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Joe Biden is projected to be the next president. Here’s what that could mean for taxes, student debt, health care, housing and a stimulus package

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Joe Biden was projected Saturday to become the nation’s next president, according to the Associated Press, after campaigning on an ambitious domestic agenda he hopes will improve voters’ finances and invigorate an economy battered by the coronavirus pandemic.

Tax hikes for the rich, broadened health care coverage and student loan forgiveness were some of the projects on candidate Biden’s to-do list.

Turning though visions into laws, as the president, will be the trick now.

The Democratic challenger unseated President Donald Trump, but the majority party in the Senate is an unanswered question. Both parties have 48 seats now and races in Georgia, North Carolina and Alaska were still undeclared as of Friday morning.

If Republicans maintained control, their opposition could scale down Biden’s plans. A Biden presidency and Republican Senate would confine a second stimulus to around $500 billion, one investor note said.

If Democrats take control, it won’t be by much. It currently takes 60 votes to wrap up debate on a bill and end a filibuster, a move to delay or prevent a vote on a bill, where passage then just requires a simple majority.

So what does that all mean for financially struggling Americans?

Biden will have to pare back his legislative agenda without Democratic majorities in both chambers, said Stephen Myrow, managing partner of Beacon Policy Advisors, an independent policy research firm advising institutional investors. But Biden still has ways to aid families eyeing their budget now through executive action, he added.


‘All these things are incremental steps that add successfully to real change and to remake the economy in a more progressive image.’


— Stephen Myrow, managing partner of Beacon Policy Advisors,

Biden, for example, can try influencing Federal Reserve policy to close income inequality, or he can set a tough antitrust priority to ensure consumers aren’t hit with unfair prices. “All these things are incremental steps that add successfully to real change and to remake the economy in a more progressive image,” Myrow said.

Some Democratic Senators have previously said the president can cancel student debt without congressional action.

Indirectly, a Biden administration and a Republican Senate could actually give a dose of certainty for companies considering more hires in the future. In a divided government, Myrow said they won’t have to worry about facing a new set of tax laws. The stock markets already appear to be noting this prospect.

Biden is sworn in Jan. 20, 2021, less than a month after a range of moratoriums and programs protecting cash-strapped consumers are due to end on Dec. 31, 2020.

Newly reelected Sen. Mitch McConnell, the current majority leader, said Wednesday he would like to strike a deal on a new rescue package before the end of the year after the $2.2 trillion CARES act in March.


The CARES act ‘was the best thing we’ve ever done for low-income families during an economic crisis and it’s not even close.”


— Luke Shaefer, a public policy professor at the University of Michigan and director of the school’s interdisciplinary Poverty Solutions initiative.

The initial stimulus plan was “the best thing we’ve ever done for low-income families during an economic crisis and it’s not even close,” said Luke Shaefer, a public policy professor at the University of Michigan who heads the school’s interdisciplinary Poverty Solutions initiative.

With the U.S. hitting record daily COVID-19 case counts, more public health steps like shutdowns may be necessary, Shaefer said. “It’s quite clear we’re going to need another economic stimulus to help families at this time” to soften the economic consequences of more shutdown orders, but the prospect of divided government makes Shaefer nervous on “what it means for whether we get another meaningful stimulus.”

If 2020 has any lesson, it’s that a lot can change in a little amount of time. So the exact sort of Biden administration actions might be uncertain, but here’s what we know the president-elect has been pledging on the campaign trail.

Taxes

Biden says America’s corporations and its wealthiest citizens need to pay their “fair share” of taxes. Some well-heeled Americans have already been planning for that scenario.

Biden is proposing to raise the income tax rate to 39.6% from 37% for people making over $400,000 annually. That sets the top rate back where it was during the Obama administration.

Biden would also set the corporate income tax rate at 28%, from the current 21%. The rate at the end of the Obama administration was 35%.

