Economic Issues in the 2020 U.S. Presidential Elections:  A Comparison of the positions of Donald Trump and Joe Biden with Respect to the Social Doctrine of the Catholic Church

By Lorenzo L. Perez*

1.     Introduction

Economic issues play a key role in American presidential elections. At the time of this writing (early August), neither presidential candidate has put forward a comprehensive economic program, a fact that makes it harder to assess the merits of their economic policy proposals. This article starts with a short summary of recent economic developments in the United States. Using candidates’ public statements, campaign documents and the records of both parties, the article assesses the candidates’ positions on a number of economic policy issues:  overall economic strategy, macroeconomic policy; infrastructure; environmental policy and regulations; trade policy; immigration; and health care.

In comparing the candidates’ views, the reader is encouraged to keep in mind the four basic principles of the Social Doctrine of the Catholic Church:  the dignity of the human person, the common good, subsidiarity, and solidarity.  A just society can become a reality only when it is based on the dignity of the human person. The person represents the ultimate end of society, and policy proposals should be assessed with this in mind. The principle of the common good stems from the dignity, unity, and equality of all people. The common good indicates the sum total of social conditions which allow people, either as a group or as individuals, to reach their fulfilment more fully and more easily.  The principle of subsidiarity stresses that it is impossible to promote the dignity of the person without showing concern for family, groups, associations, and local territorial realities.

1 For a more thorough discussion of the principles of Catholic Social Doctrine, see the article “Issues that Catholics and Other People of Goodwill should take into account in US presidential elections”, published by the author in El Ignaciano, June 2020 issue.
2 The detailed strategy would include among other things, access to testing for all, establishment of sustainably supply chain for PPE and other supplies, and help for health care workers by fully utilizing the authority under the Defense Production Action act, premium pay for health care workers, and a coordinated global approach to develop, manufacture, and distribute a safe, effective vaccine against the COVID 19 virus.
3 A $400 billion Procurement Investment Program of the federal government over a 4-year period together with the clean energy and infrastructure plan will power demand for American products, materials, and services.
4 The TPP was to be composed of the North American countries, Peru, Chile, Japan, Singapore Vietnam and Australis, among others, and was envisioned as a trading bloc that could stand up to China in trade matters.  After the US withdrew in the final stage of negotiations, the other countries still went ahead and finalized the agreement and gave it the name of Comprehensive and Progressive Trans-Pacific Partnership.
5 In mid-July, President Trump promised in a TV interview that the White House would present a new proposal for a health care system for the US.

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The principle of subsidiarity calls for the protection of people from abuses of higher level of social authority and calls on these same authorities to help individuals and intermediate groups to fulfill their duties. The principle of solidarity emphasizes the intrinsic social nature of the human person, the equality of all in dignity and the rights and the common path of the individual and peoples toward an ever more committed unity. There is a growing interdependence between different groups of people but stark inequalities persist between developed and developing countries and within countries. The acceleration of interdependence needs to be accompanied by equally intense efforts on the ethical/social plane, in order to avoid the dangerous consequences of perpetrating injustices.

2.        Recent economic developments

Before the COVID-19 pandemic triggered the beginning of a lockdown of the economy in March 2020, the U.S. economy was enjoying its longest period of expansion in history. The expansion began in the summer of 2009 after the successful implementation of policies to address the Great Recession of 2008-2009, 7½ years before the beginning of the Trump administration. Unemployment dropped to levels not seen since the late 1960s, real wages were rising, and inflationary pressures remained subdued.

Recent Economic Developments

(percentage change from previous period, unless otherwise indicated)

                                                                                                  2014    2015    2016    2017    2018    2019

Real GDP                                                                               2.4          2.4         1.6         2.3         2.9         2.3

Private Investment rate (% of GDP)                     16.4     16.8      16.3      16.6      17.8     1 8.1

Unemployment rate (in percent)                               6.2        5.3         4.9         4.4         3.9        3.7

CPI inflation rate (q4/q4)                                               0.6         0.4         1.8         2.1         2.2       2.4

Federal Government Balance (% of GDP)          -2.8       -2.4        -3.2       -3.5       -3.8     -4.6

Federal Government Debt (% of GDP)                73.7     72.5       76.4      76.0      77.4    79.2

Source for the Table above: Staff Reports and the Fiscal Monitor Reports of the International Monetary Fund.

