By Gerald F. Seib
Presidential campaigns are mostly about defining differences
between candidates, but they can be even more interesting when they
reveal a search for a middle ground, or an emerging national
So it is with the economic policy of presumptive Democratic
nominee Joe Biden, which he is fleshing out step by step during
these hot weeks of the coronavirus summer. He is being pushed to
the left by his own party, but is trying hard not to be pushed too
far. He is taking bits from former presidents Bill Clinton and
Barack Obama -- and yes, from current President Donald Trump as
As is his wont, Mr. Biden is trying to identify a new center on
taxes, and adapt to what may be emerging as a new national
consensus on trade. He has been forced to move away from where he
once was, but not as far away as some in his own party would like
him to be.
"I've kind of tried to shed the labels and focus on the nuts and
bolts of this," Mr. Biden said in a conversation with a few
journalists Monday. Last week, he laid out the first big
installment of his economic plans, a "buy American" proposal to use
$700 billion in government buying power to purchase U.S. goods and
give research and development help to manufacturers -- an
initiative with some distinctly Trumpian "America first"
Coming soon are more traditionally Democratic plans to help
workers with child and family care, and address racial inequalities
in the economy -- as well as a big proposal to improve the nation's
Mr. Biden argues that America has arrived, in this summer of
discontent, at a place where big government investments are needed
to keep up with disruptions in technologies, supply chains and the
"I think we're at a different place in history here," he said.
"This whole notion of a fourth industrial revolution is real....
Unless we adjust how we deal with it we're going to be left
He is proposing new taxes to pay for much, though not yet all,
of this. On corporate taxes, he calls for a 28% rate -- precisely
halfway between the rate before Mr. Trump, when it stood at 35%,
and where it stands now, 21%. He proposes raising the top personal
tax rate to 39.6%, the rate under Mr. Clinton, but nowhere near the
higher top rate some progressives in his party favor.
And Mr. Biden moves further toward those progressives on other
details: He would raise capital-gains taxes, deploy a broader
corporate tax base, eliminate some tax deductions for wealthier
Americans and impose a new Social Security tax that would kick in
at high income levels.
Perhaps more interesting, Mr. Biden appears to be reflecting a
new center ground on trade and economic nationalism.
Back in his 2016 presidential campaign, Mr. Trump both
identified and solidified a changed national mood on trade, one
that reflected the breakdown of what had been a bipartisan
consensus in favor of free trade.
As president he pulled the plug on the North American Free Trade
Agreement before negotiating a new version. He also ditched the
Trans-Pacific Partnership, a trans-Asia free-trade deal, and
declared that the U.S. made a mistake by allowing China to join the
World Trade Organization and granting it permanent normal trade
Though he did oppose some free-trade proposals in the Senate,
Mr. Biden voted for the big ones: Nafta and for permanent normal
trade relations with China. And, as vice president under Mr. Obama,
he supported the TPP. In short, he largely reflected what had been
the bipartisan consensus on trade.
But now the center has shifted, and Mr. Biden has moved with it.
He has said that, as president, he would renegotiate the TPP rather
than simply reinstate it.
He also would use federal buying power and the tax code to
encourage companies to move their supply chains back to the U.S.
That proposal smacks of a new consensus, born of the coronavirus
crisis, that America has become too dependent on China for critical
goods and supplies. More broadly, the Biden initiative also
reflects a new bipartisan, cross-ideological feeling about boosting
Conservatives long recoiled at any hint of an "industrial
policy," arguing that providing help to specific industries meant
harmful interference with free markets. Now, a new wave of young
conservative thinkers explicitly argue for helping American
For his part, Mr. Biden argues the time is ripe for a new
public-private economic partnership. "Even the folks who aren't
crazy about me on Wall Street are looking and saying, 'You know, if
we actually make these kind of investments in infrastructure and in
the future of the American economy, it can benefit everybody.' I
think there's a real shot. I honest to God do."
Write to Gerald F. Seib at firstname.lastname@example.org
(END) Dow Jones Newswires
July 13, 2020 17:31 ET (21:31 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.