Biden hasn’t called for an additional “wealth tax” which was something several Democratic primary rivals to his left advocated during the primaries.

Biden wants to change the tax rules surrounding capital gains and inheritances. People making more than $1 million will have their capital gains taxed at their ordinary income rate, 39.6%, according to his plans.

The 40% estate tax would also apply a lot sooner. The 2017 Tax Cuts and Jobs Act increased the exemption level to estates below $11.4 million for individuals and $22.8 million for couples. The Trump administration law raised the exemption from $5 million and Biden says he wants to bring it back to “historical norms.”

Biden could get some traction on a larger child tax credit. Trump doubled the credit to $2,000 in his tax bill and Biden called for a $4,000 credit. Speaking before the election, Sen. Rob Portman, a Republican from Ohio, said there could be bipartisan agreement on some type of expansion.

Health Care

While the Obama administration passed the Affordable Care Act (ACA), Biden says he wants to build on the program.

Biden would add a public option to the ACA. People below a certain income who live in states that didn’t expand Medicaid would be automatically installed in the public option with no premium, according to the Kaiser Family Foundation. Biden would also lower Medicare eligibility to age 60 from age 65.

He would also overhaul rules and expand eligibility on the tax credits meant to defray health insurance costs. Also on costs, Biden says he’ll prevent people from getting blindsided by massive medical bills.

The president-elect is planning to build on the program, but the Supreme Court is hearing Nov. 10 oral arguments where the Trump administration and Republican-leaning states argue the Affordable


The Biden administration can’t stop a challenge to the ACA in the Supreme Court, but it could, in theory, now argue to uphold the law.

Care Act should be voided altogether because of an individual mandate with a $0 penalty.

The Biden administration could, in theory, turn around and defend the ACA but it cannot make the case go away, according to Allison Hoffman, a University of Pennsylvania Carey Law School professor teaching health law. The Republican-leaning states would still be pressing the case, she noted. The Biden administration would need court permission to file new court papers arguing for the ACA, Hoffman said.

Biden could enact laws potentially fixing the ACA’s alleged defects in the individual mandate and making the case a moot point, Hoffman noted — but that would require law changes which, conceivably, only a Democrat-controlled House and Senate would pass.

Housing

Any Biden housing plans come amid a potential eviction crisis. Approximately 1.3 million renter households will be behind on rent by December, according to the Federal Reserve Bank of Philadelphia. That about 2.8 million adults and 1.1 million children. These tenants will owe $7.2 billion in rent, which averages $5,400, researchers projected.

Ahead of the pandemic, Biden said he would strengthen tenant protections and enact a homeowner and renter bill of rights.

See also:Landlords are still evicting tenants even though there’s a national ban on evictions — how renters can protect themselves

Biden wants to make the financial commitment less daunting for first-time homebuyers with a refundable $15,000 tax credit. Likewise, the president wants to add more housing benefits for people working in the public sector, such as teacher and first responders.

The president-elect has also pushed a tax credit for renters. The credit would reduce housing costs to a maximum 30% of household income for people who do not qualify for Section 8 vouchers offsetting rental costs.

Student loans and college affordability

Even before the pandemic, Americans’ $1.6 trillion in student loan debt was a financial crisis that chipped away at borrowers’ capacity to buy homes, start families or pursue the careers of their choice.

Biden is proposing to cancel $10,000 of a borrower’s student loans; the debt forgiveness would erase loan balances for 30% of borrowers, according to one analysis. Biden would also overhaul a debt forgiveness program that, critics say, has helped too few public sector workers.


The president’s Education Secretary has ‘specific and unrestricted authority’ to modify or cancel federal student loan debt, some attorneys say.

Biden also says families making less than $125,000 shouldn’t have to pay for their child’s education at a public college. This would apply to approximately 80% of families, his campaign has estimated.

