandemic has pulled back the curtain on a set of embedded inequalities, racial inequities and policy shortfalls that have beset our economy and the people in it for a very long time,” said Jared Bernstein, a member of Mr Biden’s transition advisory board and his chief economist in the Obama administration.
The close aides
Ted Kaufman is co-chair of the transition team. The former Delaware senator and Biden ally played a key role in advancing the Dodd-Frank financial reform after the great recession.
Bruce Reed is the former executive director of the Simpson-Bowles deficit-reducing commission under Mr Obama and has flanked Mr Biden during the campaign.
Jeff Zients is a former consultant and director of Mr Obama’s National Economic Council and acting White House budget director. He is a co-chair of Mr Biden’s transition team and is focused more on management than policy.
Ron Klain was formerly chief of staff to both Al Gore and Mr Biden as vice-presidents, led the US response to the Ebola crisis and will be pivotal in the Covid response. He hails from the party’s moderate wing.
He added: “Simply getting back to the old normal in terms of the economy and the kind of economic policy architecture, that sets the bar far too low.”
While Mr Biden is still not in favour of staunchly progressive proposals such as a universal income or “Medicare-for-all” — which would effectively scrap America’s employer-based private healthcare system — the former vice-president has likened his plans to revive and reshape the US economy to Franklin Delano Roosevelt’s “New Deal” after the Great Depression.
“I think the scale of the agenda meets the moment with respect to the economic recession we are in, and the collision of all these crises: we have the public health crisis, the economic crisis, the climate crisis, and a crisis of racial injustice,” said Stef Feldman, policy director for the Biden campaign.
Politically, Mr Biden’s economic plans have exposed him to Mr Trump’s attempts to label him a socialist, but they could also stoke enthusiasm among the Democratic party’s liberal base. Leftwing critics of past Democratic administrations, including those run by Bill Clinton and Barack Obama, say their economic policies focused excessively on fiscal discipline and trade liberalisation, and were too deferential to business and Wall Street.
The progressive economists
Heather Boushey is the founder of the Washington Center for Equitable Growth and one of the leading US experts on income inequality.
Lisa Cook is a senior economist at Michigan State University who has focused on innovation, international development and addressing racial disparities.
William Spriggs is an economics professor at Howard University and chief economist at the AFL-CIO union.
Raj Chetty is a Harvard University professor whose speciality is fostering social and economic mobility.
Ben Harris was Mr Biden’s chief economic adviser later in the Obama administration and an economist at Northwestern University who is advising the city of Chicago on its Covid response.
“There is no question that Biden’s plan and his platform are more progressive than pretty much any Democratic standard bearer in the last 30 or 40 years,” said Michael Linden, executive director of Groundwork Collaborative, a left-leaning economic think-tank.
“Even those who you might think of as the old guard, who are more traditional, will concede that inequality is a problem, will concede that the gains to capital have far outstripped gains to labour. But there is still a debate between how far and how fast and how much to push,” he added.
As the campaign has unfolded, Mr Biden has brought several liberal economists and policy experts into his orbit as advisers — particularly Heather Boushey, whose body of research has centred around tackling inequality.
The influential leftists
Felicia Wong is president of the Roosevelt Institute, a left-leaning think-tank and a fierce critic of “neoliberalism”. She has joined Mr Biden’s transition advisory board.
Teresa Romero is the president of the United Farm Workers union, a Mexican immigrant and is on Mr Biden’s transition advisory board.
Stephanie Kelton is the leading proponent of Modern Monetary Theory — which argues that the US can deploy far more fiscal stimulus without risking a debt crisis. She was part of the unity task force that sought to find common ground between Bernie Sanders and Joe Bidens’ economic plans.
Sara Nelson is the president of the leading US flight attendant’s union. She rose to prominence during the pandemic because of the lay-offs in the sector, and was a member of the “unity task force”.
Julie Siegel is the former top economic policy adviser to Elizabeth Warren, the Massachusetts senator, and has joined Mr Biden’s transition staff.
The advisory board for his transition team includes Felicia Wong, the president of the Roosevelt Institute, who in January wrote a report calling for a “new progressivism” to replace a “neoliberalism” that had failed.
Some policies, such as a pledge to invest $1.7tn in green energy, drew heavily from a “unity task force” created with Mr Sanders this year, which included several figures from the Vermont senator’s side. Mr Biden has also adopted a bankruptcy reform plan championed by Ms Warren.
Mr Biden is still seeking plenty of moderate and more traditional left-of-centre opinions on the economy, from the likes of Janet Yellen, the former Federal Reserve chair, to Gene Sperling, a veteran of the Obama and Clinton administrations, and Larry Summers, the former Treasury secretary.
While assembling such a broad tent could paper over cracks in party unity, it is not without risks. When Ted Kaufman, the former Delaware senator and a co-chair of Mr Biden’s transition team, told The Wall Street Journal last month that Mr Trump’s disregard for fiscal discipline meant the “pantry is going to be bare” in terms of spending options, there was a backlash from the left.
“To adopt [Republican] deficit-hawking now, when millions of lives are at stake, is utterly irresponsible,” Alexandria Ocasio-Cortez, the congresswoman from New York, wrote on Twitter.
The seasoned policymakers
Jared Bernstein was chief economic adviser during Mr Biden’s first term as vice-president and is senior fellow at the left-leaning Center on Budget and Policy Priorities. He serves on the transition advisory board.
