The Biden administration has rolled out new rules over the past week aimed at empowering workers and consumers as the president seeks to address bleak economic conditions ahead of what is expected to be a close election. They have been announced one after another.
Last Tuesday, the Federal Trade Commission (FTC) passed a resolution banning noncompete agreements that prevent employees from working for or starting a competing business after leaving the company.
On the same day, the Labor Department finalized a rule requiring overtime compensation for salaried workers earning less than $59,000 and another rule governing retirement savings advice.
The Department of Transportation also announced on Wednesday two rules requiring airlines to automatically refund passengers for canceled or significantly delayed flights and to share baggage, change and cancellation fees in advance. Announced.
“All of these rules are about the idea that people are entitled to a fair, functioning economy that works for them,” said Rakeen Mahboud, chief economist and managing director of policy and research at the left-wing think tank Groundwork Collaborative. is at the root of this.” and advocacy groups.
Mr. Maboud argued that non-compete agreements and overtime compensation rules give workers “greater power in decision-making about how to participate in the labor market.”
“I absolutely think these rules will have a huge impact on how people feel about the economy and how they feel about their lives and well-being,” she said.
The rulemaking flurry comes six months before the election, as Mr. Biden struggles to counter persistently negative views about the economy during his time in office.
Mr. Biden trails Mr. Trump in the polls by less than 1 percentage point, according to The Hill/Decision Desk Headquarters polling average.
But he has more room to make up for the economy, with 41% of respondents in a recent survey Reuters/Ipsos poll While 34% said the former president had a better approach to the economy, 34% said the same about the current president.
A recent Gallup poll found that Americans’ confidence in the economy, while still largely negative, had improved slightly in recent months, dropping 9 points in the past month.
The decline in consumer confidence comes as inflation has risen slightly in recent months, raising the possibility that the Federal Reserve will keep interest rates at the highest rates in 20 years for an extended period of time.
The central bank raised interest rates throughout 2022 and most of 2023 to try to curb inflation, which reached a 40-year high of 9.1% in June 2022. Since then, the inflation rate has declined significantly, falling to 3.1% as of January.
However, consumer prices rose at an even faster pace in February and March, rising to 3.2% and 3.5%, respectively.
Traders once widely expected the Fed’s first interest rate cut to occur in March as inflation rises modestly, but now expectations are rising for November.
Biden acknowledged that the latest inflation numbers could delay a potential rate cut last month.
“This could cause a delay of about a month,” Biden said in early April. “We don’t know that. We don’t know what the Fed will do specifically.”
The central bank on Wednesday again opted to keep interest rates unchanged at the range of 5.25% to 5.5% since July last year, citing a “lack of further progress” in bringing inflation down to its 2% target.
Douglas Holtz-Eakin, president of the right-wing think tank American Action Forum, was more skeptical about the impact of the Biden administration’s latest policies on voters’ opinions.
“Things like overtime pay get lost in the noise,” Holtz-Eakin said. “There just aren’t enough people focused on this issue for it to be that important.”
He primarily attributes the administration’s recent rapid pace of rulemaking to the Congressional Review Act’s (CRA) retrospective provisions.
The CRA allows Congress to overturn certain agency actions and includes a provision that allows the new Congress to reconsider rules adopted during the last 60 days of the previous session.
“A rough calculation is that anything done after May, during the last 60 days of the legislative period, is subject to the retroactive provision that says the final rule cannot be superseded even if overturned by Congress. eligible,” Holtz-Eakin told The Hill.
“If Republicans were to take control of the House, the Senate and the Presidency, they could look back and create a situation where they could accept anything in the last 60 days, overturn it, and the president could sign it and those rules would go away. “You can imagine,” he said. he added. “I think that explains the pace this spring. They’re pedaling like crazy to get to the end of May.”
Lori Yue, an associate professor of management at Columbia Business School, said rules adopted before the expected 60-day deadline are likely to be more polarizing, appealing to Biden’s base and opposing opponents. He said that there is a high possibility of alienating his supporters.
For example, Yue noted that the FTC’s vote on noncompete agreements was along partisan lines, with three Democratic commissioners supporting the rule and two Republicans opposing it.
Reaction to the rule is similarly divided between experts and supporters. While some, like Mr. Mahboud, praised the move, several business groups led by the U.S. Chamber of Commerce decried regulatory overreach and argued that non-compete agreements are necessary to protect intellectual property. sued the FTC, alleging that
Yue noted that the ban on noncompete agreements has “intensified the conflict with the business community,” but also highlighted the significant groups that stand to benefit from the FTC’s decision.
The agency estimates that approximately 18% of the U.S. workforce, or approximately 30 million people, are currently subject to non-compete agreements.
“This will be a powerful force for Mr. Biden to capture this constituency base,” Yue said.
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