As shown in the table above, President Trump's enactment of tax cuts and increases in federal spending boosted aggregate demand and resulted in a rise of the real rate of growth of GDP to 2.9 percent in 2018, above the recent annual rates of growth  The increase in aggregate demand induced higher private investment that also appears to have benefitted from a minor supply-side impact on corporate investment from the measures taken. The boost in growth proved to be short lived, however, and the rate of growth of real GDP dropped in 2019 to 2.3 percent, a rate of growth similar to the rates of growth in the years prior to 2018. 

Despite these positive macroeconomic outcomes through 2019, the benefits from the decade-long expansion have not been shared as widely as they could. Social indicators show a troubling picture. Average life expectancy is falling, income and wealth polarization has increased, poverty (although falling somewhat) remains higher than in other advanced economies, social mobility has steadily eroded, and education and health outcomes are discouraging according, for example, the 2019 country report of the International Monetary Fund.

In 2020, the lack of a national strategy for controlling the spread of the COVID-19 virus and the delayed lockdown of the economy that was finally implemented state by state as the virus spread, has had catastrophic results on the economy despite the largest ever fiscal stimulus injected into the economy. Real GDP growth in the first quarter of 2020 was a negative 5.0 percent compared with a positive 2.1 percent in the last quarter of 2019.  In the second quarter, the economy suffered its sharpest downturn since quarterly statistics started being collected in 1947.  Real GDP shrank by 9.5 % from the first quarter level, a drop that equals an annualized rate of - 32.9 percent. While employment, spending and production improved after reopening picked up in May and the massive federal stimulus reached Americans, a recent surge of infection has tempered the pace of the recovery. An aggressively expansionary monetary policy stance has provided ample liquidity in credit markets and combined with the fiscal stimulus has induced a sharp recovery in the stock market after a crash in March.  However, the expansionary policies have reduced nominal interest rates which has had a negative impact on fixed income savers (particularly on the elderly and the risk-averse).

The growth outcome for the year could be significantly worse than the previous market consensus of -6 to -8 percent if the current picks up on the levels of contagion of the pandemic continues in the foreseeable future. Most experts expect the unemployment rate to remain in double digits at the end of the year. Meanwhile, the cost of the fiscal measures taken so far to maintain aggregate demand in 2020 will increase the federal government debt by at least 15 percent of the 2020 GDP and it will necessarily increase further as a new fiscal stimulus package appears necessary for the second half of the year.  Before 2020, an increase in the federal debt to almost 80 percent of GDP was already considered to be in an unsustainable path. 

3.    Overall Economic Strategy

The overall economic strategy of President Trump is to reduce the size of the government, diminish the tax burden particularly for high income taxpayers and eliminate regulations that, in his opinion, discourage investment and job creation. This philosophy of governance led to a reluctance to have the federal government take the lead in developing a strategy to control the COVID-19 pandemic, with disastrous results.  Trump’s presidential campaign stresses that the Tax Cuts and Jobs Act of December 2017 provided a boost to the creation of jobs. This law made significant changes to the personal income tax rates with significant cuts while doubling the Child Tax Credit and cutting the corporate tax rate from 35 percent to 21 percent. Greater benefits were provided to those in the upper deciles of the income distribution (through increasing the exemptions to the alternative minimum tax and a reduction in the marginal tax rate for higher income households), exacerbating the income polarization in the country. The Trump administration emphasizes that small businesses are important beneficiaries of this tax law, and by continuing to reduce environmental and other types of regulations, it argues that it is facilitating private investment that will create more jobs.

The decline in the unemployment rate has been heralded as one of the great achievements of the Trump Administration.   However, as it was noticed already, the decline in unemployment was well entrenched before the passage of the tax law, and the further declines in the unemployment rate in 2018 and 2019 does not appear to justify the high budgetary cost of the Tax Law at a time when the federal budget was in urgent need of revenues. In addition, the temporary nature of many provisions of the Tax Cuts Law created significant tax policy uncertainty and instability in the tax system. 

As an additional means of promoting jobs, President Trump signed an executive order that expanded federally funded apprenticeship programs and on-the-job training to provide an alternative for those looking to gain in-demand skills but who lack the means to attend four-year universities. The author does not have information on how significant this measure has been. So far, the Trump campaign has not made any specific employment and small businesses proposals for a new term.  However, President Trump does promises that he will continue to reduce regulations as a means of promoting job-creating investments. He is also in favor of reducing payroll taxes to promote job creation but this would weaken further the social security finances and not benefit the unemployed.

