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Meet the new boss, very much unlike the old boss

Newsletter 68: While a bit less pedal to the metal than we prefer, Biden has swiftly begun DeTrumpification

Revolving Door Project

Jan 27, 2021

It’s been seven days since President Joe Biden was sworn into office and no one can deny that his new administration has been busy. The ban on travel from Muslim majority countries has been lifted. Funding for the border wall has been discontinued. Biden reinforced DACA, did away with the ban on transgender people serving in the military, and rejoined the Paris Climate Agreement. And that’s before he even did anything that wasn’t just reversing Trump’s policies.

Biden also made several, notable advances. His “Buy American” executive order directing the federal government to procure goods made in the USA was cheered, as was his decision to stop the Keystone XL pipeline. But, of course, there’s so much more to be done. Hopefully, as the administration adds new members, its momentum and ambition will only grow.

Transition:

Somewhere on Biden’s busy first day, he did find the time to send several Trump holdovers packing. That includes Consumer Financial Protection Bureau Director Kathy Kraninger and United States Agency for Global Media CEO Michael Pack. Biden also asked National Labor Relations Board General Counsel Peter Robb for his resignation, then removed him after he refused. That Biden would take this step was somewhat less assured because, while legal, firing the NLRB GC is norm-defying. It is heartening to see that Biden is not blindly adhering to existing norms but weighing the value of their preservation against the harm that would ensue from respecting them.

Unfortunately, this attitude does not seem to have extended to every one of the officials we hoped to see Biden fire. Any normative value, for example, of keeping IRS Commissioner Charles Rettig in place is surely outweighed by the cost. The same goes for FBI Director Chris Wray, Director of the Federal Housing Finance Agency Mark Calabria, the Chief Operating Officer for Federal Student Aid, and all of Trump’s US Attorneys.

The names of new appointees continue to flow in and for the most part they have given cause for celebration. The Office of Information and Regulatory Affairs (OIRA), aka “the most important [office] no one has ever heard of” is being stocked with champions for regulation in the public interest. Sharon Block, an Obama-era labor official, will be the associate administrator and the Office’s interim leader while Biden’s eventual nominee for the role awaits Senate confirmation. Block has been vocal in her belief that OIRA needs to cease to play the role of “regulatory gatekeeper” and instead help to coordinate and advance new regulation. K. Sabeel Rahman, the President of Demos, will also be joining the little office as a “Senior Counselor.” Rahman has championed proposals for a more “participatory regulation” to counter corporate capture. Alongside Biden’s recent executive order on regulatory review, these picks leave little doubt that Biden’s OIRA will look much different than Obama’s--focused on the interests of workers, consumers, and the environment rather than sob stories from multinational corporations..

While very few of Biden’s picks have yet secured Senate confirmation, many of those who don’t require it are already on the job and keeping busy. The Department of Labor announced yesterday that it had rescinded several pieces of Trump-era guidance. The Department of Agriculture did the same. It’s just the beginning, of course, and getting rid of Trump’s regulations will be more arduous, but it’s excellent to see them getting started.

Unfortunately, it was not all good news. On Wednesday night, as many continued to celebrate the new President’s inauguration, it leaked that Michael Barr was the frontrunner to take over the Office of the Comptroller of the Currency. There are many reasons to find this news disappointing. Barr, while a champion of the CFPB, fought hard against many other financial regulatory measures in Dodd-Frank. More recently, Barr has been closely associated with the Fintech industry through advisory roles with Ripple, Lending Club, and the Alliance for Innovative Regulation (a fintech-funded front group whose “innovative” idea for regulation is simply to slash it). As Comptroller, Barr would hold immense power to deliver for or deny his recent patrons.

The news was particularly bitter because of who the other reported frontrunner is: Mehrsa Baradaran, a banking law professor who is an expert on the racial wealth gap. Given Biden’s promises to address racial inequality, Baradaran’s appointment seemed likely.

