Biden's Policy Agenda Rests Heavily on

Senate Outcome
Jim Tankersley

Fri, 13 November 2020, 4:06 am GMT+8

Democratic U.S. presidential nominee and former Vice President Joe Biden smiles as he pulls off his face
mask to speak about the results of the 2020 U.S. presidential election during an appearance in
Wilmington, Delaware, U.S., November 4, 2020. REUTERS/Kevin Lamarque TPX IMAGES OF THE
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WASHINGTON — President-elect Joe Biden’s transition team is preparing

multiple sets of policy proposals for the economy, health care, climate change
and other domestic issues, including the ambitious agenda Biden laid out in his
winning campaign, while acknowledging it may have to be pared back in
recognition of divided government.
Where the incoming administration lands depends heavily on two Senate runoffs
in Georgia in early January.
If Democrats win both races, close aides to Biden and economists who helped
advise his campaign say the president-elect will try to push through a large
stimulus plan for the flagging economic recovery — most likely along the lines of
the $2.2 trillion that House Democrats approved this fall. His stimulus plan under
such a scenario would include hundreds of billions of dollars for state and local
governments that have lost tax revenue amid the pandemic recession, extended
unemployment benefits for people who lost jobs during the crisis and a new
round of aid for small businesses.
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His team is also developing a government employment program — called the
Public Health Jobs Corps — that would put 100,000 Americans to work on virus
testing and contact tracing.
A narrow majority in the Senate would also give Biden the chance to push
through his proposed tax increases on corporations and the rich — tax hikes that
would be used to fund the president-elect’s more ambitious plans like rebuilding
roads and bridges, speeding the transition to a carbon-free energy sector and
helping Americans afford health care.
But if Republicans win even one of the Georgia seats, Biden will most likely need
to settle for a wave of executive actions that would bring more incremental
progress toward his policy goals, while trying to cut compromise deals with Sen.
Mitch McConnell of Kentucky, the majority leader.
Tax increases, even for the ultrarich, would almost certainly be off the table, as
would be expanding the Affordable Care Act to give Americans the ability to buy
into a government insurance program like Medicare. Biden would continue to
push for infrastructure and health care bills, economists around him say, but he
would be unlikely to win support for his full agenda in those areas.
In order to extend as much economic aid to people, businesses and state and
local governments as his team believes is necessary to sustain the recovery,
Biden could be forced into a creative reshuffling of unspent money from the
previously approved stimulus package — the sort of move that Democrats
criticized when President Donald Trump acted this year to repurpose federal
disaster funding for a supplemental unemployment benefit.
Biden’s aides say his transition team is working on a variety of contingency plans
depending on economic conditions, including whether the recent surge of virus
cases chills consumer spending, and on party control of the Senate. The team is
also moving ahead with finalists for appointments to key Cabinet positions and
other posts, many of which will be announced before the Georgia runoff.
“President-elect Biden’s transition team is filled with experts who are, at this very
moment, engaged in the work of fleshing out the Biden-Harris campaign policy
proposals into actionable executive actions and legislative proposals,” said Stef
Feldman, Biden’s campaign policy director. “The Biden-Harris administration will
be prepared to act on Day 1 in all scenarios, including the different possible
outcomes of the Georgia runoffs.”
Georgia is headed to a runoff because none of the candidates running for the
two Senate seats won 50% of the vote, a legal threshold set by the state. On
Jan. 5, the state will hold another election, with Sen. David Perdue, a
Republican, up against Jon Ossoff, a Democrat; and Kelly Loeffler, a
Republican, up against the Rev. Raphael Warnock, a Democrat.
The races will be competitive and expensive, reflecting Georgia’s newfound
status as a battleground state and the high stakes of the outcome. The
presidential race there is still undecided, with Biden currently leading Trump by
just over 14,000 votes in the state, which has voted Republican in every
presidential election since 1992. On Wednesday, Georgia’s Republican
secretary of state authorized a hand recount of the election — a move
championed by Trump but one officials have said is unlikely to erase Biden’s
