What President Biden's State of the Union means for business

Background:

The Constitution requires the President to appear periodically in front of a joint session of Congress to deliver the 'State of the Union'.  While there is typically a healthy dose of political theatre involved, it gives the President the opportunity each year to outline their legislative platform as well as to deliver a budget message and an economic report.

This edition marked the first time where a State of the Union address was delivered with two women presiding over Congress – Representative Nancy Pelosi, the Speaker of the House of Representatives and Vice President Kamala Harris, the President of the Senate.

On Ukraine:

Given the context of the Ukraine crisis, the timing of this speech was challenging for President Biden. It was clear that most of the speech was written well before the Russian invasion of Ukraine, and as a result the parts of his speech supporting Ukraine were slightly bifurcated from the campaign speech he intended to give.

President Biden received significant bipartisan applause when he announced that the US would stand with the Ukrainian people. The Ukrainian Ambassador to the US, who was in the room as a guest of the First Lady, also received a standing ovation. He praised the sanctions imposed on Russia as a cooperative effort and also announced a Department of Justice task force to go after US-held assets of Russian Oligarchs.

While President Biden insisted that US troops will not engage Russia on the ground in Ukraine, he made clear the US will fulfil all of its obligations towards NATO.

On the Economy:

President Biden clearly wanted to use the speech to amplify two things: The American Rescue Plan and a bipartisan infrastructure bill.

The American Rescue Plan was Biden’s stimulus plan passed by a Democratic Congress immediately after his inauguration, designed to kickstart the US economy. This bill paid out stimulus checks to Americans below a certain economic threshold, extended unemployment benefits, and offered increased support to small business.

The President also praised the passage of the bipartisan infrastructure package as a huge step to build back America - 4000 projects have already been announced. The President also announced a massive, nation-wide highway reconstruction plan.

However, he also made an aggressive “Buy American” declaration – committing to the programme more forcefully than he did on the campaign trail.  This is something that could be challenging to UK businesses who want a fair and competitive process when it comes to procurement opportunities in the US.

On the Pandemic:

The President suggested that the US has reached a point where COVID-19 will no longer rule the lives of Americans – setting four steps for the country to move forward safely:

• Staying protected with vaccines
• Aggressively preparing for new variants by stockpiling tests and funding research on new vaccines
• Bringing the US federal government back into in-person work
• Committing that the US will seek to vaccinate the world.

Other Issues:

The President reiterated his campaign promise to make corporations and the wealthy pay their fair share of taxes and reaffirmed that no Americans making less than $400,000 per year will see an increase in taxes.

He also took a harder stance on government’s role in stamping out anti-competitiveness, arguing that capitalism without competition is not capitalism but rather exploitation – and given the context of the Russian invasion of Ukraine, there was hardly any mention of other global challenges like China, which is typically the main subject of American foreign policy rhetoric.

For more information, speak to John.