Gene Sperling was Mr Obama and Mr Clinton’s director of the National Economic Council and was a consultant on the West Wing television show. He has reportedly been involved in briefing Mr Biden.
Austan Goolsbee was Mr Obama’s former White House council of economic advisers chief. Now at the University of Chicago, he has been helping the campaign.
Janet Yellen is the former Fed chair and has briefed Mr Biden on economic policy. She has been advocating for much bigger fiscal support for the recovery.
Ms Feldman said that while Mr Biden’s long-term spending and investment plans would be funded by higher taxation, the immediate stimulus — including a boost to jobless benefits — would be financed by adding to the deficit, though it was “too soon” to put a number on it.
“Things are still in flux. There will need to be almost certainly some level of stimulus in the early days of the next administration given the economic recession we’re in as a result of Trump’s failure to control the virus,” Ms Feldman said.
Sabeel Rahman of Demos Action, a left-leaning political organisation, said there seemed to be a “genuine recognition of the severity of the crisis” within the Biden camp, but its commitment to a progressive agenda would be tested after the election.
The healthcare experts
Vivek Murthy is former surgeon general under Mr Obama and is a member of the transition advisory board.
Rebecca Katz is a professor of global public health at Georgetown University and is also advising Mr Biden on the coronavirus response.
Lisa Fitzpatrick is an infectious disease physician based in Washington DC and director of the US capital’s Medicare programme.
David Kessler was Food and Drug Administration commissioner in the 1990s and has been advising Mr Biden on a plan to combat the coronavirus.
“Where the rubber is really gonna hit the road on a lot of this is going to be around the appointments that they’re going to make [and] the priorities that he sets out in terms of what a recovery package looks like,” Mr Rahman said. Among the top contenders to lead economic agencies under Mr Biden are Sarah Bloom Raskin, the former deputy Treasury secretary, and Lael Brainard, a Fed governor.
Heidi Shierholz, chief economist at the Economic Policy Institute in Washington, said Mr Biden still faced an uphill battle to pass progressive legislation in the face of opposition from Wall Street and business. “Those forces are less strong than they have been but I think they still have a lot of pull,” she said.
The technology experts
Jessica Hertz was a senior member of Mr Biden’s legal team when he was vice-president. She most recently was associate general counsel at Facebook before moving to the transition staff, including work on vetting and personnel.
Larry Strickling was the head of Mr Obama’s National Telecommunications and Information Administration and has been co-ordinating economic policy advice for Mr Biden.
Sarah Miller is the executive director of the American Economic Liberties Project and a proponent of Big Tech break-ups. She is informally advising the Biden campaign.
Cynthia Hogan is a senior lobbyist for Apple and has joined the transition staff in recent months, to focus on legal, vetting and personnel matters.
Mr Biden’s economic plans are already being attacked as too radical and ineffective by the White House and congressional Republicans. “The last thing struggling American businesses need right now is a massive tax hike,” said Chuck Grassley, the Iowa senator.
But William Spriggs, the chief economist at the AFL-CIO, the largest union federation in America, dismissed that criticism. “Trump gave away all the money to the rich, as far as the eyes could see. So it isn’t raising taxes on the wealthy — it’s returning to sanity on what kind of tax level you need to run the United States of America,” he said.
On individual income taxes Mr Biden is proposing a return to the top rates in place during the Obama administration, but his plan goes beyond that, by increasing capital gains and payroll taxes on high-income households. On the corporate side, he wants to increase the income tax rate to 28 per cent, a level proposed by Mr Obama, but also wants to add a minimum tax on profits and a penalty for offshoring.
The climate experts
Cecilia Martinez is an environmental researcher and activist on Mr Biden’s transition advisory board.
Lonnie Stephenson is the head of the International Brotherhood of Electrical Workers Union, and a supporter of Mr Biden’s green energy investment plan.
Carol Browner was the head of climate change policy in Mr Obama’s first term and a former Environmental Protection Agency administrator who is advising Mr Biden.
Tom Steyer is a billionaire investor who sought the Democratic presidential nomination on the basis of his climate change concerns, and is advising Mr Biden’s team.
Last week, Mr Biden’s plan received a boost when Moody’s found that over the next four years, if accompanied by complete Democratic control of Congress, it would lead to faster growth and higher employment, compared with a victory for Mr Trump paired with an entirely Republican legislature.
Some observers say the differences between Mr Biden’s economic plans and those of the party’s previous nominees and administrations are overstated.
“He’s very much in keeping with the kind of pragmatic sensible approach to economic issues that Clinton and Obama engaged in — obviously adjusted to the circumstances of the day,” Robert Rubin, the former Treasury secretary under Mr Clinton, said, adding that Mr Biden’s plan was “fundamentally on the right track” given that America “badly” needs “additional public investment”.
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Among Mr Biden’s economic advisers, Mr Bernstein said there hadn’t been “much of a split” so far, despite their origins in different strands of the Democratic party. “It’s more driven by what the policy agenda is: we need to build a much more resilient inclusive economy on the other side of this crisis,” he added.
And there is clear unity in faulting Mr Trump for being a phoney defender of middle and lower-income households, and out of touch with their struggles. “The president talks all the time about how great the economy is. Well, I don’t know what y’all think, but where I come from and a lot of places in this state, it’s not so great,” Mr Biden said in Wisconsin last week.
Photographs: Bloomberg; Getty Images; AP; Reuters
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