Biden Should Call Corporate America’s Whining What It Is: Malarkey!
Newsletter 57: A sneak peak of the fissures & threats that would face the potential president
If Biden wins next Tuesday, it will be the second time in just over a decade that a Democratic president-elect is faced with the prospect of taking power amid a deep economic crisis inherited from a lawless predecessor. For all of the fatalism that this observation might inspire, however, there is reason to hope that the coming months and years need not be a redux of 2009-2010. In the 12 years since the Obama-Biden administration first stepped foot in the White House, the terrain of Democratic politics has shifted. This time around a Biden transition and the resultant administration will have to contend with a left flank that is not only vociferous but commands real boots on the ground, independent of the institutions of party power. They will not be easily swept aside, a fact that many within Biden’s orbit and outside of it seem to recognize.
We’ll admit that accusations leveled in Monday’s Politico Morning Money -- that the Revolving Door Project is getting ready to critique conflicted potential appointees, complete with a link to a supposedly compromising blank web page created in preparation for the transition -- prompted some chuckles from our team. Wall Streeters scanning our website in search of clues about who we oppose would do better to visit the prominently displayed section on “Our Work.” As regular readers of this newsletter will know, we are hardly coy about our views on who should not have a place in the federal government’s upper ranks.
2020 (and potentially 2021)
Despite signs that the Biden administration is indeed taking heed of anti-corporatist critiques, so far evidence of its substantive commitment to these principles is spotty at best. Just this week we learned that the transition is seriously considering Rhode Island governor Gina Raimondo for the role of Treasury Secretary. Raimondo got her start in venture capital, but it’s how she’s used her public roles to enrich financiers that really raises eyebrows. As the State Treasurer, Raimondo cut pension benefits to public employees, eliminating cost of living adjustments for those who had already retired. Raimondo also shoveled a sizable chunk of the state’s pension fund into a hedge fund that charged hefty fees and underperformed the market. Of note for a potential pandemic-era Treasury Secretary, Raimondo has used the crisis to drastically cut funding for diverse cities, potentially illegally. In other words, this pick seems perfectly designed to not only enrage the organized left, but also much of organized labor - a constituency Biden has made clear he considers to be essential.
While the fight over Biden’s Treasury Secretary continues to occupy center stage, it’s important not to forget about the vast array of other senior positions the transition team will concern itself with prior to election day. One such role that comes to mind? The Secretary of Agriculture. Former Secretary Tom Vilsack will reportedly play a “major role” vetting candidates for his old job and those that surround it. That all seems well and good until you learn that family farming groups overwhelmingly oppose his involvement thanks to his conciliatory posture towards BigAg while in the government and downright embrace of it once on the outside. Shutting out corporate America’s allies doesn’t just implicate Wall Streeters.
Although, speaking of Wall Street, they appear to be making quite the push to ensure Biden doesn’t follow through on Rooseveltian rhetoric. By the end of the cycle, people in the securities and investment industry will have given over $74 million to the Biden campaign. It’s fair to assume that if Biden prevails, it will not be long before many of them call to collect.
But here’s the thing, there’s really no reason for Biden to oblige. While $74 million is an enormous sum, Biden could have foregone every cent of it and still have outraised Trump by over $200 million. He doesn’t owe Wall Street anything and he should act like it.
Of course, any effort to shut Wall Street out will prompt whining about the injustice of denying very successful people the jobs they want. As the project’s Jeff Hauser and Demand Progress’ David Segal argued in The New Republic this week, who cares? “Opponents of stronger ethics rules don’t actually believe they would lead to a significantly worse government. Many even acknowledge these rules work in general but worry about specific individuals being ‘unjustly’ denied an appointment they deem rightfully theirs. What specific right entitles them to power is a question these types never want to answer.”
It’s long past-time we stop allowing corporate America to set the terms of this conversation. While they like to claim that those who demand higher standards for the country’s political leaders are draining the pool of potential talent, it is they who have ensured administration after administration limit its search to a puddle containing only lobbyists, CEOs, and corporate-backed think tankers. This hardly encourages diversity along any metric: experience, geography, educational attainment, race, or socioeconomic class. Rather than narrowing the field, we are working to expand it by going outside the confines of official Washington, “to federal agencies, state houses, city halls, nonprofits, universities, and small businesses all across the country.” Building an administration that reflects the country’s diversity and that is unquestionably committed to vigorously advancing the public interest is no contradiction. In fact, the two must go hand in hand.
If there’s one thing you read today, we’d like to humbly ask that it be this.
