HOUSTON (ICIS)--The results of two US Senate run-off elections in Georgia in January will likely determine how much of president-elect Joe Biden’s agenda his administration will be able to accomplish, an economist said on Friday.
“The US Senate will drive a lot of what president-elect Joe Biden and his administration can actually accomplish in practice,” said Saad Rahim, chief economist at Trafigura, at the Reuters Downstream Leadership Forum.
The structure of the US government requires the Congress – comprised of the House of Representatives and the Senate – and the president to work together on enacting legislation.
“The US president can propose many things, but it is Congress that has the power of the purse and the ability to disburse the funds that would allow some of these actions to take place,” Rahim said.
The US Senate has 100 members, 50 of which are Republicans, the same political party of President Donald Trump. There are 46 Senators who are members of the Democratic Party, and two independent Senators who have typically aligned with the Democrats.
The Biden administration needs to win both the run-offs to secure a 50-50 split in the Senate. This is important because ties are broken by the sitting vice president, which would be Kamala Harris.
Should the Democrats prevail in Georgia in the run-offs on 5 January, Rahim said that would lead to a higher chance of success for key Biden administration goals including a larger stimulus package for Americans struggling for economic survival amid the coronavirus pandemic.
Other Biden policies that would have a higher likelihood of success include healthcare reform, improving infrastructure, focusing on climate change and the political relationship and economic competition with China.
Should the Democrats not win both Georgia contests, a Republican-controlled Senate would likely make passing Biden administration proposals more difficult.
But in that case, Rahim said, Biden would still have presidential power through executive orders, which could be used to push through administration goals such as rejoining the Paris Climate Accords, re-entering or renegotiating the Iran nuclear agreement and appointments to the Environmental Protection Agency (EPA).
Rahim said President Trump rolled back many different regulations and policies that Biden said he would reinstate.
Rahim also talked about international trade, specifically with China, which the Trump administration targeted with tariffs to lessen the trade deficit.
Rahim said he sees the Biden administration moving away from trade wars to focus instead on what could be a multi-decade competition with China.
The US was traditionally crude oil importer, which contributed to the trade deficit. But the crude exports from the US have grown, hitting a peak of 3.5m to 4m bbl/day prior to the pandemic.
Even amid the current trade war, Rahim pointed out that petchem exports to China have been steadily rising. Ethane exports, for example, have seen a significant jump, doubling in 2019 from 2015 levels.
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