Mr. Biden’s economic vision for the country focuses more on protecting the least fortunate while arguing that its policies would produce more wide-ranging benefits for the broader population. One of the themes of the campaign is the rebuilding of the middle class.  To achieve this aim, Mr. Biden is in favor, for example, of increasing the minimum wage to $15 an hour. He also proposes tripling Title I funding to eliminate the funding gap between high- and low-income school districts and investing in community colleges and job training programs to improve student success. Biden argues that this type of investment in working Americans should be supported by an effort to make that the super-wealthy and corporations pay a more representative share of the tax burden. To respect the dignity of work and increase the power of workers, Biden is in favor of strengthening unions and holding executives accountable for the violation of labor laws. His campaign asserts that it will stand up against wage suppression from non-compete clauses and companies’ practices that classify low wage workers as managers in order to avoid paying them overtime.

Addressing the sad reality that the United States has again a double-digit unemployment rate and that millions have lost jobs, hours, health care, and small businesses they started (through no fault of their own), the Biden campaign has put forward a series of policy proposals. These proposals are advanced also as a way to address structural weaknesses and inequalities in the American economy. These proposals include: 

  • The implementation of a detailed strategy to deal with the COVID-19 pandemic, acknowledging that the job crisis cannot be solved until the public health crisis is under control;  
  • A plan to provide further immediate relief to working families, small businesses, and communities (offering state, local, and tribal governments with the aid they need to pay essential workers, extend COVID 19 crisis unemployment, and an aid package for “Main Street” businesses and entrepreneurs);  
  • A proposal to, mobilize American manufacturing that supports an increase of manufacturing in America, to bring home critical supply chains to reduce dependency on foreign suppliers, and to create a modern infrastructure and a clean energy future ;  
  • Steps to ensure that programs for small businesses really reach them;  
  • A proposal for a dramatic accelerated research and development investment of $300 billion over 4 years to create millions of good jobs and assert U.S. global leadership in the most critical and competitive new industries and technologies.  
  • Plans on the educational front to invest in career and technical education for high school students, training programs and community colleges and free tuition for 4-year degrees for families earning less than $125,000.

2The detailed strategy would include among other things, access to testing for all, establishment of sustainably supply chain for PPE and other supplies, and help for health care workers by fully utilizing the authority under the Defense Production Action act, premium pay for health care workers, and a coordinated global approach to develop, manufacture, and distribute a safe, effective vaccine against the COVID 19 virus.
3A $400 billion Procurement Investment Program of the federal government over a 4-year period together with the clean energy and infrastructure plan will power demand for American products, materials, and services.

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4    Macroeconomic Policy

An appropriate macroeconomic framework for the United States going forward will need to continue to take into account the disruptions created by the pandemic, which unfortunately is likely to spill over into 2021. This will create the need for further fiscal stimulus, particularly to address the needs of state and local governments. In these circumstances, the administration which will begin its term in 2021 will need to take stock of the effectiveness of the stimulus measures taken so far and improve the design of new ones. But in addition to the immediate stimulus actions that would need to be taken, it is of paramount importance that a multi-year fiscal policy program is put together to bring the growth of public debt under control and to maintain the credibility of the U.S. economic policy. In the short run, the deficit and the federal debt will need to continue to increase, but policy adjustments will need to be made to lower the fiscal deficit and control the public debt to attain a sustainable position over the medium term. This is demanded by the common good and is owed to future generations.  Not taking measures to reduce the fiscal deficit over the medium term would reduce the international privileged position of the U.S. dollar.  There are four strands of an appropriate macro framework:

  1.   Given the gravity of the problem, policy actions would need to include revenue measures (i.e., tax increases including, for example, reversing some of the tax cuts implemented by the Trump administration; increasing the progressivity of some taxes (e.g., social security contributions); eliminating tax exemptions for high income taxpayers and energy and pollution taxes). Spending measures would need to consider cuts across the board, including the big-ticket items of defense and social security. In the context of the Social Doctrine of the Church, the dignity of the human person and the principle of solidarity would call, however, for the need to support social solidarity programs, particularly in light of the rising inequality in the United States.  
  2. An appropriate macroeconomic framework needs to be vigilant to maintain the health of the financial system, avoiding significant relaxation of prudential regulations adopted after the financial crisis of 2007-2008 which have shown their value in the current crisis. The very expansionary monetary policy of 2020 has maintained equity prices and reduced market volatility. A strategy will need to be devised by the Federal Reserve to unwind gradually this accommodative monetary policy stance. 
  3. Environmental policy initiatives are increasingly becoming more relevant to ameliorate the negative impacts of climate change. The challenge presented by climate change has implications for both tax and spending policies as well as for regulatory issues. A medium-term macro program needs to take environmental issues into account.
  4. A macroeconomic framework also needs to recognize that the U.S. economy is dependent on the global economy and for the global economy to function well, it needs to be able to rely on a more open, more stable, and more transparent, rules-based international trade system. The United States has to play an active role in strengthening the global economy and for this reason, it needs to continue to play a lead role in multilateral institutions.  

