theintercept--2020-11-20--What Can Biden Do Without the Senate?

What Can Biden Do Without the Senate?

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Come 2021, the Democrats are likely to find themselves in control of the presidency and the House but not the Senate — meaning Senate Majority Leader Mitch McConnell will be in a position to block any ambitious legislation from the new administration. But as Trump has shown us, there’s a lot a president can do without Congress. Robert Hockett and Demond Drummer from New Consensus and Dave Dayen from the American Prospect join Ryan Grim to discuss just how much Biden can do on his own.
[Introduction music.]
Ryan Grim: Looking at the lay of the political land, there are plenty of reasons for Democrats to feel down. I’m Ryan Grim, and today on Deconstructed we’ll talk about a bunch of those, but, more importantly, we talk about what Democrats actually can do to help both themselves and the country in the next few years, even in the face of steadfast Republican opposition.
But first, the bad news for the party: Both Jon Ossoff and Raphael Warnock are in tight races in Georgia for the January runoffs, and failing to take the Senate in January would badly hobble a Biden administration’s legislative agenda. A 6-3 Supreme Court is likely to be hostile to executive action and regulation, to say the least. The pandemic is surging and the economy is slowing — and without the ability to legislate, the capacity of the government to respond to the economic slowdown would be in the hands of Mitch McConnell, who has repeatedly shown a willingness to scorch the earth and every norm on it, if it means a slight relative increase in his own power — or the power of the Right.
Meanwhile, Republicans across the country are salivating at the prospect of a gerrymandered 2022 midterm wipeout. Republican leader Kevin McCarthy has already promised the GOP will retake the House, and that would mean two years of investigations into Biden between then and the 2024 presidential election.
Republicans have shown a complete disregard for democracy in the wake of the November 3 elections — or, at minimum, are fine with dispensing with it for partisan gain. Rudy Giuliani on Thursday cited “My Cousin Vinny” while insisting the election was stolen.
Rudy Giuliani: Did you all watch “My Cousin Vinny”? You know, the movie? It’s one of my favorite law movies, because he comes from Brooklyn. And the nice lady that she saw, and then he says to her, “How many fingers do I got up?”
RG: Some Michigan Republicans, meanwhile, have been fighting certification of the election, and Trump celebrated them by bringing them to the White House.
Newscaster: In what would be a longshot move to change the Michigan electors. President Trump has reportedly summoned Michigan Senate Majority Leader Mike Shirkey and House Speaker Lee Chatfield to the White House.
RG: The next time Republicans consolidate power, the onslaught on voting and elections will be fierce. And it’s all happening amid a backdrop of ecological and climate collapse, fueling a rise of ethnonationalism and reactionary politics around the globe, which itself is further fueled by mass migrations precipitated by the crisis. The world is falling apart, and the right’s authoritarianism is an attractive response to a frightened and divided public.
The good news is that we’re not there yet, that Democrats have agency and power if they choose to use it, and that the country still believes in the cultural norms of democracy, which are far more important than laws on paper. The public has decided that Trump has lost the election, so he has to go. Democrats need to harness that belief and push forward.
Even though the stakes of the contest couldn’t possibly be higher, paradoxically, small moves one way or another can be decisive. Both parties can expect at least, say, 47 percent of the vote each election cycle in this sharply divided country — meaning control goes to the party that can win those few extra points through a combination of mobilizing its base, organizing new voters, persuading people to switch, and fighting off efforts to steal an election. And so small wins by Biden on behalf of the public, if they move just a few percent, can have huge ramifications.
And it turns out there are a few things Biden can do unilaterally that would create goodwill, and grow the economy, and drive up wages. And that’s what people vote on.
The most important thing Biden can do is make sure the Federal Reserve will dedicate itself to creating jobs and growing the economy. There are actually indications that Trump’s pick for the Fed, Jerome Powell, has a surprising appetite for aggressive intervention on behalf of regular people struggling in this economy.
Late Thursday, Treasury Secretary Steve Mnuchin announced that he was ending several Fed lending programs, including one aimed at Main Street, and Powell publicly protested — a rare move from a Fed chair. The Fed bucking an administration isn’t necessarily something to encourage, but the aggressive impulse to use all the tools at the Fed’s disposal certainly is.
Chuck Schumer, meanwhile, is urging Biden to forgive the first $50,000 of everyone’s student debt, which he can do by executive order. The average debt load is around $30,000, meaning millions of people would see their debt wiped out. The average monthly payment is around $400, which means that people making that payment would now have an extra $400 every month to spend. That’s a serious economic stimulus, and it’s one that voters would reward Democrats for.
Biden can also direct the Department of Labor to block companies from screwing workers out of overtime, which they do by misclassifying them as managers. Companies like Dollar General are the worst offenders. The people in those stores stocking shelves and working the register are often called managers by the company, which allows them to pay no overtime on top of their low salary. If that practice is ended, millions of people could see increases in their paychecks.
And we’re not talking about a small amount of money. Matthew Cunningham-Cook, an Intercept reporter, has a new story this week about how Georgia Sen. David Perdue, one of the ones who is up for re-election in January, got rich exploiting just that loophole as CEO of Dollar General.