narrow lead.
“A Democratic majority in the U.S. Senate would be the biggest difference maker
to help President-elect Biden deliver for working families across the country,”
said Sen. Chuck Schumer of New York, the Democratic leader.
Such a majority would give Democrats the ability to pass certain legislation
without running the risk of a Republican filibuster by employing the same
parliamentary maneuver that Trump and his party used to pass sweeping tax
cuts in 2017 without a single Democratic vote. It would almost certainly be the
vehicle for Biden to achieve most of his ambitions in areas like infrastructure,
education and climate change. And it would allow him to raise taxes on
companies and the rich, which Republicans would otherwise almost certainly
block.
“It seems like it’s everything,” said Heidi Shierholz, a former Labor Department
economist under President Barack Obama who is the policy director at the liberal
Economic Policy Institute in Washington. “If it’s 50-50 in the Senate after the
Georgia races, then the Democrats will be able to push something substantial
through that will be a really key thing for boosting the economy. If not, it just
doesn’t seem possible.”
While Biden’s campaign platform was less expensive and expansive than his
Democratic primary race rivals’, it featured more new government spending and
targeted tax increases — in dollar terms — than any Democratic nominee before
him.
Much of Biden&aposs campaign’s domestic policy agenda would require acts of
Congress, including many of the economic policies that Biden’s transition team
has highlighted in recent days.
That list starts with a stimulus proposal that hews closely to the multitrillion-dollar
package that House Democrats approved this fall, though they could not reach
an agreement with Trump administration officials and McConnell in order to pass
the bill into law.
Biden’s bigger-picture agenda also calls for new legislation. He wants to pass an
infrastructure bill that includes expanding broadband internet to rural areas and
increasing federal spending on clean energy research. He would fund universal
prekindergarten, enhanced Social Security benefits and expanded tax credits for
health insurance coverage. He would raise the federal minimum wage to $15 an
hour from $7.25 and make it easier for workers to form a labor union.
To offset that new spending, Biden would seek congressional approval to raise
taxes on businesses, particularly multinational corporations, and individuals
earning more than $400,000 a year.
Slivers of that agenda would remain possible for Biden without Senate control.
Business groups remain hopeful that he and McConnell could reach agreement
on a slimmed-down stimulus bill and a compromise infrastructure package,
perhaps in the form of a new highway bill.
Biden could also push executive actions to reshape trade, financial regulation
and energy policy, among others. His Treasury Department could use its
regulatory authority to nibble at the edges of tax policy, including shifting
enforcement efforts to focus more on high earners and companies that dodge tax
liability, said Kimberly Clausing, an economist at Reed College in Oregon who
provided tax policy advice to Biden’s campaign.
Biden’s campaign platform included a wide range of potential executive actions,
such as placing new requirements on firms bidding for federal contracts to
promote higher pay and racial equality. It also included a plan to direct $400
billion of federal procurement to products made in the United States and to
impose strict new fuel economy standards to combat climate change. Transition
advisers are also exploring how Biden might repurpose previously allocated, but
unspent, stimulus funds to help people and businesses.
Liberal economists and many progressive activists fear that scenario would
expose the economy to the risk of a sluggish recovery early in Biden’s term.
“Just being totally realistic and honest, it’s huge” for the fate of Biden’s agenda,
said Michael Linden, the executive director of the Groundwork Collaborative,
which promotes progressive policies. “That doesn’t mean that if Democrats win
the Senate, they get all their wildest dreams. It does mean that instead of having
to give everything they need to Mitch McConnell to get him to think about doing
something, you could actually get some things passed to improve people’s lives.”
But business groups and many consultants in Washington are welcoming the
possibility of a divided government with little threat of corporate tax increases.
“We have to lower the ceiling of expectations in that scenario” for Biden’s
agenda, said John Gimigliano, a former Republican tax policy staff member in
the House who is now at KPMG in Washington. “We’re looking at more modest,
more bipartisan stuff. And to be honest, maybe that’s not the worst thing.”