 

Presidential candidates find it difficult to present a coherent economic plan during the campaign given that such a plan would need to address numerous issues which are better addressed after the election, and candidates do not want to be pinned down to unpopular measures that would necessarily be required in a serious program. So, voters are unlikely to have the opportunity to evaluate economic programs along the lines proposed in this section.  However, we already know what are likely to be some of the macroeconomic positions of Messrs. Trump and Biden.   President Trump and the Republican party do not give any indications of having strong macroeconomic policy views for a second Trump term. Not much attention has been paid to the dangers presented by the increase in the federal deficit and debt although in the recent stimulus negotiations Republican senators are beginning to raise these issues.

President Trump’s public statements give the impression that the only fiscal measures worth taking are tax cuts, particularly for high-income investors and corporations. His expressed views on the federal debt have been particularly alarming. During the 2016 presidential campaign, he made the unrealistic assertion that he would eliminate (pay off) the federal debt. Later on, he asserted that if the debt could not be eliminated, perhaps it should be repudiated. It took less than 24 hours for his economic advisors to take back this declaration of a president who seems to be advocating a change in the no-default policy that has stood since the beginning of the American republic and has served the US very well.  

Mr. Biden has not addressed directly the fiscal/debt problem, but he has acknowledged that new spending measures would require compensatory measures including revenue measures. It is also worth noting that the Democratic Party, contrary to the allegations of the Republican Party, has proven to be more fiscal responsible than the Republican Party. For example, in 2001, the Clinton administration left the government with a federal surplus in 2001, and the level of the debt was so small that there were concerns that there would not be enough federal debt instruments to carry out monetary policy operations.  This was quite different from the Republican administrations preceding the Clinton years.  The Obama administration ran large fiscal deficits during 2009-2013 (averaging 9.9 percent of GDP) to address the problems of the financial crisis it inherited from the previous administration but brought the deficit down to an average of 3.2 percent of GDP during his second term.   

5.     Infrastructure

There is agreement between the Trump and Biden campaigns about the urgent need to improve the country’s infrastructure. U.S. highways and bridges are in poor condition, millions of Americans lack access to high-speed broadband internet, and school buildings badly need improvements. The World Economic Forum ranks the US 10th in the overall quality of infrastructure.

The Trump Administration has a poor record on infrastructure. Early in the administration, Trump organized “an infrastructure week” with public and private sectors representatives at the White House to discuss new initiatives. No specific plan was presented, and nothing was achieved when it became clear that the President was not proposing new funding for infrastructure and that he expected the private sector to shoulder the investment alone.  In 2019, an agreement between the administration and the Democratic leadership in Congress on a new $2 trillion infrastructure program was announced with much fanfare. But when the Democratic leadership tried to engage the President to discuss the sources of financing for this initiative, the President broke off the discussions. As part of his campaign promises, Mr. Trump is advancing a plan to allocate $50 billion to empower rural America to address the infrastructure needs of their communities. According to the plan, the states would have the freedom to spend the money where is needed most. The campaign literature also refers to transportation projects, broadband deployment projects and water, waste, and electric projects for rural areas without providing many details. 

Mr. Biden’s campaign has presented proposals to invest in the country’s infrastructure to better compete in the global economy and move to net-zero-greenhouse gas emissions. A Biden administration proposes to  invest to jump-start projects such as the repair of highways, roads, and bridges; renewed investment in freight infrastructure that would include inland waterways, freight corridors, freight rail, transfer facilities and ports; the expansion of public transit systems, assistance to state and local governments to support a plan for the widespread adoption of electric cars, and the coordination and investment in the construction of a national electric-vehicle charging network to power them.  Biden also proposes a push for a national and rail network, as well as financial incentives for buildings to retrofit to reduce their carbon footprints.  A Biden administration envisages working with state and local governments to make the nation’s electric grid smarter, more resilient, and ready to meet the challenges of a net-zero-greenhouse-gas-emissions economy.  Campaign documents mention a figure of $1.3 trillion for investment in these projects over a 10-year period.