Now, Schumer has also suggested descheduling marijuana, which means that as far as the federal government is concerned, it would no longer be illegal. That would trigger another economic jolt, as pot shops in states where it’s legal would finally have legal access to the banking system and to accountants, creating good paying jobs up and down the industry. At the federal level and in states controlled by Democrats, drug-related records could be expunged, voting rights restored.
None of this might be enough under normal circumstances to fend off the typical wave that strikes an incoming administration during its first midterm. But Democrats might have a Covid-19 ace up their sleeve: If a vaccine does begin to be deployed to frontline workers in December or January, and gradually to the rest of the population throughout 2021, the economy could begin fully opening up in 2022.
The one piece of legislation Republicans have consistently shown themselves unable to resist is a tax cut, which gives Democrats a chance to win some extra stimulus — money for clean energy projects, for instance — and further juice the economy in exchange for dumping a few more piles of cash onto the stacks of the already very rich. And the Senate map in 2022 is actually pretty good for Democrats.
In other words, the Party could have a real tailwind in 2022, but they need to get their damn plane in the air if they’re going to catch it. There’s a lot of ways to do that.
Later on, I’ll talk to Demond Drummer and Bob Hackett of New Consensus, a climate-focused think tank that released a provocative new plan this week, laying out what it thinks a creative Federal Reserve could do to not just boost the economy, but to transform it too.
But first, I’m joined by David Dayen of The American Prospect, who launched a project called “The Day One Agenda,” focusing on what Biden can do immediately.
Dave, welcome to Deconstructed.
David Dayen: Thanks for having me. Triumphant return to The intercept.
RG: Indeed, Dave was a longtime contributor to The Intercept before he abandoned us for his new perch over at the Prospect, which has been doing great work under his tutelage. And I recommend everybody read it as often as they can.
The project that I wanted to have him on to talk about today is called “The Day One Agenda.” This is something that the Prospect has been working on for a while. And it’s called “The Day One Agenda” because it is a list of policies that Joe Biden could enact the first day in office, and Mitch McConnell can’t do a thing about it.
So, Dave, where did this idea come from?
DD: Well, it actually was one of the things that I really wanted to do when I got to the Prospect last summer. During the campaign, there was a lot of sort of angst in the progressive community that even if Democrats won the White House, and at that time, it was even if Bernie Sanders won the White House, that Mitch McConnell would be a roadblock to his ambitions, whether Republicans still held the Senate or whether they had the ability to filibuster in the minority. And so there was a lot of talk about the filibuster, and what’s the point of having a progressive president if they can’t enact any legislation?
And so in a bid to sort of counter that despair, I started looking into these options that have been sort of floating around, are always kind of on the fringes of things that a president can do without legislation. Now, during the Trump era, we’ve heard about all these executive orders; he has taken action in a number of ways, even though the only major piece of legislation that he passed was the Trump tax cuts. But he has been able to transform areas like immigration, and trade, and foreign policy, and healthcare, and environmental policy, through regulatory action and through other implementation of old laws.
In fact, one of the most interesting ones that Trump did is to do the farm bailout, which was an attempt to compensate for his trade war, he used a policy from the New Deal, called the Commodity Credit Corporation to conjure up billions and billions of dollars to give to farmers.
So these examples were out there. And I wanted to sort of push them together and say, “Look, there’s a robust agenda that cuts across a number of different issue areas that any Democratic president could do, just by implementing laws that are already on the books, already passed by Congress, and Mitch McConnell can do nothing about it. So that was the idea behind putting together “The Day One Agenda,” which we did last fall.
RG: And we should remind people that Congress very specifically did not fund his border wall. And yet, as he leaves office, he’s racing to complete vast stretches of border wall. So this is not just a theoretical exercise, there is a wall that has been constructed that Congress never authorized, yet the president had the power to have constructed anyway. And what I find most interesting about “The Day One Agenda” is not just OK, the president can issue executive orders and kind of will these things into being, but the fact that there are actually all of these laws already on the books.
And so when we say that the president can act without Congress, that’s actually not precisely what you’re often talking about, because Congress already has acted. It’s just the presidents haven’t acted — but they could.
DD: Right. Right.
RG: So where are the areas that you see the most promise there?
DD: Absolutely. Yeah. So I mean, you’re absolutely right. If you look at Article II of the Constitution, all it says is that the main function of a president is to take care that the laws are faithfully executed: Congress passes the laws, the president implements them. And we found a number of laws that were available to a president to really make progress.
So one of the biggest ones that’s been talked about a lot now, and picked up by even Senate leadership, is the cancellation of all publicly held student debt, which is about 95 percent of all debt. Under the Higher Education Act, the Education Secretary can use an authority called Compromise and Settlement to essentially settle that debt and cancel any part of it or all of it, if they want to.
