Unfortunately, the first Presidential debate was dominated by bickering and insults and not focused on policy. To help gain clarity on the two candidates’ policies and how they may affect market sectors, I highlight some of the publicized differences in healthcare, technology, energy and financials.
If elected, Biden intends to expand the Affordable Care Act by including more generous subsidies, eliminating the income cap for eligibility for premium tax credits, and capping premiums at 8.5% of income. His plan includes a public option in which those under the federal poverty level would be automatically enrolled, but does not include Medicare for All. He plans to lower the age for Medicare eligibility to 60. Biden’s plan allows Medicare to negotiate drug prices, establishes a review board for pricing of new specialty drugs, penalizes companies for raising drug costs more than the rate of inflation, and supports IPI drug pricing.
The President has focused on drug pricing and has issued executive orders regarding International Pricing Index (IPI) pricing for Medicare and drug re-importation. The IPI model would test whether increasing competition for private-sector vendors to negotiate drug prices, and aligning Medicare payments for drugs with prices that are paid in foreign countries, improves beneficiary access and quality of care while reducing expenditures. He has also targeted surprise medical billing. The President has continuously targeted the Affordable Care Act. The Supreme Court ruling expected in the fall could impact the Administration’s health care policy if Trump were to win re-election. The President has supported converting Medicaid spending to block grants and capping growth rates of spending.
The President has called for revoking Section 230 of the Communications Decency Act of 1996 due to tech platforms’ censorship of conservatives and issued an executive order directing his agencies to investigate practices of platforms like Facebook and Twitter. Section 230 provides immunity to online platforms from civil liability based on third-party content and exempts them from being treated as the publisher or speaker of the information they provide. Additionally, the Trump Administration has launched an antitrust probe against the big tech companies.
Biden has not outright called for breaking up big tech, but expectations are that he would have a tougher stance than the Trump Administration on antitrust and big tech generally. He has called for US privacy standards to be similar to the standards set by the General Data Protection Regulation, adopted by the European Union. He has said that Section 230, which offers tech platforms immunity protections, should be revoked.
Biden has focused on net zero carbon emissions in power generation and support for renewable energy generation, as well as clean energy in areas like electric vehicles. While not calling for an outright ban on fracking, he has criticized the Trump Administration’s deregulation in the energy space and has supported banning fracking on federal lands and offshore, as well as removing tax deductions for oil and gas companies. He has called for the US to rejoin the Paris Climate Agreement.
The President is focused on reducing the cost of energy and is expected to continue favoring a regulatory environment friendly to fracking, pipelines, energy exports, and fossil fuels.
Under the Trump administration the financial sector has benefitted due to de-regulation. If reelected, a push for further deregulation is expected. While the President believes the Consumer Financial Protection Bureau’s lone director is unconstitutionally shielded from accountability, his Department of Justice urged the Supreme Court not to issue a ruling that will halt its “critical work.”
Biden, if elected, is expected to work to overturn new deregulation efforts. He has supported the Consumer Financial Protection Bureau.
Needless to say, the President’s ability to effect change is dependent on which party controls the House and the Senate. We’ll soon see how this all play out. For more information on the policies of the two candidates, please listen to our Economic Outlook Webinar (password is 8jMa3ZZJ): The Elections Are Near-What Should We Be Considering? (be sure to click playback if it does not automatically run)
Washington Trust Bank believes that the information used in this study was obtained from reliable sources, but we do not guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation for business or a recommendation of the purchase or sale of securities or commodities.
Washington Trust Bank.