6.    Environmental Policy and Regulatory Framework    

In these areas, there are sharp differences in the two camps.  

Trump is a strong backer of fossil fuels; he has sought to roll back Obama-era policies aimed at decreasing carbon dioxide emissions and has weakened Obama-era standards for household items such as light-bulbs. He has downplayed the science behind climate change, and in November 2019 began the official process of removing the U.S. from of the Paris Climate Accord which he found too onerous for the United States. President Trump’s approach has been to move aggressively in the following areas: 

  • The removal of environmental regulations that in his opinion hinder investment; 
  • The signing of executive orders to expand offshore oil and gas drilling and open federal lands to oil and gas production; 
  • The approval of federal financing for coal and fossil energy projects; 
  • The support of construction of oil and gas pipelines (including the recently abandoned Keystone XL pipeline due to local opposition); 
  • The rescinding of the President Obama Affordable Clean Energy Rule and substituting in its place another rule that supposedly reduces greenhouse gasses and promotes energy independence. 
  • The changing of the regulations of the National Environmental Policy Act (passed in 1970 under President Nixon) covering how and when authorities must conduct environmental reviews, making it easier to build highways, pipelines, chemical and solar plants and other projects while limiting the possibilities of affected communities to comment on proposed projects. 

President Trump also signed an executive order mandating that two regulations must be eliminated for every regulation created in order to reduce compliance costs. A campaign document claim that the Administration achieved much more than that goal and that it actually eliminated 22 regulations for every new one. These actions are presented as saving the cost of compliance with the regulations that are being eliminated without considering the environmental and economic costs of not maintaining the regulations. In the Trump Administration’s world, there does not seem to be a real problem with the consequences of climate change, and what is implicitly promised for a new term is more of the same push against environmental regulations.

Biden’s vision for America calls for the government to be an active environmental steward of creation and to protect the planet against the negative impact of documented climate change. Biden calls for a net-zero-emissions economy by 2050. A centerpiece of Biden’s program is the pledge to achieve 100 percent clean electricity by 2035. To attain this goal, Biden proposes requiring electric utilities to produce more of their power from carbon-free sources —including wind, solar, nuclear and hydroelectric —and to improve the energy efficiency of their systems or face penalties. This approach is already being implemented in states such as Montana, Iowa, and Texas, but to do this at the federal level would require that Congress approve new legislation. Biden is willing to explore technologies that capture carbon from fossil-fuel plants before it gets to the atmosphere, which makes many green advocates uncomfortable.  He has in mind a carbon tax to make polluters pay.

7.    Trade Policy

Until the late 1980s, there was broad support for free trade from both the Republican and Democratic parties. While most economists continue to support free trade, the parties have shifted against full support for free trade as American workers have faced increased international competition. Nevertheless, there are important differences on trade policy between the two candidates.

President Trump describes his trade policy as promoting “fair and equal trade,” while arguing that other countries have taken advantage of the United States in international trade. He was a strong critic of NAFTA because of the loss of manufacturing jobs in the U.S. After his inauguration in 2017, Trump immediately called for withdrawal from the Trans-Pacific Partnership (TPP), which was in the last stages of negotiations. Trump has claimed that he could strike much better deals on bilateral negotiations where he could use more effectively the American negotiating power and his negotiating skills. He promised to add to some existing 20 free trade agreements that were in place already by negotiating new agreements with Japan, the European Union and other countries. The negotiations with Japan and the European Union have stalled, however, and by withdrawing the U.S. from the TPP, U.S. businesses lost out on important export opportunities. For example, Japan has opened its meat, grain, and processed food markets to foreign exporters, and Canadian producers are taking advantage of this. NAFTA was renegotiated and renamed USMCA with only small changes, reflecting a recognition that industries like the automobile industry interconnect the three countries. Ironically, some of the new provisions regarding labor protection in the USMCA were advocated by Democratic legislators and imitate the ones adopted in the TPP.

The flagship of President Trump trade policy is the trade war with China. In response to aggressive Chinese policies and harmful practices related to technology transfer, intellectual property and innovation, the Trump Administration has placed tariffs on Chinese imports which have resulted in retaliatory actions by China that have hurt U.S. farmers in particular. The trade war has resulted in several rounds of tariff increases, but the U.S. has not appeared to have obtained any significant changes in Chinese practices regarding technology transfer and intellectual property.

