Kyran Fitzgerald: Biden and Sanders to reshape global business policies, no matter who wins

Amid the Covid-19 crisis, the race to secure the Democratic nomination has put health spending and rolling back tax cuts in the spotlight, writes Kyran Fitzgerald
Kyran Fitzgerald: Biden and Sanders to reshape global business policies, no matter who wins

Amid the Covid-19 crisis, the race to secure the Democratic nomination has put health spending and rolling back tax cuts in the spotlight, writes Kyran Fitzgerald

Democratic presidential candidates Senator Bernie Sanders and former vice president Joe Biden’s campaigns have been overshadowed by the Covid-19 crisis.
Democratic presidential candidates Senator Bernie Sanders and former vice president Joe Biden’s campaigns have been overshadowed by the Covid-19 crisis.

The Covid-19 pandemic is reshaping our lives here in Ireland and in the US, it could well overturn the apple cart of American political and business life.

The country’s strained if not ramshackle public health system is being pushed to its limits.

The centrist candidate Joe Biden has emerged as the front runner for the Democratic nomination for president following the Super Tuesday and other recent primaries.

Should he go all the way, he may end up presiding over a government that veers quite far to the left.

More and more – Mr Biden included – are accepting the case for a rapid increase in public spending with the aim of propping up the healthcare system and ensuring that the financially vulnerable receive greater protection.

This, in turn, is likely to result in higher taxes on the wealth and income of wealthy people and big corporations.

Already centrists in the Democratic party have begun to endorse the idea of a wealth tax.

In something of a turnaround, pro- Donald Trump campaigners are seeking to paint even Mr Biden as a socialist.

We may not end up with Bernie Sanders as president, but many of the ideas he promotes may well be adopted although the left’s ambitious Green New Deal plan may parked for some time on financial grounds.

At the end of a tumultuous week, the Trump administration has owned up to the seriousness of the situation but is far from hinting at possession of a grip on the crisis.

The centrist Democrats led by the Speaker of the House of Representatives, Nancy Pelosi and former Vice President Biden have moved to seize the initiative, with Ms Pelosi working closely with President Trump’s Treasury Secretary Steve Mnuchin on an agreed plan.

A key role is set to be played by the leader of the US Senate Mitch McConnell.

Most people in business would welcome concerted action regardless of cost considerations.

Mr Biden has announced the formation of a new Public Health Advisory Committee with six members including figures from the Obama administration such as Zeke Emanuel, brother of the former Mayor of Chicago and Chief of Staff to the President, Rahm Emanuel.

Also in the group is the former Homeland Security advisor, Lisa Monaco.

Mr Sanders is sticking to his goal of implementation of his “Medicare for All” plan which he says, will cost between $30trn and $40 trn to implement over 10 years.

Mr Biden favours an “Obamacare-plus” approach – building on the achievements of Obamacare - which he says would extend coverage to around 97% of Americans.

He argues that the current public health crisis must take precedence.

“It is not about a debate about Medicare for All. It’s much beyond that right now,” he said.

Last week, Mr Biden announced a plan aimed at combatting the coronavirus pandemic. This includes public health measures such as free public Covid-19 testing, along with emergency paid leave and the creation of state and local emergency funds.

“We need broader measures to shore up economic demand, keeping credit moving to our job creators,” he said.

Mr Sanders has spoken with clarity about the dangers of the current situation where civic minded people who took tests are faced with crippling bills and many are still going to work despite feeling ill.

But Mr Biden’s strength lies in his huge connections across the political system to mayors and officials.

All of this will ultimately have to be paid for – though the US retains a unique capacity given the global strength of the dollar to print money.

While the White House will be tempted to shore up big corporations, Mr Biden has already unveiled a tax plan that would effectively reverse most of the President Trump tax cuts of 2017.

He has promised to raise income tax on the top 1% with the aim of raising $3.2trn over the next 10 years.

Economists disagree as to the amount that could actually be raised.

Experts at the Tax Policy Centre puts the figure at $4trn – but this was before the recent financial crash which has raised the prospect of an income and wealth-destroying recession.

This, in turn, could prompt the federal government to press ahead with a badly needed programme of investment in infrastructure repair across the US.

The administration may well have to pump countless billions into a rescue of businesses on Main Street and a programme of restructuring and even cancellation of personal debt.

The programme of increases in taxes on the wealthy could well turn out to be much more wide-ranging.

A society-wide crisis up to and including war have a way of conjuring up situations which few people can have imagined. Just talk to some of our better historians.

The Biden campaign has been seeking to build its fences with the Sanders campaign in the hope of reducing the numbers of young people staying at home in the November election.

The gathering crisis has brought forward such a prospect.

The warring factions in the Democratic party have a chance to agree on a common programme of action.

The crisis has brought them closer together. There is a realisation that American society could be embarking on a period of profound transformation.

The Democrat rivals would do well to consider this – particularly the purist followers of Mr Sanders.

As former candidate Hillary Clinton used to say: Never waste a crisis. The two men and their backers will not be forgiven by history if they duck this opportunity to craft a programme of deep reform.

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