Progressives Push Biden Hard on Summers
Newsletter 37: While House Democrats do their best to reenact Groundhog Day
2020 (and Potentially 2021)
Late last week, Biden announced the co-chairs of his vice presidential selection committee. They are former Senator Chris Dodd (a choice that raised many eyebrows), Delaware Congresswoman Lisa Blunt, Los Angeles Mayor Eric Garcetti, and Cynthia Hogan. In reporting on the announcement, Cynthia Hogan was most frequently described as “a former White House and Senate counsel to Biden,” but that biography leaves out what is to Revolving Door Project the most important detail. Since 2016, Hogan has served as Apple’s vice president for public policy and government affairs.
As our Max Moran wrote, having a top lobbyist (in reality, if no longer in registration) like Hogan on Biden’s VP committee is a tremendous coup for Big Tech. With anger mounting at the industry’s growing control over our personal lives, politics, and economy, the next administration will have no choice but to contemplate action. Biden’s choice of personnel, including for roles like the Vice President, will help determine whether his administration strikes at the heart of the problem or -- like BigTech has done -- pays lip service to the need for change without actually changing anything at all. Hogan’s inclusion is a worrisome sign that Biden might favor the latter approach.
Meanwhile, pressure continues to mount for Biden to cut ties with Larry Summers. This week over two dozen progressive groups called on Biden to “remove Larry Summers from any role advising [his] campaign and exclude him from a future Biden administration.” At stake is not just whether Summers’ bad advice influences Biden’s policymaking, but whether Summers is able to elevate any of his troubling colleagues or protégés.
Consider, for example, Natasha Sarin, Summers’ former advisee and frequent coauthor. She and Summers have regularly teamed up to criticize progressive taxation and, in particular, the wealth tax. Just this week, Sarin put out a paper that argued in favor of allowing people to draw from their social security benefits now to “provide the liquidity they need to weather this storm.” If readers think that idea sounds familiar, it’s probably because it closely resembles the Koch-backed paid leave proposal that Ivanka Trump and Marco Rubio put forward a couple of years ago. On the right, such plans have been openly advanced as the first step along the path to social security privatization. All the more reason to keep Summers and his cohort out!
The American Prospect’s Bob Kuttner has some more names for Biden to keep out, this time on trade policy. Biden seemed to ignore the original Do Not Reappoint list (atop of which is none other than Larry Summers). Perhaps after the backlash he’s received, however, he’ll pay closer attention to this one?
Small Business Administration
RDP is closely examining the Trump Administration’s response to the pandemic. What has especially piqued our interest? A little known executive branch agency that was thrust into the spotlight over the past month. The Small Business Administration (SBA) is central to the federal government’s response efforts to the economic crisis caused by COVID-19. But the SBA’s faulty rollout of two COVID-response loan programs has revealed the consequences of mismanagement and budget cuts.
After digging into the SBA’s troubled past, we found that the SBA had struggled for years to effectively respond to economic crises and disasters. The agency is often appropriated significant sums of money in the wake of crises, only to have its budget stripped bare during more stable periods, making it difficult to build the infrastructure needed to support small businesses.
This crisis is no exception. The SBA, one of the smallest federal agencies, was in no way prepared to handle such massive loan programs. Congress partially anticipated this by having the SBA run its Paycheck Protection Program (PPP) through private lenders that had the infrastructure to handle the level of demand for PPP loans. Using private lenders created its own set of problems, including big banks prioritizing their wealthier clients for loans and publicly traded companies with access to capital getting huge PPP loans before genuinely small businesses received a penny.
But PPP is in largely better shape than the SBA’s second COVID-response loan program: the Economic Injury Disaster Loan (EIDL) program. In our latest blog, we argue that EIDLs provide the smallest of businesses with vital support: grants of $10,000 and low-interest loans of up to $2 million. Unlike PPP loans, EIDLs can be used to pay for a variety of expenses, which means they are particularly important for smaller businesses with lower payroll expenses. Yet the program is severely underfunded. Just yesterday, the SBA announced it was no longer taking applications and slashing the amount of money EIDL applicants can receive. Many small businesses who were first to apply still have not received their grants.