Governance
No one really expected Trump to go out without a fight, but if the run-up to his likely lame duck is any indication, the next three months could be worse than expected. Last Wednesday, the President issued an executive order that has the potential to destroy the civil service as we know it. The order directs the Office of Personnel Management (OPM) to create a new civil service category, “Schedule F,” and lays out a set of vague criteria by which to assess current federal workers. Those who are in “policy-determining” roles or who supervise senior civil servants would then be moved into this new category which carries weaker protections against retaliation and termination. In the era of complex government, that could be interpreted to encompass a wide swath of senior civil servants. Worse still, because personnel rules are not subject to notice and comment, it could go into effect by January 19, 2021.
Imagine, for a second, how much worse the last four years might have been had these bureaucrats been subject to Trump and his appointees’ every whim. The pandemic response has been a disaster but it surely would have been worse had every civil servant involved thought that contradicting political figures would mean losing their job. The good news is, this particular nightmare scenario only really becomes a problem if Trump wins.
The bad news? The Order may create a means for Trump appointees to “burrow” into the ranks of the civil service and erect roadblocks for a Biden administration’s every action. Political appointees moved into Schedule F would not have the full rights of a civil servant hired competitively, but they enjoy greater protections than before. Namely, they can’t be fired for “partisan” reasons, making it difficult for a Biden administration to sweep them all out on day one.
Biden can do away with these rules as soon as he sets foot in the Oval Office, but by that time a great deal of damage could already have been done. To stop the rot before it sets in, Congress needs to act. It can, as several representatives have already proposed, prohibit any spending on implementation of this order. Independently, that’s not likely to go anywhere, but taking that language and inserting it into the continuing resolution that will have to be voted on in December could do the trick.
As our Eleanor Eagan argues for the American Prospect, Trump’s attacks on the civil service should be understood as a central pillar of his governing ideology and a driving force behind the harm he has caused. A competent civil service empowered to contradict political leadership is an existential threat to government by and for corporate America. This realization should put Democratic enthusiasm for more subtle assaults on this workforce to rest.
If Biden wants to take on Trump’s legacy, reversing the damage he has caused and building a federal government more resilient to similar threats moving forward, he will need to commit to protecting and expanding the federal workforce. As our Yevgeny Shrago lays out for Washington Monthly, rebuilding and reinvigorating the Office of Personnel Management will be an essential piece of any such plan.
Congressional Oversight
If Trump is willing to target the civil service so blatantly in the light of day, it stands to reason that his administration has been perpetrating subtler attacks on the integrity of the civil service system behind the scenes. For Public Seminar last week, our Mariama Eversley and Yevgeny Shrago reflected on the lessons of an earlier period of civil service politicization that occurred in President George W. Bush’s Department of Justice. Over a period of several years, political appointees took over hiring processes in key DOJ divisions and installed often unqualified ideological compatriots into permanent positions.
When Democrats took the House majority in 2006 they launched an investigation with the help of the Department’s inspector general, uncovering a massive infiltration. Having that information in hand allowed those who inherited the Department’s leadership to understand the problems they would face and to begin to repair the damage.
House Democrats today must learn from this episode. There is little doubt that we do not fully understand the extent of the damage Trump and his appointees have caused. Without a clear picture of the problem, solutions will be slower to come than need be.
In contrast, by performing thorough oversight now, House lawmakers can help a Biden administration to strategize for his critical first days. Examining and documenting, for example, the seemingly extensive rule breaking that is propelling new de-regulatory rules across the finish line might open up avenues for faster repeals. A sober accounting of the extent to which political appointees have burrowed into the civil service will help a Biden administration to avoid unnecessary delays. Trump has already started looting all that he can in anticipation of a loss. If that materializes, it will surely accelerate. We’ll need all hands on deck to guard against the worst.
Independent Agencies
It seems Trump may actually have heard Matt Gaetz’s whining last week. On Wednesday he sent two new nominees for the Federal Election Commission to the Senate. Now we’ll just have to see if McConnell shows any more urgency advancing them than he has the current pending nomination.
Meanwhile, Wall Street appears to be counting on Republican majorities at independent agencies, many of which could last several years into a Biden administration, as its “defense” against a blue wave. That financiers are giddily looking to these seats makes it all the more important that President Biden not shrink away from firing those that he can - like the Director of the Consumer Financial Protection Bureau (CFPB).
Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week:
Donald Trump Politicized the Federal Bureaucracy: The Next President Needs to Reverse That
Uncle Sam’s HR Department Needs Help
Beltway Lobbyists Are Clutching Their Pearls Over Biden’s Ethics Reforms
Note to Biden: A President Can Do a Lot Even Without the Senate
Jared Bernstein and the Fight Over Joe Biden's Personnel
The Left Has Given Joe Biden Space. They Won’t If He Wins.
Wall Street spent over $74 million to back Joe Biden’s run for president, topping Trump’s haul
Breaking With the Trade Consensus
How BlackRock is on track to infiltrate a Biden administration
Microsoft quietly prepares to avoid spotlight under Biden
Why Wall Street is banking on a "blue wave"
Grassroots Democrats Are Preparing to Swarm the Biden Administration