The battle to define the Biden economic team, explained

The Biden team’s planning for a hypothetical administration is already well underway. And on questions of economic policy, the transition effort is already becoming a locus of a fight about what a Democratic White House should look like.

On one side stand progressives, urging the creation of something like an ideological social democratic party. They want to draw a firm line between Democrats and the business community — leaning sharply against selecting personnel who’ve spent the Trump years working in the private sector in favor of career public sector and public interest workers.

On the other side are the forces of business as usual in the Democratic Party, which has traditionally been a big tent, with plenty of participation by people with close ties to industry. Here you have people like Steve Ricchetti, who worked in the Clinton White House, then became a lobbyist, then went back to the White House then went back to lobbying then became chief of staff in Biden’s vice presidency, then went back to lobbying before becoming chair of Biden’s 2020 campaign.

These résumé-based factors aren’t perfect predictors of ideology. But there does tend to be a correlation. And while Biden has signed up on paper for a very aggressive policy agenda, there’s a real chance that his administration will be staffed largely by Obama administration veterans who spent the Trump years making money on K Street, Wall Street, Silicon Valley, or white-shoe law firms.

The left is not happy about it.

“Be you the practitioner of surprise medical billing, a social media platform monopoly, or a for-profit ‘college,’ you want to see Jeffrey Zients [a Biden transition co-chair] get a major job under a President Biden,” Jeff Hauser of the Revolving Door Project tells me. “If you are opposed to the practices of those corporations, you think Biden should be like FDR and look past the Zients of the world when staffing his administration.”

At the same time, as much as this battle is currently consuming the energies of those with a passion for factional infighting, a pandemic and an economic crisis are sweeping the country. The divide is very real, especially on regulatory issues, but the two wings of the party have drawn fairly close together on the need for a major stimulus bill — one much larger than the Obama administration passed in 2009.

Personnel is policy

The key debate of the transition hinges on an old saying among 1980s-era conservatives: “Personnel is policy.” Ronald Reagan’s election then constituted the conservative movement’s triumph over the Nixon/Ford moderate wing of the party on a symbolic level. But to the extent that Reagan appointed old establishment hands to key stances, conservatives would not actually govern. Sen. Elizabeth Warren (D-MA) revived the slogan near the end of the Obama years, and quiet fights along these themes echoed in the abortive Hillary Clinton transition process.

Contemporary progressives shorthand their version of this largely in terms of concerns about the “revolving door.” They want to see a Biden administration composed overwhelmingly of people who’ve spent their lives toiling in public sector or nonprofit work, rather than cycling in and out of the corporate world or white shoe law firms.

Fundamentally, it’s an ideological concern rather than one about résumés. But for better or worse, career histories have become the dividing factor. As Hauser and David Segal of Demand Progress wrote in January, “even presidents whose campaigns have focused on taking on the powerful have found space for corporate insiders in their administration’s top roles.” And they’re determined to try to put a stop to it.

In pursuing that goal, they should have two valuable allies on the inside of the Biden transition: Gautam Raghavan, Rep. Pramila Jayapal’s chief of staff, and Julie Siegel, a longtime aide to Warren, both of whom were early senior hires for the transition on the domestic side.

Yohannes Abraham, who runs the transition on a day-to-day basis, doesn’t have equally sterling progressive credentials, but he does have a résumé that eschews the corporate world — going from the Obama campaign to the DNC to Obama’s reelection campaign to four years in the White House to a year at the Obama Foundation to three years teaching at the Harvard Kennedy School. He’s had ample opportunities to rotate into something more lucrative in the private sector, so has reason to look kindly on the argument that avoiding corporate work is the right choice.

Before going to work for the transition full time, he even taught a course titled Personnel Is Policy.

Also helping anchor the progressive side of things is Felicia Wong, the longtime president of the Roosevelt Institute think tank, who’s now accepted a formal role in the transition. She was not part of Clinton’s transition team, but on an informal basis was one of the key people charged with producing binders full of qualified progressive nominees. We spoke at the time about the theory and practice of identifying a diverse team of staffers with public interest backgrounds, and there’s no reason to believe her thinking on this has changed.

Still, this is the Biden transition team, not the Warren or Bernie Sanders transition, and there are heavy signs of establishment continuity.

Obama’s Mr. Fix-It

Jeff Zients is one of four co-chairs of the transition projects, alongside Rep. Cedric Richmond, political operative Anita Dunn, and New Mexico Gov. Michelle Lujan Grisham. But unlike the other three, Zients, who served in a number of roles in the Obama administration, including leading the National Economic Council in the second term, is someone you’d expect to see serving at a senior policymaking level in a Biden administration.

Zients is less a revolving-door type than an actual businessman who did a stint working for Obama. He got rich as a key lieutenant of David Bradley, running his consulting companies the Advisory Board and the Corporate Executive Board before founding an investment company called Portfolio Logic. A native of the DC area, he was part of the consortium that brought the Washington Nationals to town in 2005. After Obama left office, he became the CEO of Cranemere, a low-key private equity company (that among other things bought an anesthesia practice), and did a stint on the board of Facebook before resigning right when that was becoming an uncomfortable role for a Democrat.

Across eight nearly continuous years of government service, he had a remarkably low profile in the press. For most of Obama’s first term, he had the obscure job of “chief performance officer of the United States,” a role whose basic premise was that a whiz-kid consultant could improve public sector management.

The biggest exception to his below-the-radar persona stemmed from that job, as he was brought in on an emergency basis to rescue HealthCare.gov from its catastrophic launch. Later, as director of the president’s National Economic Council, he was simply not as well known as predecessors like Gene Sperling and Larry Summers. He was involved in an administration-wide push on competition policy, and allies seeking to bolster his progressive credentials say he was deeply involved in the “fiduciary rule” push that aimed to stop financial advisers from ripping off their clients (Trump later reversed this).

