Accounting
Biden defends economic record, says Trump plans threaten growth
President Joe Biden warned that Republican Donald Trump’s plans to extend tax cuts and reshape global trade through tariffs risked reversing economic gains, even as dissatisfaction with his own handling of the economy contributed to last month’s stinging electoral loss.
Biden, speaking at an event Tuesday at the Brookings Institution, sought to reverse perceptions of his economic performance, arguing his policies had worked to help Americans recover from the shocks of the COVID-19 pandemic.
“Most economists agree the new administration is going to inherit a fairly strong economy, at least at the moment,” Biden said in an address at the think-tank in Washington. “It is my profound hope that the new administration will preserve and build on this progress.”
That’s unlikely, after Trump vowed dramatic change to economic policy on the campaign trail, helping propel his return to the White House and Republican control of both chambers of Congress. The defeat of Vice President Kamala Harris, who entered the race with just months before Election Day after Biden stepped aside, underscored dissatisfaction with his post-pandemic tenure among the electorate.
Still, the president argued that his policies have planted the seeds that will grow the economy in a way that bolsters working and middle-class families and warned that those gains could be imperiled if Trump enacts tax cuts for the wealthy, cuts entitlement program spending, rolls back investments in infrastructure and levies fresh tariffs. He also warned that a retreat from free trade policies threatened to allow adversaries to take a greater role shaping the world.
“I believe this approach is a major mistake,” Biden said.
“If we do not lead the world, who does?,” he added.
Biden jabbed at Trump over many of the Republican’s first-term policies, saying that tax cuts he implemented had benefited the wealthy and seeking to draw a contrast with his own agenda, touting measures to help expand access to health insurance and a push to expand the child tax credit.
“The previous administration, quite frankly, had no plan, real plan, to get us through one of the toughest periods in our nation’s history,” Biden said, referring to the COVID-19 pandemic.
Focus on legacy
Tuesday’s event had the tone of a valedictory address, as Biden spoke to a largely friendly audience of economists, consumer advocates and business and labor leaders. But Biden acknowledged that outside the room, many remained wary of his handling of the economy.
“I know it’s been hard for many Americans to see, and I understand it,” Biden said.
Biden cited 16 million new jobs, the lowest average unemployment rate of any administration in the last 50 years, 20 million applications for new business and a stock market “at record highs” to defend his economic playbook.
“401(k)s are up, more than a trillion dollars in private sector investment in clean energy and advanced manufacturing in just two years alone. After decades of sending jobs overseas for the cheapest labor possible, companies are coming back to America, investing and building here and creating jobs here in America,” Biden said.
And he said that inflation — which fueled much of the public angst over his economic agenda — was “coming down faster than almost anywhere in the world.”
But also evident was a sense of frustration from Biden that his record had not been celebrated. At one point, Biden noted that Trump as president had sent out stimulus checks during the pandemic with his signature on them.
“I also learned something from Donald Trump. He signed checks for people,” Biden said. “And I didn’t.”
Trump plans
Trump has vowed to undo many of the hallmark policies of Biden’s tenure, including elements of the Inflation Reduction Act, a sweeping tax and climate package, and the Chips and Science Act, which provides billions in incentives to bolster domestic chip manufacturing and reduce U.S. reliance on Asia.
Most notably, Trump has said he would scrap an electric vehicle tax credit, part of a Biden push to transition the U.S. to cleaner energy that fueled anxiety among blue-collar workers worried about its impact on jobs.
Trump has also derided the Chips Act subsidies as a bad deal that is costing the U.S. billions. Republican lawmakers, who will control both the House and Senate, may look to claw back funding from laws Biden signed.
Biden said the investments his administration backed had helped both Republican and Democratic states and predicted that GOP lawmakers would buck at efforts to undo projects in their communities.
Messaging challenge
Tuesday’s speech highlights how Biden, and Harris after she replaced him atop the Democratic ticket, struggled to translate positive economic data into support at the polls.
During his own campaign, Biden briefly embraced the term “Bidenomics” — coined by his critics to disparage his approach — and crisscrossed the country to highlight domestic manufacturing, clean energy and infrastructure investments from legislation he signed, arguing that they were bringing high-paying jobs. But those efforts failed to reverse the negative perceptions of his handling of the economy.
Harris in her campaign struggled to distance herself from Biden even as she sought to assure voters that she would be more attuned to helping middle- and working-class families deal with high costs.