4The TPP was to be composed of the North American countries, Peru, Chile, Japan, Singapore Vietnam and Australis, among others, and was envisioned as a trading bloc that could stand up to China in trade matters.  After the US withdrew in the final stage of negotiations, the other countries still went ahead and finalized the agreement and gave it the name of Comprehensive and Progressive Trans-Pacific Partnership.

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In January 2020, a phase one agreement was reached between the U.S. and China. But this is basically a Chinese government procurement agreement aimed at boosting U.S. exports, and it does not alter Chinese behavior regarding the disputed practices. In fact, it reinforces China’s state-driven command economy. The implementation of this agreement is behind schedule with no clear timeline to restart trade negotiations as relations between the countries continue to deteriorate.

The number of anti-dumping and countervailing investigations have increased sharply under the Trump administration.  A 25-percent tariff on steel imports and a 10-percent tariff on aluminum imports were imposed on national security grounds. Regarding the World Trade Organization (WTO), the Trump administration has eviscerated the WTO Dispute Settlement System by opposing the filling of vacancies in its panels. The U.S. was the main architect of this dispute mechanism and has used this system successfully against unfair trade practices by the EU, China, and others.

The trade record of Mr. Biden is mixed regarding his support for free trade. He supported the original NAFTA accord, the Uruguay Round (the last multilateral trade negotiation round) and some free trade agreements while opposing others. He opposes Investor-State Dispute Settlement provisions in bilateral agreements which are important for protecting U.S. investments from discriminatory treatment and uncompensated expropriation. More recently, the Democratic Party has taken a turn toward more self-reliance, and — in reaction to the difficulties in obtaining medical supplies from abroad during the pandemic — to a position more critical of the impact of international trade on domestic industries and on labor. In that sense, the Democrats have moved in the same direction that President Trump has taken the Republican Party, only not to the same extreme. Biden’s “Buy America” call in the already discussed $400 billion procurement program and a $300 billion investment in R&D to innovate in the United States are examples of this shift in the Democratic Party. Biden’s campaign literature calls for a tightening of domestic content rules and for a crackdown on waivers to “Buy American” requirements, but it is not clear how this can be done given the US international obligations under the WTO. One important difference with Trump, however, is that Biden is not proposing retaliatory import tariffs. Given the experience of the Great Depression almost 90 years ago when trade restrictions aggravated the world economic contraction, this is an important distinction.

Efforts to assess Biden’s trade philosophy are hampered by the fact that the campaign has not produced a trade policy position paper. Publicly, Biden has expressed concerns about China’s trade practices and it is to be expected the US would continue to press China on these matters should he be elected. But given Biden’s views on foreign policy and his support of multilateral cooperation, it appears that he would be more supportive than President Trump of a multilateral approach in the trade field and of the Word Trade Organization. 

8.     Immigration

Immigration is a multidimensional issue. It is a humanitarian issue because immigrants frequently leave their countries to avoid violence and/or political repression and extreme poverty.  It is also an international political issue that has an impact on country relations.  And it is an economic issue, because countries can increase their labor force and benefit by accepting immigrants, particularly those with scarce skills and because new arrivals present a challenge to a country’s residents in certain job fields. The United States has many low-skilled immigrants who work in agriculture, construction, gardening, and cleaning sectors where it is difficult to fill all openings with American-born workers. The US has also benefited from the “brain drain” in other countries with thousands of professionals in the health, engineering, and technological sectors emigrating to the United States to work on the frontiers of these professions. 

Opposition to immigration remains one of the flagship policies of the Trump Administration. Since the presidential campaign of 2016, President Trump has carried out a virulent attack against immigrants, particularly from Mexico and from Central American countries. He has accused them of being criminals and that they take away jobs from American citizens. He has started a wall-building program to extend existing walls between the United States and Mexico. The number of Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) agents has been increased, but no effort has been made to increase the number of badly needed immigration court officials to address the backlog of asylum seekers (more than one million cases). The Administration has also implemented a very aggressive and notorious policy of separating children from their parents at the border. President Trump tried to cancel the Deferred Action for Childhood Arrivals (DACA), an action that was blocked by the Supreme Court. The Administration pressured the Mexican government to deploy its own national guard troops to prevent immigration, dismantle human smuggling networks, and accept immigrant camps in Mexico for asylum seekers forced now to wait there until their cases can be heard in U.S. immigration courts. More recently, the Administration tried to expel foreign students who are attending American colleges if the classes are held only on-line in the fall. The Administration backed down from this idea after it was sued by several universities.

