The balance of power between Republicans and Democrats in the Senate will shape President‑elect Joe Biden's legislative agenda, determining the extent to which he can push through tax increases and influencing the size and scope of spending associated with any pandemic relief and recovery packages.
If Republicans retain control of the Senate—which would include the Senate's committees and agenda—Biden would need at least one or two GOP senators to achieve his legislative goals.
Biden has signaled his intention to use his administration's regulatory authority to pursue many domestic policy priorities. Investors should not overlook how potential changes related to the environment, health care, and technology could affect some sectors and industries.
Biden supports the passage of "green infrastructure" legislation to help spur the economy's recovery from the coronavirus pandemic. Throughout his campaign, Biden proposed tax credits for electric vehicles, clean manufacturing, renewable power, and energy storage projects as well as spending on electric vehicle charging stations and other infrastructure initiatives.
While a GOP majority in the Senate would limit the scope of Biden's environmental legislation, his administration's efforts to address climate change could come at the regulatory level. This approach would involve implementing more stringent environmental rules than those that President Donald Trump removed or weakened.
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