With the inauguration theme of “America United” still echoing, America’s 46th president, Joseph R. Biden Jr. signed a number of executive orders confirming he will waste no time in addressing the pandemic and its economic fallout. At the same time, his early actions signal that he sees responding to these twin crises as intertwined with broader racial equity and climate change priorities for his administration. His first executive orders address the COVID-19 response and economic relief as well as immigration, reentering the Paris climate agreement, and reinstating federal diversity training.
Beyond executive measures, many are looking to Biden’s track record as an institutionalist and an experienced lawmaker, open to bipartisanship and compromise, to build the momentum needed to drive lasting policy change. The president is entering the White House in an environment that is markedly different from when he became vice president 12 years ago. The question is: will today’s realities push him to act differently?
The business community eagerly awaits clarity on which policies and priorities will prevail now that Democrats control the White House and Congress, but with very narrow majorities in the House and Senate all policy priorities will not become law. The challenge of distinguishing policy priorities from the partisan rhetoric - and anticipating what can realistically get done - remains complicated. Additionally, there are increasing pressures and expectations from consumers, employees and investors that companies and CEOs take public positions on policies affecting immigration, climate change or other goals like reducing inequality.
The narrow Democratic majority means that the votes of individual representatives will become more important than ever. These Congressional members represent a widening diversity of views in both parties. Biden has to balance the interests of progressives and moderates within his own party, while also facing a Republican Party that’s charting its own future following the presidential election loss. Businesses, too, will want to extend their outreach so that more legislators understand their footprints in various states and districts and the impact of policy proposals on their workforces and operations.
In this environment, businesses should recalibrate policy risk, honing the ability to interpret signals to form smart assessments of political risk. It’ll be important to stay attuned to rule-making and changes in leadership at executive branch agencies, commissions, committees and other groups. For example, when it comes to financial services policy, it is still likely that the most change will come from the referees (i.e., regulators). In the healthcare arena, the new administration will likely continue the Centers for Medicare and Medicaid Services’ (CMS) push toward more value-based care and the FDA’s ongoing modernization.
Aside from the catastrophic public health crisis, the starkest reality facing the new administration is the fact that nearly half of the 22 million Americans who lost their jobs at the start of the pandemic are still unemployed. Despite all the uncertainty, one thing is clear: the Biden administration will look to the private sector for creating good jobs that help drive economic recovery.
Our surveys, in the months leading up to the election, have consistently shown business’ support for a more robust federal response to the pandemic and economic stimulus. Now, with the new administration focused on a federal response to the pandemic and a $1.9 trillion COVID-19 stimulus plan on the table, those issues clearly are on the front burner. But bear in mind: this administration is expected to actively look for ways to mark progress on racial equity and environmental goals. Investors and consumers were already advancing the ESG agenda. But, it’s now likely that the push for greater transparency around business practices will also come directly from the new administration.
Political transitions always raise prospects for change for business. This transition will too, even as the current environment has fueled a wave of support for going back to familiar ways of doing things. But, a lot has changed since President Biden last served in the White House. Businesses looking to understand policy shifts should expect some tension as the administration’s approach to the policy-making process adapts. Much has been said about how President Biden’s knowledge of the Senate and his relationships with many of the current Senators increases the likelihood of bipartisan compromise on legislation. It strikes me that such knowledge also means the president is uniquely positioned to know, earlier than most, when such attempts at bipartisanship may be futile.
So, in addition to following the many reports anticipating what Biden’s first 100 days in office can or will accomplish, I will also be sure to pay attention to how the administration pursues those goals. While some of it can be achieved by leveraging the Senate’s budget reconciliation process and the fact that Vice President Harris casts the tie-breaking vote, budget reconciliation has its limitations. Will a bipartisan approach prevail, or will the White House go it alone?
Roslyn (Roz) Brooks is PwC’s US Public Policy Leader, leading the firm’s government, regulatory and public policy strategy for PwC. She is based in Washington, D.C.