Though the plans for free public college would require new laws, Sens. Chuck Schumer and Elizabeth Warren have said the president can cancel debt by himself. Some education law experts say the same. Lawyers at Harvard Law School’s project on Predatory Student Lending have previously said the president’s Secretary of Education has “specific and unrestricted authority to create and to cancel or modify debt owed under federal student loan programs in the Higher Education Act (HEA) itself.”

Jillian Berman, Jacob Passy and Elisabeth Buchwald contributed to this report.



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My ex-wife passed away. I’m the beneficiary on her life insurance. Her family wants me to pay her funeral expenses and won’t leave me alone

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I am 32, and just a month ago I found out that my ex-wife, whom I haven’t spoken to since we divorced, passed away tragically in a moped accident. My ex-wife had life insurance through her job. My ex-mother-in-law informed my father that my ex-wife had kept me as her beneficiary on her life-insurance policy, and her family wants the money for funeral costs, bills, etc.

Not only did my ex-wife have me on her policy as the primary (and only) beneficiary, she updated my home address on the policy after we divorced. Also, I found out through the insurance company that my ex-wife had two term life-insurance policies, one for me and one for my ex-sister-in-law.

I blocked my ex-in-laws, and now I received a threatening voicemail from a blocked number, so I’ve taken it upon myself to notify the authorities. I live in New York, I am remarried, and my divorce was very simple and easy. We left the marriage with what we came into it with. The life-insurance company approved the check in my name, and is sending it to my home.

Am I legally in the clear? I have not spoken to or bothered these people once since we divorced five years ago. I just want to be left alone and move on with my life.

Thank you very much in advance.

Best regards,

Fed-Up Ex-Husband

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Dear Fed Up,

First, I’ll deal with your life insurance concerns, and then the subject of your ex-wife’s funeral expenses.

The life-insurance policy was between your ex-wife and her insurer. It’s possible to overturn a life-insurance policy if it explicitly goes against the terms of a divorce decree, as happened in this case, but that too was a complicated lawsuit. Some states do have statutes that can revoke such beneficiary arrangements.

In “Kaye Melin and Metropolitan Life Insurance,” the children of the deceased were awarded the proceeds from the life-insurance policy, not the ex-wife who was named as beneficiary on the agreement. In that case, the law presumed that what her ex-husband wanted after their divorce was incorrect.

The ruling stated: “Thus, if a person designates a spouse as a life insurance beneficiary and later gets divorced, Minnesota law provides that the beneficiary designation is automatically revoked. At least twenty-eight other states have enacted similar revocation-upon-divorce statutes.”


‘I’m reluctant to say that you are ‘in the clear,’ given previous court rulings, and statutes in some states on the revocation of named beneficiaries post-divorce.’

I’m reluctant to say that you are “in the clear,” given previous court rulings, and statutes in some states on the revocation of named beneficiaries post-divorce. In your case, it seems clearer that your ex-wife wanted you to be the beneficiary. She did, as you say, update your address. It would be hard to see a more explicit sign of her intentions than that.

“Unless the policyholder of the life-insurance plan changes the beneficiary designation officially, the people originally named will remain the beneficiaries through the life of the policy,” according to Heban, Murphree and Lewandowski, a law firm in Toledo, Ohio. “Even if the policyholder was not on speaking terms with the individual upon his or her death, that beneficiary would still receive the income.”

“In the case of someone who divorced and remarried, the policy may name the first spouse as beneficiary. If the policyholder never changed the policy to reflect the divorce and remarriage, the ex-spouse could end up with the benefit. This can cause the current spouse and any children from the second marriage to dispute the beneficiary designation on the policy,” it adds.

But much, I suspect, would depend on what state you live in, and the specifics of your case.

On a separate issue, it’s difficult to glean from your letter whether your in-laws had little funds to pay for the funeral expenses, or were mad as hell that you were listed as beneficiary and felt you should contribute, or both. On the one hand, it seems like they are not in a state of mind to be reasonable and, chances are, if you did engage it would lead to further demands and acrimony.