In practice, however, Zients was frequently Obama’s ambassador to the business world.

And they appreciated him. Josh Bolten, George W. Bush’s chief of staff and president of the Business Roundtable, told the Washington Post in 2018 that “Jeff is a staunch capitalist who was operating in an environment that was not consistently on the same page as he.” Thomas Donohue, of the more dogmatically right-wing US Chamber of Commerce, told the Post that “somebody had to deal with business, and Jeff appreciated entrepreneurs because he was one of them,” adding that the rest of the Obama administration was “of the belief that the best thing to do was regulate everything.”

This is exactly what worries progressives.

Energy in the executive

Four years of Donald Trump have only underscored the importance of executive branch personnel. The president, famously, is not particularly informed about or interested in public policy. And while he’s clearly drawn to hard-right ideas on “law and order” and immigration policy, Trump’s musings on economic and regulatory policy tend toward eclecticism. But his actual administration is staffed top to bottom with hardcore ideologues who’ve unleashed massive waves of regulatory change on virtually every front — allowing more pollution of air and water, less oversight of banks, and more hostility to labor unions, and making it much tougher to access social welfare benefits.

The Obama administration also delivered big regulatory changes.

But it simply wasn’t the case that Obama’s appointees had a clear mandate to do maximum progressive policymaking. Instead, his team included people like Cass Sunstein, who see themselves as honest brokers between the demands of left-wing activists and the lobbying of the business community. The left wants a team that will be as aggressive in deploying executive power to progressive ends as Trump’s has been to conservative ones. That means lawyers who seek statutory authority to do more, not find reasons to do less.

Realistically, the effort to anathematize people with private sector backgrounds — and especially lobbyists like Steve Ricchetti — is an imperfect proxy for ideological predispositions. Sunstein likely passes the left’s stated litmus tests, even though he was one of the figures progressive activists found most frustrating during the Obama years.

And all the wrangling in the world can’t change the fact that a great deal of continuity with Obama-era personnel was baked into the cake the moment Biden became the nominee. But Biden is not identical to Obama, and many key figures from Obama-era policymaking have changed their thinking on some issues.

Going big on stimulus

The issues where progressives will be fighting an uphill battle during the transition relate fundamentally to regulatory policy, especially as regards the financial sector and big technology — culturally liberal blue state industries with close ties to many Democrats.

There may simply be less to disagree about on fiscal policy, where more moderate Democrats might be more inclined to agree with the left that the Obama team was too timid on stimulus and too worried about budget deficits.

“Biden will need huge relief and huge new jobs stuff,” a top economic adviser to Obama who’s generally seen as on the more moderate side of the Biden economic brain trust told me at the beginning of September. “It does not make any sense to worry about debt in the recovery response.”

A key issue is that even though the Obama team doesn’t like to admit to error on any front, they believed in the winter of 2008-’09 that if Congress enacted too little stimulus it would be relatively simple to come back and ask for more. They worried at the time that an undisciplined stimulus process would result in a “Christmas tree bill” of dumb expenditures and pet projects.

Their takeaway from Obama’s first term is that the thing to worry about instead is “stimulus fatigue.” A new Biden administration would likely get one shot at fixing the economy, and if it doesn’t work, skittish members of Congress will become averse to doing anything more. Tactically, the right thing to do is to go as big as possible.

Jake Sullivan, a senior policy adviser to the Biden campaign, laid the groundwork for this kind of thinking in remarks to Politico’s Ben White last week.

“The magnitude of the crisis in 2008 was enormous, but this time we’ve got multiple overlapping crises,” Sullivan said. “As a result, the sense of possibility in both policy terms and political terms is big both in the scope of the agenda and the size of the investments the vice president wants to make.”

In other words, expect a really big bill. Senate staffers, similarly, tell me not to expect a repeat of the dual-track process of 2009 where fiscal stimulus and health care reform proceeded as separate pieces of legislation. Members with policy aspirations are instead going to work to get those aspirations tucked into a Covid-19 relief bill. If this includes things like Senate Democrats’ proposals for a child allowance and Biden’s proposal for universal housing vouchers, the relief bill could turn into a potent vehicle for permanent reductions in poverty.

Tensions are tighter when consideration flips from big-picture legislation to small-bore regulatory matters. Progressives would like to use the levers of the administrative state to try to cut many of the biggest players in corporate America — especially in the technology and financial sectors — down to size, by any means necessary.

The Obama administration didn’t see its purview that way. And while Biden has clearly ruled out some left-wing ideas like Medicare-for-all, banning fracking, or defunding police, he’s drawn no line in the sand on many regulatory issues. And at times, he’s indicated to the press that he doesn’t share his former boss’s enthusiasm for Silicon Valley.

Still, the hope for a bold new approach on regulation is not much more than a hope. The left has a real seat at the table in the transition, but at the end of the day, Joe Biden is the nominee and a great deal of continuity with Obama seems like the safest bet.

The presidential transition planning process has become increasingly formal since the 2012 cycle, as a result of new legislation designed to facilitate an orderly turnover of the literally thousands of political appointments throughout the executive branch. But there was no transition to be had in 2012, and the work done by former New Jersey Gov. Chris Christie for Trump was largely thrown out in a post-election coup in 2016.

Biden’s team is hoping to have the chance to put their work into practice, crafting a road map for an administration that can address the Covid-19 crisis and implement a strategy to, as they say, “build back better.”


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