View from the Beltway

View from the Beltway Joe Biden: What Kind of President? By Owen Ullmann Democratic centrist or left-wing captive? s the 2020 presidential number of seats in the House or cap- likely would retain tariffs imposed election enters its final ture control of the Senate from the on Chinese goods. His selection of stretch, the prospect of Republicans, who will be able to California Senator Kamala Harris, a Joe Biden victory is block a left-wing legislative agenda. a former presidential rival, as his growing, and that rais- However, if Biden wins in a landslide running-mate underscores his desire Aes the question of how he would gov- that results in big gains in the House to run as a mainstream Democrat. ern. Biden has promised to unify the and a Democratic-controlled Senate, “The likelihood of the left pulling country by trying to pursue a biparti- the party will have the levers of power him to their position on any issue is san consensus on many issues, yet the to enact sweeping changes in health small,” agrees Robert Shapiro, chair- stark polarization that has gripped the care, the environment, taxes, trade, man of the consulting firm Sonecon nation makes such an approach aw- and federal spending. LLC and a senior economic adviser fully difficult to achieve. At the same time, such an electoral to past Democratic presidential can- So the question is: Will a President mandate would allow Biden to claim didates. “He beat the left but mainly, Biden stick to the largely Democratic that voters elected him because he is the left is a real minority in the party. center that has marked his long po- a mainstream Democrat who won’t Having said that, Biden and the left litical career and fulfill his pledge to be beholden to the Bernie Sanders agree on a number of goals, includ- reach out to Republicans, or will he and Alexandria Ocasio-Cortez wing ing universal healthcare coverage, be pulled to the left by a powerful of the party. And while he supports relieving student debt, and taking ur- and vocal alliance of party activists many programs opposed by conser- gent steps to reduce greenhouse gas who will clamor for such policies as vatives and the business community, emissions.” Medicare for All, a Green New Deal, such as an increase in corporate and “Their only leverage would be and police defunding from his first capital gains taxes, he has stood firm to refuse to support his proposals,” days in office? throughout the campaign against the adds Shapiro. “So I don’t see the If Biden ousts President Trump more radical proposals pushed by in a close contest, the Democrats will the left. He’s even adopted Trump’s Owen Ullmann is TIE’s executive be less likely to pick up a significant hardline stance toward China and editor. 6 THE INTERNATIONAL ECONOMY SUMMER 2020 THE MAGAZINE OF INTERNATIONAL ECONOMIC POLICY 220 I Street, N.E., Suite 200 View from the Beltway Washington, D.C. 20002 Phone: 202-861-0791 • Fax: 202-861-0790 www.international-economy.com [email protected] ideological makeup of the party pull- Senator Elizabeth Warren proposed ing him left, although the party’s cen- “The likelihood of the during the primary campaign. ter is more to the left than it was in left pulling him to their 1996 or 2012, and is where Clinton Climate change spending. Biden and Obama would be now, as well.” position on any issue has pledged to “invest” $2 trillion If that’s the case, here is a run- during his term to combat climate down on where a President Biden is small.”—Robert change. His proposal includes funds is likely to stand on key economic Shapiro, senior economic for rebuilding roads, bridges, water policies. systems, and electricity grids, as well adviser to Democratic as money for universal broadband. Taxes. Based on his campaign web- The program includes support for the site, Biden would reverse much of the presidential candidates. auto industry to convert to electric Republican tax cuts passed in 2017. vehicle fleets, public transportation He would raise the corporate tax rate called the plan “highly progressive,” options for every city of 100,000 or from 21 to 28 percent, require mini- saying it would increase taxes for the more, and financing for the construc- mum corporate taxes, return the top top 1 percent of earners by 13 to 18 tion or upgrading of millions of com- individual rate from 37 to 39.6 per- percent of after-tax income, while in- mercial and residential buildings to be cent, tax capital gains as ordinary in- directly increasing taxes for most oth- energy-efficient. come for those earning more than $1 er groups by a mere 0.2 to 0.6 percent. While ambitious, the proposal is million, and impose Social Security As a result, it “would moderately slow far more modest than