The Biden Economy Has Ended: 5 Ways His Policies Helped the Middle Class Build Wealth
Written by
Tobi Opeyemi Amure
Edited by
Zuri Anderson
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The Biden administration had introduced policies to strengthen the middle class financially. The changes in taxes, childcare support, infrastructure investment, healthcare, and housing helped a lot to add financial security to millions of Americans.
GOBankingRates break down how these policies helped families save money, build wealth and find more economic stability.
Tax Policy Reforms Increased Household Savings
“I think Biden’s tax policy helped ordinary people breathe better financially. And it was more than simply meeting political pledges; it was also about real economics,” said Andrew Lokenauth, founder of BeFluentInFinance.com.
The expanded Child Tax Credit equal to up to $3,600 a child was much needed, per U.S. Treasury data. This credit was distributed to millions of households and played a leading role in cutting child poverty rate by 46% in 2021, according to an analysis from the Institute on Taxation and Economic Policy.
Biden also maintained tax breaks from the previous administration for middle-class earners making less than $400,000 a year. They dialed up taxes for corporations, changing rules so that the uppermost paid a fair share and helping the middle class breathe. Other tax benefits, like the Earned Income Tax Credit, offered millions of low-income workers cash to cover rent, utilities and food.
Wealth-Building Programs Expanded Asset Ownership
Owning a home and saving for retirement are key ways middle-class families build wealth, and Biden’s policies tackled both areas. The First-Time Homebuyer Tax Credit provided up to $15,000 to help families buy their first home. To address the housing shortage, incentives for new construction led to over a million new homes being built, helping to narrow the supply gap.
For workers, auto-enrollment policies increased participation in 401(k) retirement plans, making it easier for people to save for the future. Meanwhile, expanded broadband access connected millions of rural households to the Internet, opening up opportunities for remote work and online education.
Infrastructure and Manufacturing Revitalized Middle-Class Jobs
Biden’s policy for rebuilding American industries was based on creating good-paying jobs and a strong economy. According to U.S. Department of Transportation (USDOT) reports, the Bipartisan Infrastructure Law put $1.2 trillion toward roads, bridges and public transit, creating over 1.7 million construction and manufacturing jobs.
The CHIPS act was one other key initiative. Through this act, Biden also put in a research and development $52.7 billion into semiconductors to reinvigorate America’s industrial middle class, Lokenauth told GOBankingRates. This effort created tens of thousands of high-paying jobs in states such as Ohio or Arizona.
To encourage domestic production, new “Buy American” rules required federal contracts to use more American-made materials, boosting local industries. Domestic content requirements were increased from 55% to 75% in federal contracts, according to White House procurement guidelines in these provisions.
Healthcare Reforms Reduced Financial Stress
Rising healthcare costs put many families under pressure, but some Biden-led policies reduced it quite a lot. The Affordable Care Act subsidies from the American Rescue Plan offered an average of $2,400 per family in annual insurance premiums.
It came down to one of the most widely felt changes: Lowering insulin prices for Medicare recipients, from $75 under Obama to $35 today. The Inflation Reduction Act also allowed Medicare to negotiate drug prices, a move expected to save seniors billions over the next decade.
The Biden administration resolved the ACA’s “family glitch” through updated IRS regulations. This allowed 1.2 million middle-class households to qualify for subsidized health insurance when employer-sponsored family premiums exceeded income-based affordability standards, per Protect Our Care.
Childcare Investments Boosted Workforce Participation
“The American Rescue Plan’s $39 billion childcare relief represented the largest investment in modern history,” said Lokenauth. This funding kept 225,000 childcare providers open, ensuring millions of parents could continue working during the pandemic recovery, according to White House briefings.
To further ease the financial strain, Dependent Care Tax Credits allowed families to deduct up to $16,000 in care expenses, offsetting the $15,000 average cost of infant daycare.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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