Biden’s approach to immigration is very different. His campaign emphasizes that the country has been able to renew itself, to grow stronger as a nation, and to meet new challenges thanks to generations of immigrants who have come to the country with hopes of better lives here. Biden’s campaign has a very detailed policy document which criticizes Trump’s obsession with building a wall that does nothing to address security challenges while costing taxpayers billions of dollars. The document emphasizes that families fleeing violence in Central America are voluntarily presenting themselves to border patrol officials and that the real threats to the country security — drug cartels and human traffickers — can more easily evade enforcement efforts now because the Trump administration has misallocated resources into bullying legitimate asylum seekers.

Mr. Biden supports a fairer and more humane immigration system. The policy document on immigration calls for, among other things: an immediate reversal of the Trump’s administration’s policies separating parents from their children; 

  • the reform or asylum laws so that they do what they should be designed to do —protect people fleeing persecution and who cannot return home safely; 
  • a doubling of the number of immigration judges, court staff, and interpreters to address the backlog of immigrations cases; 
  • a surge of humanitarian resources to the border and a fostering of public-private initiatives with an existing network of organizations such as faith-based shelters; an end to prolonged detention and a reinvestment in a case management program for asylum seekers which is much more cost effective than prolonged detention; 
  • the protection of Dreamers (DACA beneficiaries) and their families and the creation of a road map for their citizenship through legislative immigration reform; 
  • the ensuring that ICE and CBP personnel abide by professional standards and are held accountable for inhumane treatment; 
  • The convening of a regional meeting with leaders of El Salvador, Guatemala, Honduras, Mexico and Canada to address the factors driving migration and to propose a regional resettlement solution. (Biden proposes a four-year aid package of assistance to the region, with aid linked to measurable reductions in gang and gender-based violence, improvements in legal and educational systems, and implementation of anti-corruption measures.)

Biden also envisages a modernization of America’s immigration system and promises to commit political capital to finally deliver legislative immigration reform. Such legislation would create a roadmap to citizenship for the nearly 11 million people who have been living in and strengthening the U.S. for years.  There is also the intent to reform the visa program for temporary workers in selected industries that depend on seasonal workers, or for workers who seek to work in the US for a short time. Biden has expressed support for an expansion of the number of high-skilled visas, the preservation of preferences for diversity in the current visa system and the creation of a new visa category to allow cities and counties to petition for higher levels of immigrants to support their growth.  

9.        Health Care

Affordable and accessible health care is a fundamental human right and an essential safeguard of human life. Health care is a very large sector of the U.S. economy but despite the fact that it spends considerably more in health care in per capita terms than other developed economies, the United States does not compare well in health sector results vis-a-vis these countries. Despite a recent increase in the number of people insured as a result of the Affordable Care Act (also known as Obama Care), millions of Americans still lack health care coverage and health care coverage remains an urgent national priority. Millions have lost their medical insurance this year as they lose their jobs. The weaknesses of the U.S. public health service have been laid bare during the COVID-19 pandemic.

The Republican Party and President Trump, in particular, have been very strong critics of the Affordable Care Act. They have opposed, among other things, the individual mandate for health care, the cost of the health care programs that could be obtained under the Act, and the penalty tax for those who do not buy insurance. The Republicans have made many attempts to abolish the Act both at the federal and at the state level without presenting alternatives. If they succeed, millions would be left without health insurance with no alternative being offered to them. While the Affordable Care Act has survived in the courts, Republicans have abolished the penalty tax for those who did not obtain medical insurance as part of the Tax Cuts and Jobs Act.  The Republicans had the opportunity to present a new health sector law when they held the majority in both congressional houses in 2017-2018 at the beginning of the Trump Administration, but they failed to generate any concrete proposals.  They have adopted two of the popular aspects of the Affordable Care Act: persons cannot be denied insurance because of pre-existing conditions and children can stay on their parent’s medical insurance policies until the age of 26.  On a more positive side, the Trump Administration has declared the opioid crisis a nationwide public health emergency and taken steps to address it; it has increased the approval of generic drugs and reinstated the ban of US aid to organizations that perform abortion.