The House unanimously passed four bipartisan bills Tuesday concerning taxes and the Internal Revenue Service that were all
- H.R. 1152, the Electronic Filing and Payment Fairness Act, sponsored by Rep. Darin LaHood, R-Illinois, Suzan Delbene, D-Washington, Randy Feenstra, R-Iowa, Brad Schneider, D-Illinois, Brian Fitzpatrick, R-Pennsylvania and Jimmy Panetta, D-California. The bill would apply the “mailbox rule” to electronically submitted tax returns and payments to allow the IRS to record payments and documents submitted to the IRS electronically on the day the payments or documents are submitted instead of when they are received or reviewed at a later date. The AICPA believes this would offer clarity and simplification to the payment and document submission process while protecting taxpayers from undue penalties.
- H.R. 998, the Internal Revenue Service Math and Taxpayer Help Act, sponsored by Rep. Randy Feenstra, R-Iowa, and Brad Schneider, D-Illinois, which would require notices describing a mathematical or clerical error to be made in plain language, and require the Treasury to provide additional procedures for requesting an abatement of a math or clerical error adjustment, including by telephone or in person, among other provisions.
- H.R. 517, the Filing Relief for Natural Disasters Act, sponsored by Rep. David Kustoff, R-Tennessee, and Judy Chu, D-California. The process of receiving tax relief from the IRS following a natural disaster typically must follow a federal disaster declaration, which can often come weeks after a state disaster declaration. The bill would provide the IRS with authority to grant tax relief once the governor of a state declares either a disaster or a state of emergency and expand the mandatory federal filing extension under Section 7508(d) of the Tax Code from 60 days to 120 days, providing taxpayers with more time to file tax returns after a disaster.
- H.R. 1491, the Disaster related Extension of Deadlines Act, sponsored by Rep. Gregory Murphy, R-North Carolina, and Jimmy Panetta, D-California, would extend the amount of time disaster victims would have to file for a tax refund or credit (i.e., the lookback period) by the amount of time afforded pursuant to a disaster relief postponement period for taxpayers affected by major disasters. This legislative solution would place taxpayers on equal footing as taxpayers not impacted by major disasters and would afford greater clarity and certainty to taxpayers and tax practitioners regarding this lookback period.
“The AICPA has long supported these proposals and will continue to work to advance comprehensive legislation that enhances IRS operations and improves the taxpayer experience,” said Melanie Lauridsen, vice president of tax policy and advocacy for the AICPA, in a statement Tuesday. “We are pleased to work closely with each of these Representatives on common-sense reforms that will benefit taxpayers, tax practitioners and tax administration and we’re encouraged by their passage in the House. We look forward to continuing to work with Congress to improve the taxpayer experience.”
The bills were also included in a recent Senate
The House also passed two other tax-related bills Tuesday that weren’t endorsed in the recent AICPA letter.
- H.R. 1155, Recovery of Stolen Checks Act, sponsored by Rep. Nicole Malliotakis, R-New York, would require the IRS to create a process for taxpayers to request a replacement via direct deposit for a stolen paper check. If a check is determined to be stolen or lost, and not cashed, a taxpayer will receive a replacement check once the original check is cancelled, but many taxpayers are having their replacement checks stolen as well. Taxpayers who have a check stolen are then unable to request that the replacement check be sent via direct deposit. The bill would require the Treasury to establish processes and procedures under which taxpayers, who are otherwise eligible to receive an amount by paper check in replacement of a lost or stolen paper check, may elect to receive such amount by direct deposit.
- H.R. 997, National Taxpayer Advocate Enhancement Act, sponsored by Rep. Randy Feenstra, R-Iowa, would prevent IRS interference with National Taxpayer Advocate personnel by granting the NTA responsibility for its attorneys. In advocating for taxpayer rights, the National Taxpayer Advocate often requires independent legal advice. But currently, the staff members hired by the National Taxpayer Advocate are accountable to internal IRS counsel, not the Taxpayer Advocate, creating a potential conflict of interest to the detriment of taxpayers. The bill would authorize the National Taxpayer Advocate to hire attorneys who report directly to her, helping establish independence from the IRS.
House Ways and Means Committee Chairman Jason Smith, R-Missouri, applauded the bipartisan House passage of the various bills, which had been unanimously passed by the committee.
“President Trump was elected on the promise of finally making the government work better for working people,” Smith said in a statement Tuesday. “This bipartisan legislation helps fulfill that mandate and makes improvements to tax administration that will make it easier for the American people to file their taxes. Those who are rebuilding after a natural disaster particularly need help filing taxes, which is why this set of bills lightens the load for taxpayers in communities struck by a hurricane, tornado or some other disaster. With Tax Day just a few days away, we must look for common-sense, bipartisan ways to make filing taxes less of a hassle.”
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