Appointees like Barr will continue to be a liability as right wing pundits seize on individuals’ corporate connections to paint Joe Biden as corporate America’s stooge. With his ethics pledge last week, Biden took an important step towards raising the bar for ethical conduct in the highest ranks of political leadership meaningfully beyond that under President Obama. Still, that pledge leaves many gaps for corporate interests to work their way in and, thus, for bad faith attacks to land. Biden should take additional steps -- like requiring his appointees to divulge more about the nature of their past employment -- to quell legitimate concerns and steal the oxygen from cynical attacks.

Governance

As of Friday, Schedule F is no more. Biden did away with the new category saying that “undermines the foundations of the civil service.” In the end, it would appear that Trump was not able to carry out his scheme to remove the civil servants who challenged him and, potentially, install some of his cronies into career ranks. Of course, Trump has degraded the civil service in other ways that are deserving of the new administration’s attention.

On our blog this week, Sion Bell and Ella Fanger outlined some of the measures that the Biden administration can implement to rebuild government capacity and deliver on its mandate. This will not happen overnight, but should be an explicit priority for the administration from the start. On Friday, in addition to getting rid of schedule F, Biden took a small step in this direction by setting the federal government on the path towards a $15 minimum wage for its workers and federal contractors.

Independent Agencies

For the American Prospect last week, Eleanor Eagan laid out the case, once again, for Senate Democrats to care about minority party seats on independent regulatory commissions. It’s not the first time that we’ve made this argument but the elevation of Federal Trade Commissioner Rohit Chopra to Director of the CFPB has only further proved our case. Seats on independent agency boards, even when in the minority, are an excellent mechanism by which to build the party’s bench when it is out of the White House. That is a lesson that Senate Democrats should not forget the next time their party loses the presidency.

For the moment, all eyes must turn to the more pressing issue at hand: securing majorities on these powerful commissions. Many are currently tied 2 Democrats to 2 Republicans thanks to existing vacancies or recent resignations. That includes the Consumer Product Safety Commission (CPSC), the Federal Communications Commission (FCC), the Federal Deposit Insurance Corporation (FDIC), the Securities and Exchange Commission (SEC), and the United States Postal Service (USPS). As of this Friday, it will also include the Federal Trade Commission (FTC).

The country cannot afford any delays in retaking these agencies. New Democratic majorities will have their work cut out for them rolling back damaging Trump-era rules and putting in place new, bolder regulatory frameworks to manage new technologies, climate change, and long-running, neglected problems. Biden shouldn’t make their jobs any harder by limiting the time in which they have to accomplish their feats.

But while all of these should be a priority, one agency in particular rises to the top: USPS. With mail delays set to endure for the foreseeable future and fiscal insolvency once again looming, there is no time to waste. Three seats on the USPS Board of Governors are currently open, awaiting Democratic board members. If filled, the board could act promptly to fire Postmaster General Louis DeJoy. From there, they could fill the seat with a leader committed to the Postal Service’s mission and ready to lead it into its next era. What is Biden waiting for?

(Note that this is the less extreme route to retaking control at USPS. This week Rep. Bill Pascrell called on Biden to fire the entire USPS Board of Governors for selecting Louis DeJoy, who has sought to destroy the service, as Postmaster General. We support this call, but note as the Congressman does this will require demonstrating “cause” for termination, unlike in the case of, e.g., IRS Commissioner Charles Rettig or FBI Director Wray.).

Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week:

The Chopra Gambit

13 Questions Which Fintech-Tied Appointees Must Be Able To Answer

Fintech's Gaze Into The Biden Administration

Potential Comptroller of the Currency Mehrsa Baradaran's Background

Department of the Obvious: Wall Street and FinTech Friendly People Should Not Oversee Federal Banking System

Why the Comptroller of the Currency Must Be a Climate Leader

Michael Barr's Past And Present Raise Deep Concerns If Appointed

Why the Next CFTC Chairperson Must Prioritize Climate Action Over Market Fads

If Biden Doesn’t Close the Revolving Door, The Right Wing Will Eat Him Alive

Right-Wing “Holding Pen” Firm May Snag Antitrust Division If Susan Davies Is Appointed

Big Tech's Top Picks to Lead DOJ Antitrust Division