Perhaps you could talk to your ex-wife’s lawyer and see if there is enough money to cover the costs of her funeral and, if not, you could make a contribution. But given the alleged harassing phone calls, their anger and grief, and their antipathy toward you, you would need to have all correspondence go through the attorney and refrain from any direct communication.

There is no excuse for their taking their grief out on you. Still, spare a thought for her family. If you are fed up, imagine how they feel.

The Moneyist: My boyfriend talked me into depositing my paychecks into his bank account, and paying for a car in his name. What can I do?

Hello there, MarketWatchers. Check out the Moneyist private Facebook
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 group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.





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These money and investing tips can help you when inflation is burning a hole in your wallet

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Don’t miss these top money and investing features:

These money and investing stories, popular with MarketWatch readers over the past week, focus on helping you make sense of the recent spike in U.S. inflation. Understand how rising prices can affect your investment portfolio, and taking appropriate steps now to respond, can prevent unpleasant surprises later.



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No, you’re not crazy. Yes, CDC mask guidelines are confusing — should you stop wearing a mask in public or not?

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Wear a mask. Don’t wear a mask. Make one. Buy one. Wear it outdoors. Wear it indoors.

Confused? You’re not alone.

So what’s the deal with the CDC’s new guidance? “Anyone who is fully vaccinated can participate in indoor and outdoor activities, large or small, without wearing a mask or physical distancing,” Dr. Rochelle Walensky, the director of the U.S. Centers for Disease Control and Prevention, said on Thursday. “If you are fully vaccinated, you can start doing the things that you had stopped doing because of the pandemic.”

Vaccines have helped to slow the spread of the coronavirus, and this appears to be a natural next step for Americans tired of masking up. “We have all longed for this moment when we can get back to some sense of normalcy,” Walensky said.

We are still far, far away from normal. You can take off your mask “except where required by federal, state, local, tribal, or territorial laws, rules and regulations, including local business and workplace guidance,” the CDC says. You still need a mask on buses and trains, in museums and most stores, possibly at your place of work, but not inside restaurants, except when you’re going to the rest room.

How do you know a maskless person is vaccinated? It’s an honors system. The CDC guidance gives less reason for people to abide by that old American Express slogan: “Don’t leave home without it.” People are leaving home without their masks, even in states that still require everyone — vaccinated or not — to wear them in outdoor public spaces, including on the streets of New York.

Many people are fed up, it seems. Little wonder: The CDC’s announcement took many health professionals by surprise: According to a New York Times survey, 29% of epidemiologists surveyed thought people would be wearing masks in public spaces for at least aanother year, while 26% said they believed people would do so for another year, and 26% said they thought mask wearing would continue in some form from now on.


‘You still need a mask on buses and trains, in museums and most stores, possibly at your place of work, but not inside restaurants, except when you’re going to the rest room.’

The change in CDC mask guidelines comes just over a year since the CDC said everyone should wear masks. In April 2020, the Trump administration and the CDC reversed their policies on face masks, and said all Americans should wear cloth face coverings and not — as officials previously said — just medical workers. Trump cited “recent studies,” while the CDC cited “new evidence.”

Fast-forward to Thursday. “I think it’s a great milestone, a great day. It’s been made possible by the extraordinary success we’ve had in vaccinating so many Americans so quickly,” a maskless President Joe Biden declared in the White House Rose Garden declared, citing the vaccines from Johnson & Johnson
JNJ,
+0.15%

Pfizer-BioNTech
PFE,
-0.20%

and Moderna
MRNA,
+7.68%
.

“It’s going to take a little more time for everyone who wants to get vaccinated to get their shots. So all of us, let’s be patient with one another,” the president said.

