The Biden Administration just came out with next years budget (2022) last Friday, May 28th. It’s a massive $6 Trillion dollar funding plan targeting certain sectors!! This plan could give some insight on what stocks & sectors are ramping up during Bidens tenure.
The budget includes funding to the following areas…
- Health
- Clean Energy
- Defense
- Immigration
- Transportation
- Agriculture
- Justice Departments
- Cybersecurity
- Space
“Mr. Biden’s budget blueprint serves to advance some of his administration’s most ambitious goals: Reducing disparities in incomes and wealth through the tax code, curbing greenhouse gas emissions and putting the U.S. on a stronger footing to compete with China in the global battle for economic and technological supremacy.”
Kate Davidson, Wall Street Journal
I will only go over the biggest spending areas and/or what I think is most important to note.
Health
If the past 16 months have taught us anything, it’s that our health is a top priority. The budget includes $132 billion for the Department of Health and Human Services. Mainly for pandemic related objectives.
I like this, but think more money should go toward health related services. After all, we need it badly.
Stocks I believe will reap the benefits in the healthcare sector are United Health ($UNH) Anthem ($ANTM) and Abbvie ($ABBV). These are larger cap stocks, but excellent companies.
Clean Energy
It’s no secret The Biden Administration put an emphasis on creating a better quality of life for our planet. They want to do so by reducing carbon emissions, fossil fuels, climate change, etc.
But Biden wants to do so by creating more jobs, insteading of decreasing them. Which would have happened if he just tried to eliminate coal mines, pipelines, factories, etc. and leave it at that.
The plan calls for roughly $220 billion dispursed in various areas. The biggest contributors are…
- $36 billion to fight climate change.
- $171 billion to efforts reducing the useage of fossil fuels.
At the moment I don’t know of any real players in the clean energy stock space. I will update soon once I find something. Biden is pushing HARD to make an environmentally friendly country. This would be a great idea for your portfolio.
Agriculture
Improvements for rural lands, waterways, rural infrastructure, and new technology expansion make up this section. What strikes me the most is improvements & funding in agricultural technology.
Tech being an already high demand field paired with agriculture leads me to one company… JOHN DEERE ($DE)!!!
John Deere is an industry leader in farming and agriculture, they have virtually no American competition. They produce quality products that sell incredibly fast no matter the economic conditions. A great place to park your money is in this stock.
Where Is All This Money Coming From…?
Yup, you guessed it. Taxes!!
- Biden wants to raise the corporate tax rate from 21% to 28%.
- Increase capital gains tax on the wealthy to 43%!!
- High-Income households will give significantly more money to Uncle Sam.
Nothing Is Set In Stone Just Yet
Bidens budget plan is just a proposal for the time being. The plan has to be passed through Congress and be approved in order to be set in action.
Personally, I think there will be a lot of changes to it, considering all the Congress members are wealthy and don’t want to give even more of their money away to taxes.
The bill will probably be cut by a significant margin. I could easilly see this bill being a 3.5-4 trillion dollar bill as opposed to $6 trillion.
The Common Trader 