But some Federal Reserve officials were more circumspect, suggesting on Thursday that government spending might be muted by political reality.
“I don’t think it’s a blank check for the Democrats, but they will be able to do more than they would have otherwise,” James Bullard, the president of the Federal Reserve Bank of St. Louis, said during a webcast event. “When parties get control of all three branches,” he said, then “they start to fight within the party in ways that you might not expect.”
Mr. Biden will almost certainly struggle to win approval for his full climate change agenda, which includes $2 trillion in spending on green initiatives and the elimination of greenhouse gas pollution by 2050. But he is still expected to use early legislation to push hundreds of billions of dollars in renewable energy spending as part of stimulus and infrastructure measures, potentially including efforts to promote high-speed rail and the construction of 500,000 electric vehicle charging stations and 1.5 million new energy-efficient homes.
Health policy could also prove challenging. Mr. Biden repeatedly campaigned on strengthening the Affordable Care Act, and even a slim congressional majority should make parts of that goal possible. There is strong support among Democrats for increasing subsidies in the health insurance marketplaces and interest in expanding coverage to more low-income Americans in the states that have not expanded Medicaid.
Larger structural change, however, will still face significant obstacles. Mr. Biden supports allowing all Americans the choice to enroll in a government-run insurance plan, a policy known as the public option. That policy split the Democratic caucus when it was debated in 2010, and may not be feasible to pass using the reconciliation process. His proposal to lower the age of Medicare eligibility to 60 may also divide Democrats politically.
But some health issues could prove unifying, Mr. Wyden, whose committee oversees Medicare and Medicaid spending, said Thursday. Democrats were likely to move quickly to spend more on vaccine deployment, as the nation watches the pandemic flare up anew.
Reporting was contributed by Coral Davenport, Sarah Kliff, Jonathan Martin, Margot Sanger-Katz, Noam Scheiber and Jeanna Smialek.