President Biden delivered an impassioned State of the Union address last night, touting economic growth under his administration and promising tax credits to aid first-time homebuyers.
BTIG Director of Policy Research Isaac Boltansky shares his perspective on Biden's policy proposals hinted at in his speech and whether they are feasible, particularly on the housing front.
"We're going to see hopefully, I think, passage of a very narrow tax bill. But none of the proposals that the president went through last night on the tax side are going to become law," Boltansky tells Yahoo Finance. "I think we also have to look at these through a political lens. Yes, they may be popular conceptually, but this country is suffering from a housing shortage."
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
[AUDIO LOGO]
BRAD SMITH: President Biden taking the stage last night for his third State of the Union address. The president making his case to the American people ahead of the 2024 election. One key area for the White House, lowering the cost of housing for all Americans. Let's listen to his latest proposals.
PRESIDENT JOE BIDEN: I want to provide an annual tax credit that will give Americans $400 a month for the next two years as mortgage rates come down, to put toward their mortgages when they buy their first home or trade up for a little more space. Now pass and build and renovate 2 million affordable homes and bring those rents down.
[APPLAUSE]
BRAD SMITH: And so how realistic are Biden's latest economic plans? Joining us now, we've got Isaac Boltansky, who is the BTIG Director of Policy Research. Isaac, always great to have you on here with us. First and foremost, let's just start there. What is the realistic nature of putting these plans into action here? And perhaps, we should begin on the housing front, given that that's the clip that we just played there.
ISAAC BOLTANSKY: Yeah, look on the housing side, I think that we can say with emphatic certainty that none of these tax proposals will become law. This Congress is effectively at its end. We're going to see a few fights over funding. We're going to see, hopefully, I think, passage of a very narrow tax bill. But none of the proposals that the president went through last night on the tax side are going to become law.
And I think we also have to look at these through a political lens. Yes, they may be popular conceptually, but this country is suffering from a housing shortage. The issue here is supply. We are-- there's a dearth of, by some estimates, 4 million houses. We need 4 million more units to keep up with demand. And so there's some befuddling element here as to why we would try to stoke demand, given that the real crisis is driven by supply.