5In mid-July, President Trump promised in a TV interview that the White House would present a new proposal for a health care system for the US.

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Many in the Democratic party have moved to support universal health care (“Medicare for all”), proposing to scratch “Obamacare” for a government health program. This is not Biden’s stated position, however.  He remains a strong public defender of the Affordable Care Act, and he proposed improving it with some necessary changes. His health position paper calls for giving more choices to consumers, efforts to reduce health care costs, and making the health care sector less complex to navigate. Biden has come out in favor of creating a public health insurance option for those who wanted it within the framework of Obama care.  As in Medicare, prices would be negotiated with providers to lower costs. In an attempt to increase the coverage of low-income citizens, Biden favors making this option available for those where the Medicaid program has not been expanded at the state level due to the opposition of state governments (14 states have not expanded Medicaid as allowed in Obama care). 

Under Biden’s plan, people insured in the marketplace would receive tax credits to cap their premiums at 8.5 percent of their incomes.  A number of proposals to lower the health care spending have been identified: for example, eliminating “surprise billing” when the patient does not have control if the provider is from out of network; using antitrust authority to reduce concentration of power in the health sector that drives up prices; and eliminating the exception that permits drug manufacturer not to have to negotiate drug prices with the government.

10.     Final Comments   

Assessing the positions of presidential candidates is a difficult endeavor because candidates tend to over promise and try to avoid getting pinned down on complicated issues. This article aims, however, to assess the candidates’ positions on key economic issues in the light of the Social Doctrine of the Catholic Church. It could be argued that both candidates’ overall economic strategy aim at improving living standards in the United States, but Mr. Biden’s strategy emphasizes the need to help the disadvantaged more directly, a position more in line with the spirit of solidarity and with efforts to reduce the increasing inequality in the United States. On macroeconomic policy, the better record on fiscal policy of the Democratic Party, Mr. Biden’s recognition of the need to take revenues and expenditure measures, and his environmental policy strengthen his position relative to President Trump’s.  On infrastructure, President Trump has a poor record and no announced plan for a second term, other than some infrastructure initiatives for the rural sector. Mr. Biden has presented an ambitious and detailed infrastructure plan. A large estimate of the cost of the plan is presented, and Mr. Biden will need to identify the financing to implement the proposed investments which may imply higher taxes for most households, not only for the very rich. But the increased taxation has to be compared to the real costs of not doing the necessary infrastructure investment.

The two candidates’ positions on environmental policy and regulatory framework, immigration, and health care could not be more different. President Trump is dismantling the American regulatory framework in line with his belief that decisions of investment are better left to the private sector and that the negative effects of climate change can be ignored. He opposes immigration and wants to revoke the Affordable Care Act. Mr. Biden proposes specific actions to avoid the negative effects of climate change, a position which appears more in line with the defense of the common good, particularly at the intergenerational level. He will need to fight for the necessary legislation, however, to carry out his environmental and regulatory policies. Mr. Biden’s immigration policies are more in line with an open-door policy for immigration and with the principles of solidarity and common good. Lacking a specific health care proposal from President Trump and the poor performance of his administration during the COVID-19 pandemic, Mr. Biden´s proposals have to be viewed more favorably and more in line with the respect of the dignity of the human person.

There is some common ground on the candidates’ trade policies, such as a shared interest in holding China accountable for some of its practices and the desire to rely more on American production in key supply chains. But President Trump’s trade policies have not achieved their announced objectives. Mr. Biden is likely to have a more multilateral approach on trade negotiations and has not announced support for retaliatory tariff increases which could precipitate trade wars. Such an approach could yield better results from his trade policy initiatives and be more in line with the spirit of solidarity.   

It is not the purpose of this article to endorse, support, or recommend one candidate over the other. We have simply taken the economic facts on the ground and the candidates’ proposals and laid them out as clearly as possible so that the discerning voter can make an informed decision. In doing so the Catholic voters may use a criterion of judgment that is different from that of a voter who is not concerned or interested in the Social Justice Doctrine of the Catholic Church. For the voter who is indeed concerned with Social Doctrine of the Church we have added in this final section a few comments to help him/her reach a decision. 

*Lorenzo Perez, Ph.D.

US Treasury, US Agency for International Development and the International Monetary Fund (IMF) in Washington, D.C.
Retired from the IMF in 2009 after working there for more than 30 years and leading IMF missions to countries in South America, the Caribbean and the Middle East.
Adjunct Professor at the George Washington University.
                                                                      

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