The Biden presidency will be a dramatic departure from the Trump years, not least on the economic front.
It won’t bring “socialism” — the scare word used by Republicans against every Democratic policy. It also might not mean achieving the most coveted aspirations of Democrats, at least not at first.
If Republicans retain control of the Senate, the most ambitious goals of Democrats will be frustrated. Among them: Climate-friendly policies and investments toward an ambitious “Green New Deal,” expansion of Medicare, advanced infrastructure investments and higher taxes on the rich and corporations.
Even in the era of the imperial executive, the president proposes but the Congress disposes. This reality would have faced a President Bernie Sanders or President Elizabeth Warren, too.
The nation remains deeply, near-historically, divided. The “two broad voting coalitions fundamentally at odds,” as the Pew Research Center put it, can’t even agree on the same facts.
As a result, President Joe Biden will be playing defense and hoping the 2022 elections bring him some good luck. (The occupant of the White House usually loses congressional seats in midterm elections, and this year Democrats actually lost House members while still keeping control of that chamber.)
The challenge is profound.
As University of Chicago Law School professor Eric Posner wrote in Project Syndicate, Biden “will enter office confronting widespread economic distress, the seasonal escalation of a deadly pandemic, and a brutal international environment.
“These challenges would test even the most skilled leader. But Biden will be further hampered by a divided government, a hostile judiciary, a weakened federal bureaucracy, and lingering Trumpian populism among the public.”
Biden rightly sees Job One as getting control of the pandemic. It’s bracing that among his first steps as president-elect was to name a COVID task force made up of top physicians and scientists. He has also pledged to use the Defense Production Act if necessary to require businesses to make ventilators, medical supplies, personal protection equipment and other gear to address COVID-19.
This isn’t only a public health crisis but an economic one.
Until the virus is beaten, America faces a long pandemic depression. More than 13 million Americans are still out of work and collecting the expanded benefits that expire at year-end. Meanwhile, major sectors of the economy — air travel, tourism, conventions, hotels, restaurants, among them — remain in deep trouble. The shutdown — possibly to become worse this winter — is hurting productivity and innovation.
Biden’s power of appointment is another cause for hope. For example, Federal Reserve Gov. Lael Brainard is a leading contender to be named Treasury secretary. Brainard has been effective in tilting Fed policy toward more oversight at key moments, despite being the only remaining Democrat on the central bank’s board. She’s among the best economic minds in government.
The new president can reverse a host of Donald Trump’s executive orders and policies, reinvigorating the Consumer Financial Protection Board and aggressively reasserting leadership on the environment and climate change, for instance.
Presidential executive authority ranges from rejoining the Paris Climate Accords to reversing Trump’s order that every federal agency dismantle its climate policies. Biden has pledged an order requiring public companies to disclose their financial risks from global warming and their emissions. Climate change is the greatest long-term economic challenge facing the planet.
Another immediate priority is a robust and comprehensive stimulus.
It won’t be easy if Republicans keep control of the Senate. Remember when Republican leader Mitch McConnell said in 2010 his priority was to make Barack Obama a one-term president? The goal will be likely the same for Biden, despite Biden’s long service in the Senate and the pair’s past ability to negotiate.
Out of the White House, expect Republicans to suddenly obsess over the deficit and debt, never mind the role their tax cuts for the rich and corporations had in running up the red ink. The GOP will push back against every Biden initiative to invest in infrastructure or expand health care and educational opportunities.
Republican-led “austerity” held back the recovery during the Obama years. It will do the same in the Biden years unless he can successfully sell his plans to the American people.
Biden can restore normality to America’s relationship with its allies and partners. On the economic front this is particularly important on trade.
Ending Trump’s trade wars would be a win-win and especially benefit a trade-dependent state such as Washington. The president has broad latitude on trade. Joining the Trans-Pacific Partnership, the high-standard agreement negotiated by Obama, would be both economically beneficial and also check China’s ambitions (this would ultimately have to be ratified by Congress).
Republicans aren’t the only challenge to the new president and “Bidenonomics.”
He is the leader of a fractious party that’s the opposite of the Republicans’ discipline and unity. Will Rogers’ quip, “I am not a member of any organized political party. I am a Democrat,” has never been truer.
Biden’s centrist, problem-solving leanings will face pressure from the “woke” far left, many members being only nominally Democratic but ready to break ranks if their purist demands aren’t met. Think: Today’s Seattle City Council.
Among their economic demands are an aggressive Green New Deal, single-payer health care, tuition-free college, radical steps to promote income equality and viewing business and “moneyed interests” with hostility. These aspirations envision a major expansion of government beyond Biden’s most ambitious plans.
In the minds of this activist cohort, realities such as Republican control of the Senate may not matter. They will take their frustrations out on Biden.
One could argue that many heartland voters, put off by such activist demands as defunding the police and the endless protests in Portland and Seattle, chose Trump as the lesser of evils, so that the noisy left even cost the Democrats seats in the House. No matter. This faction will be one of Biden’s biggest challenges when compromise and deal-making is required.
But Biden’s demeanor will work for him.
As author and Vox founder Ezra Klein tweeted this week as Trump refused to concede, “Biden’s discipline and tonal control through this whole thing has been extraordinary. Or maybe the better word is: presidential.”