Forgive the public for having mask rules fatigue. We’ve been on quite a journey. Studies earlier in the pandemic suggested that adopting the practice of mask wearing, one that was already accepted in many Asian cultures, would have saved tens of thousands of lives. Many Americans were understandably frustrated, but also eager to do anything they could to stop the virus.

‘So what’s the deal with the CDC’s new guidance?’


MarketWatch illustration

Flashback: Dr. Nancy Messonnier, director of the Center for the National Center for Immunization and Respiratory Diseases, said in a briefing on Jan. 30 last year, “The virus is not spreading in the general community. We don’t routinely recommend the use of face masks by the public to prevent respiratory illness. And we certainly are not recommending that at this time for this new virus.”

Three months later, New York Gov. Andrew Cuomo, a Democrat, ordered all New Yorkers to cover their faces in public when they can’t maintain a proper social distance. “You’re walking down the street alone? Great! You’re now at an intersection and there are people at the intersection, and you’re going to be in proximity to other people? Put the mask on.”


‘These are just guidelines from the CDC. It’s up to the states to decide what to do next. New Jersey and New York still maintain their mask guidelines in public spaces.’

The CDC’s latest mask announcement are just guidelines. It’s up to the states to decide what to do next. And that’s a whole other story. New Jersey and New York still maintain their mask guidelines when in public spaces. Gov. Phil Murphy, a Democrat, is examining the guidelines, a spokeswoman for his office said in a statement. Murphy, like many governors, wears a mask in his Twitter profile. Perhaps that tells us all we need to know.

Roughly half of U.S. states have some mask mandate. Alabama, Louisiana, South Carolina, Florida, Mississippi, Nebraska, and Texas, among others, had already removed their statewide mask mandates in public spaces and/or had not instituted one. Florida Gov. Ron DeSantis, a Republican, said Thursday he would grant clemency to gym owners who broke the mask mandate.

Texas Gov. Greg Abbott, a Republican, officially ended his state’s face-mask mandate in March, and allowed businesses to reopen, despite opposition from rival lawmakers and health professionals at the time. Gilberto Hinojosa, chairman of the Texas Democratic Party, described the move as “extraordinarily dangerous” and said it “will kill Texans.”

Cuomo, meanwhile, perhaps still reeling from this time last year when New York was the epicenter of the pandemic in the U.S., was definitive in maintaining current policy. Keep your masks on. “In New York, we have always relied on the facts and the science to guide us throughout the worst of this pandemic and in our successful reopening,” he said in a statement.


‘People take off their masks to make phone calls on the street in states where there is a mandate to wear them in public places, and they take them off while they are sitting outdoors eating.’

Vermont Gov. Phil Scott, a Republican, said his state will follow the CDC guidelines. “Later today, we’ll be updating Vermont’s mask mandate following the CDC’s updated guidance, announced yesterday,” he tweeted Friday. “This will mean those who are fully vaccinated no longer need to wear masks — indoors or outdoors — nor do they need to be concerned with physical distancing.”

In Nevada, Gov. Steve Sisolak, a Democrat, said the state updated its own policies on mask wearing to follow the CDC’s guidelines with immediate effect. Nevada Health Response added: “COVID-19 is still very much a threat in our State and many Nevadans may choose to continue using masks based on their and their families’ personal health concerns. Others should respect this choice.”

That statement, perhaps more than any other, illustrates the tension, fear and frustration not only with state laws and changing guidance, but with each other. People take off their masks to make phone calls on the street in states where there is a mandate to wear them in public places, and they take them off while they are sitting outdoors eating. Most people are doing the best they can.

In California, Gov. Gavin Newsom, a Democrat, said people should still wear masks in public spaces for now, but likely not after June 15 when the state fully reopens. “Only in those massively large settings where people around the world, not just around the country, are convening and where people are mixing in real dense spaces,” Newsom told KTTV.

“Otherwise we’ll make guidance, recommendations, but no mandates and no restrictions in businesses large and small.” Is that all crystal clear? I’ll leave that for you to decide.





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