UCN
Used Car News
usedcarnews
11/23/2020
Industry Prepares for Change at the Top By Jeffrey Bellant
karglobal.com
IN THIS ISSUE:
• HURRICANE RECOVERY • CHARITY
Rush - Dated Material
• RETAIL MARKETS
Former Vice President Joe Biden is expected to be sworn in as the 46th president of the United States, although President Donald J. Trump, at press time, was still contesting through lawsuits the results in several states. It was Biden’s third attempt to win the presidency and this time the election wasn’t called by the media until several days after election night. A Biden adminstration will be facing several challenges, from the ongoing COVID-19 pandemic, to the economic challenges caused by lockdowns and a divided Congress. While Biden’s Democratic Party will still have a majority in the House of Representatives, it unexpectedly lost more than a half-dozen seats this year, with several races still too close to call nearly a week after the election. In the Senate, the Republicans hold a two seat edge, 50-48 with two Georgia Senate runoffs scheduled for Jan. 5. Those races will decide the balance of power in the chamber. If the GOP wins at least one of the seats, it will hold a one-vote majority. If the Democrats win both – making the split 50-50 – they will effectively have control of the chamber since the Vice President breaks ties in the Senate. Good news for Biden was the announcement that a COVID-19 vaccine was on the way. Ironically, the Trump administration’s efforts to speed up the development of a vaccine will likely be a boost for his successor. On other issues, Biden has mapped out a path much different than Trump. Biden has already stated he will repeal the Trump tax cuts while
focusing on healthcare, climate change, infrastructure and immigration, among other issues. Biden has also said he would raise taxes on those earning over $400,000. The reaction from the industry
administration did nothing for small business. But economists with Cox Automotive were more optimistic. Chief Economist Jonathan Smoke said a Biden administration means
Photo By Jeffrey Bellant BIDEN HIS TIME: Then-Vice President Joe Biden tours the 2017 North American International Auto Show in Detroit. Three years later, he is preparing to become the 46th President of the United States.
has been mixed. Longtime dealer Henry Mullinax said he’s only voted Democrat one time in his life – Jimmy Carter. He said the issue then is the issue now. Mullinax does not think Biden has the strong leadership needed for the job and questions whether he will garner the confidence of the entire country. “I’m afraid that the economy will suffer and it will be a tough time,” he said. “The Republicans holding the Senate is the only firewall we have.” Earlier this year, other dealers had praised Trump’s leadership in providing a relief package that included help for small businesses. One dealer said that during the recession in 2009, the Obama-Biden
“reduced friction” in trade. A stimulus package is also expected, though it may have been bigger if Democrats had done better down the ballot. The divided Congress should present one benefit, Smoke said. “Without full support in Congress, the biggest negative of a Biden administration – sweeping tax policy – will be harder to achieve. That’s good for maintaining luxury demand and avoiding anything outlandish with corporate taxes that could complicate depreciation of fleet vehicles.” Cox Senior Economist Charlie Chesbrough added there will be less uncertainty under Biden, especially in trade after Trump pulled out of the Trans-Pacific Partnership.