party progres- payroll taxes on wages above the pace of economic growth and pos- sives’ “Green New Deal,” which aims $400,000. sibly labor supply by discouraging to achieve 100 percent clean energy The non-partisan Committee for a work and capital accumulation,” the for the country in future decades. The Responsible Federal Budget analyzed group concluded. cost of this ambitious program is un- his tax plan on July 30 and conclud- What is not included in his tax clear, but it likely amounts to tens of ed that it would raise $3.35 trillion package is a controversial “wealth tax” trillions of dollars and severe disrup- to $3.67 trillion over a decade if ful- on the financial assets of the super-rich, tion for carbon producers and those ly enacted in 2021. The committee which Sanders and Massachusetts dependent on them. Joe’s “Corporate Globalists” ot everyone thinks Joe Biden has made Na true conversion on trade. Robert Kuttner, writing in the left-leaning American Prospect in May, noted that several strong “corporate globalists” remain as influen- tial Biden advisers who may Steven Ricchetti, Former U.S. Jennifer Hillman, wind up with top jobs in a former Chief of Staff to Trade Representative former General Counsel, Democratic administration. Vice President Biden Michael Froman Office of the U.S. Trade —O. Ullmann Representative SUMMER 2020 THE INTERNATIONAL ECONOMY 7 View from the Beltway Industrial policy. This is wrapped As vice president, however, he called for a “pro-American Worker in a plan that Biden calls his “Made was a big supporter of the Dodd- Tax and Trade Strategy to … give in All of America” policy. It calls Frank regulations that banks con- our manufacturers and workers the for investment in manufacturing and sider over-burdensome, and he has fair shot they need to compete for technology—in addition to the funds indicated as a presidential candidate jobs and market share.” pledged for the auto companies— that he wants to see more regulation Given Biden’s current views, the and boosts workers’ rights to orga- of tech giants, such as Facebook, high U.S. unemployment rate, and nize unions and avoid the lost bene- Google, and Amazon. bipartisan antipathy toward China, fits that come from being labeled as Several tech company officials “I am not optimistic about another “independent contractors.” who have been brought in to advise significant multilateral trade agree- Clearly aimed at winning back his campaign may try to temper his ment,” says Shapiro. “It is very dif- blue-collar workers who voted for desire for tech regulation, but if he ficult today given the economic envi- Trump in 2016, the plan includes were to give Warren a top job in a ronment. The political costs of trade Biden administration, say attorney agreements have gone up.” Biden’s “Buy America” general, look for a tough stance in sup- Mary Lovely, a senior fellow at port of investigations into anti-trust the Peterson Institute and econom- program reveals a and racial or gender bias, as well as ics professor at Syracuse University, close oversight of business practices. contends that Biden’s “Buy America” transformation of Harris’ experience as a tough pros- program reveals a transformation of a free trader into ecutor when she was California’s a free trader into a trade skeptic. attorney general also points to an ad- “The ‘Buy America’ piece of his a trade skeptic. ministration that would keep a wary trade policy seems wrong-headed,” eye on Corporate America. she says. “We want to support $400 billion for government pro- Biden also favors more than dou- American jobs of what type? Sewing curement of American products, ma- bling the federal minimum wage to uniforms? Do you create monop- terials, and services, investments in $15 an hour, a move that would have olies? Do you buy from a sole sup- small manufacturers owned by wom- a big impact on businesses, particu- plier? Are these jobs we want to en- en and minorities, and $300 billion larly small ones that operate on slim courage and pay monopoly rents for? in research and development funding margins. And what is an American company: for technological advances in indus- tries ranging from electric vehicles Trade and China. As a senator Biden would reverse to artificial intelligence. In addition, and vice president, Biden was a the plan calls for a strategy to ensure long-time free trader. He voted for much of the Republican that critical supplies needed during a NAFTA, supported permanent nor- crisis, such as the Covid-19 pandem- mal trade with China, and backed tax cuts passed in 2017. ic, are produced domestically, so the Obama’s twelve-nation Trans- country is not dependent on China Pacific Partnership.

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