In the short run, Congress must appropriate enough funds for all small businesses affected by COVID to have access to EIDL loans and grants. In the medium run, Congress must provide searching oversight of the SBA’s structural weaknesses and figure out a way to rebuild an agency which could be pivotal to fighting back against the overwhelming (and growing) economic power of Big Business.
If you would like to stay up to date with our SBA monitoring and research, follow along on twitter here, or email miranda.litwak@gmail to be added to our regular SBA roundup emails.
Congressional Oversight
We are not the first, nor will be the last, to observe that events over the past couple of months are moving even faster than normal. These days entire months seem to occur within the span of a single week. This week, for instance, it seems that we may have witnessed the Postal Service’s destruction in real time after Trump successfully installed an unqualified, partisan figure to lead its Board of Governors.
In other respects, however, it feels like time isn’t moving at all. Last Week Tonight’s John Oliver dedicated last Sunday’s show to ongoing problems with testing. Revolving Door Project first began shouting about inadequate testing in early March, yet over two months later, here we are. Sure, testing capacity has risen tremendously since our early screeds, but it still is nowhere near where it needs to be and remains among the most pressing problems for the pandemic response.
Sometimes it can feel not like we’re stuck in the near past of February 2020, but in a more distant one of spring 2017. Members of Congress are expressing shock that Trump is not allowing task force members to testify in the House (even as he approves testimony before the Senate), as if he hasn’t been playing this tune since the moment he took office.
Meanwhile, the House left town over a month ago but still has not put in place mechanisms for remote voting or virtual hearings. So, even as the stakes are higher than they have ever been, this administration is even less constrained than normal. And we are left sitting here, like a broken record, bemoaning that Democratic leadership continues to stand in the way of even the most basic governing functions while we add to our growing list of problems that have been left unaddressed (this week our running twitter thread of oversight targets reached 100 items, a remarkably depressing milestone).
Independent Agencies
On Tuesday, we published our nominations update for April. At the time there was, as often is the case, very little to report. With the Senate out, Trump nominated no one to fill the growing tally of vacant and expired seats.
Since the Senate came back into session, however, there has been some movement. Earlier this week, Trump nominated three people to the Federal Retirement Thrift Investment Board (FRTIB) and one to the Defense Nuclear Facilities Board (DNFB). The Senate Rules and Administration Committee also advanced the single pending nomination to the Federal Election Commission (FEC). Now only a full vote from the Senate stands in the way of the FEC’s quorum. Observers of the Merit Systems Protection Board will know that such votes can be a long time coming. Given that the FEC, unlike the MSPB, will likely remain dysfunctional and non-threatening even after having its quorum restored (not to mention that the FEC nominee, Trey Trainor is a Trump loyalist, uninterested in strengthening election law) it seems like that this nomination will move more quickly.
Also this week, the Federal Trade Commission approved the mega-merger between pharmaceutical giants Abbvie and Allergan. Revolving Door Project was quick to highlight the role revolving door attorneys played shepherding the deal through.
Want more?Check out some of the pieces that we have published or contributed research or thoughts to in the last couple of weeks:
Donors pressure Joe Biden to not pick Elizabeth Warren as VP
Well-connected Trump alumni benefit from coronavirus lobbying rush
Paycheck Protection Program replenished, but still plenty of loopholes
Can the US economy recover from coronavirus? | US & Canada (TV appearance)
The SBA's Office of Advocacy: What is it and Why is it Relevant?
April 2020 Update on the State of Independent Federal Agencies
Biden Woos the Left Along With Wall Street, Trying to Avoid a 2016 Repeat
Why is Congress Ignoring EIDL?
Apple Gets a Boot in Joe Biden’s Door
Trump Gives Hill Dems the Middle Finger and There’s Little They Can Do About It