Newsletter 94: And some upcoming steps towards achieving it
In 2020, the pandemic tore through the country, pushing millions out of work, and thousands out of business. Yet, despite those dire circumstances, the number of people in poverty fell, thanks to robust government assistance. It’s an important proof point of how much leaders in Washington can do to materially help people when they set their minds to it. Unsurprisingly, some in Congress are already considering how they can defend and build on these gains. The Biden administration should make it its mission to do the same via executive branch action. While it may not be able to unilaterally write stimulus checks or extend unemployment benefits, there’s certainly much more that it can be doing now and in the near future to help in ways both direct and indirect.
That is definitely true at the Federal Reserve where Biden will have the opportunity to nominate a new Chair and up to three additional board members within the coming months. The debate over whether Biden should reappoint Jerome Powell or choose someone new (in all likelihood current board member Lael Brainard) is positively raging. Despite more and more economic pundits jumping into the fray to offer their particular two cents in defense of Powell, we continue to find the case for Powell’s reappointment to be as unconvincing as ever. My colleague Max Moran has a helpful taxonomy of those arguments, along with an explanation of why each is wrong. This refutation of many Powell-backers’ claims from Public Citizen’s Yevgeny Shrago is also well worth your time.
If you zoom out just a little from the wonky details of this fight -- the disagreements over the Fed’s responsibilities, the differing policy priorities, the confirmation speculation, and so on -- a more overarching divide becomes obvious. For various reasons, those who support Powell think it is unrealistic or unreasonable to ask the Fed to do more than it is now. Groups like ours, in contrast, think that what it’s doing now should be considered the bare minimum and that doing more is an urgent imperative. Consider, for example, that the Fed has the power right now to extend zero-cost loans to municipalities which would enable them to escape out from under Wall Street debt extended under predatory terms. As cities like Chicago petition the federal government to be able to use relief funds to pay off outstanding debt rather than financing city services, it should not be hard to see how Fed lending could quickly make a difference in the lives of millions. And that’s just one example of many. The Fed can also make consequential contributions to the fights against climate change, corporate consolidation, and financial speculation. Jerome Powell has made clear that the Federal Reserve will not do any of these things under his leadership. So, as Nobel Laureate Joseph Stiglitz recently told Reuters, if the Biden administration is “going to fulfill what is at the heart of its agenda...It should not be Powell,” who leads the Fed starting next year.
Biden’s most recent nominations for other posts, meanwhile, give reason for optimism that agencies from the Federal Trade Commission and the Commodity Futures Trading Commission to Ginnie Mae will “fulfill what is at the heart of [the administration’s] agenda.” Sadly, one recent nomination -- of corporate regulatory attorney Willie Phillips to a vacancy on the Federal Energy Regulatory Commission -- is a glaring exception to this trend. As Dorothy Slater explained in a statement following the announcement, “Phillips has done the bidding of utilities giants during his time on the D.C. Public Service Commission, and spent years working for corporate BigLaw firms which represent oil and gas interests...It will take an extraordinary about-face from Phillips to keep onlookers from seeing him as a crony of the fossil fuel industry. We’ll be monitoring Phillips closely, and expect hard work from him to green the grid at scale.”
Beyond elevating the right leaders, every aspect of Biden’s agenda will depend on the presence of a strong federal workforce with the capacity to administer existing programs and launch new ones. Biden has acknowledged this imperative and requested appropriations from Congress that would underwrite significant new hiring. While sizable, however, those increases generally still are not enough to not fill the capacity gap that has opened up over the last decade, let alone to go beyond simply making up those losses. As Congress dives into budget negotiations in earnest, Democrats should push for even more so that agencies are not only ready to tackle what’s already on their plate more effectively, but also tackle new challenges.
To see what I mean, look at President Biden’s recent executive order requiring employers with over 100 employees to mandate vaccines. To be as effective as possible, that new rule will need to be accompanied by robust enforcement. Unfortunately, the agency responsible for carrying out that enforcement -- the Occupational Safety and Hazard Administration (OSHA) -- has long lacked the capacity to adequately handle its existing responsibilities. And while the Biden administration has proposed increasing the agency’s budget by approximately 12 percent, that will not even be sufficient to return it to 2010 staffing levels (let alone higher levels that were the norm in the 1970s). To give OSHA the best chance of successfully enforcing this new policy, not to mention the administration’s Emergency Temporary Standard and new rules (like standards for those working in extreme heat), the administration and Congress must think bigger.
Despite a host of new independent agency nominations over the summer and in recent days, it’s clear that the Biden administration is still far from giving these the attention they require. Almost nine months into his term, the number of outstanding nominations to these boards has climbed to 22, with six more soon to come. While this brings the administration closer to having filled available Democratic seats, several consequential positions continue to lack nominees. The Federal Communications Commission, for example, has been unable to reinstate net neutrality rules because it is gridlocked 2 Democrats to 2 Republicans, with no nominee named for the open spot. Similarly, the Federal Election Commission remains useless because Biden has not seized an opportunity to nominate a pro-election law majority to the board.
Meanwhile, many of those that Biden has nominated are still months from confirmation thanks to a broken Senate process (we’ve suggested a fix for that here). That means that the CFTC, for instance, is likely to lose its quorum for a period of time this fall. Troublingly, similar problems may be just over the horizon if Biden doesn’t act fast. Acting FCC Chair Jessica Rosenworcel, for example, will be required to step down in January, which could leave the commission with a Republican majority if no nominee has been confirmed by then. A failure to act proactively to fill upcoming vacancies could also create missed opportunities at the United States Postal Service, where nominations to replace Postmaster General Louis DeJoy-backers Ron Bloom and John Barger in December could bring DeJoy’s reign of terror to an end.
Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week:
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