And we’re talking about up to $1.5 trillion in debt that can be just wiped away for a generation. And what we know, through the Federal Reserve, the studies and things like that, is that student debt is a huge barrier to people. They essentially get a mortgage coming out of college, it’s a barrier to them doing purchases of homes and cars and durable goods and things like that. And it’s actually a really lead weight on the economy. So this would be a very consequential action.
RG: Right. Let’s, let’s dive into that for one second. Because there have been some economists who have been pushing back on this and saying, “Well, it actually might not have that much of a stimulative effect.”
But what I think those economists seem to forget, is that, like you said, if somebody goes to apply for a car loan, or for a home loan, you have to list what your liabilities are. And you have to have a certain level of income against a certain level of liabilities. And so if you need to take out a $200,000 loan to buy a home, they factor into that what your student debt is, and what your student payment is every month.
So in other words, you’re able to get a smaller loan for a car, a smaller loan for a house, because you already owe the federal government for your education. So you can’t kind of put the car in front of the line. But if you get rid of that, now all of a sudden, you can afford a better house, you can afford a better car. Am I getting anything wrong there? Or what are the economists missing?
DD: No, that’s absolutely right. It’s called the debt-to-income ratio, and it really affects what you’re able to do.
So there’s a huge, sometimes it’s called the wealth effect — if you relieve this burden of debt, suddenly people feel wealthier. They feel like they don’t have this burden hanging over their heads and they can take risks and do more kinds of things, economically. Even if you just look at it on the level of monthly payments that would not have to be given out — which right now Donald Trump, through an executive order, has actually paused those payments, and so, constitutionally, there’s no reason why you can’t just pause them indefinitely. Even if you look at that number, it’s hard to get an exact number, but it’s probably something around $90 billion a year, in terms of what people pay in student debt every year. And if you wipe all that away, $90 billion a year, if you do it the way that Congress talks about, which is the 10-year budget window, that’s well over $1 trillion in that budget window. That’s almost the size of the Trump tax cuts.
RG: Right.
DD: And you can just do that right now! And that’s real money that is not being paid to the government that then people would have free to use in other means.
RG: And Democrats are already starting to worry about a backlash if you did this. So what could Biden do for people who don’t benefit directly from a student lending cancellation?
DD: Right. I mean, I think the good way to look at this is that this is an agenda. This is an agenda for action. So any one piece of it is only that — it’s only a piece.
So, for example, if you’re looking to raise wages, there’s something called high-road contracting. The U.S. is one of the largest sort of contractors in the world; they’re an employer in terms of sending out federal contracts to corporations who then do the work. And, you could, by executive order, say that all federal contractors have to pay a $15-an-hour minimum wage.
About one-quarter of the workforce works for a company that is a federal contractor at some level. And if you put them all on a $15-an-hour minimum wage, that is a huge boost at the low end of the scale. Probably people who didn’t go to college, or have any student debt, who would benefit.
Another good one is drug patents. So the way it works is the federal government issues patents to drug companies, and drug companies have exclusive rights to sell those drugs at any price they want to for a number of years, and what the government can do with something called march-in rights, is if they see that a drug is being sold at an exorbitant rate, they can seize that patent, they can take the patent back, and issue it to generic manufacturers with the proviso that they would sell it at an affordable rate. So this would be a huge spur to lower prescription drug prices.
Obviously, who uses prescription drug prices? The elderly, which have a very low level of student debt, right. So you can fashion this to create tangible benefits across the economy, that would be very broad based. It wouldn’t just be college educated individuals, although I will say that there are pretty credible studies that student debt affects disproportionately Black and Latino individuals, because a lot of that money comes from for-profit colleges and those kinds of universities.
You look at this as an agenda, you can do it in a broad-based way that really would affect everybody in the country.
RG: What about climate change? You said your team identified 277 different policies that could be enacted, and a bunch of those — 54 of them — were in the climate space? What are the big ones that people can push for?
DD: Sure. I mean that 277, by the way, came from reading the Biden-Sanders Unity Task Force. So it wasn’t just pie in the sky, this was things that Biden has agreed to through that task force as priorities for him that he can enact by executive action.
So as you mentioned, 54 of those were around climate and there’s really a panoply of things that you can do, some of which Biden has said he would do, like rejoining the Paris Climate Agreement, or limiting the leasing of oil and gas leases on federal lands. You can do the same thing with limiting fracking leases on federal lands, you can issue new rules around methane and other kinds of gases to cut down on them, you could reinstitute the Clean Power Plan, which is what President Obama instituted to limit pollution at carbon firepower plants. So there are a number of things you can do.
RG: Can he do that quickly? Since it already went through all of the different rule-making and all of the obstacles that it takes for these regulations to actually begin to take effect. Trump then wipes them away. Does Biden have to take another five or six years like Obama did for some of these? Or can he just flick a switch and say, “Look, we already did this one. We’re just putting it back up on the board.”
DD: Yeah, it won’t be overnight, but it can be a lot faster than what Obama did. Because if you look back at the history here on the Obama administration, they were trying to get bipartisan solutions in Congress for years, and only in like the fifth or sixth year of the Obama administration, did he say famously: I have a pen and a phone. And I can do things by executive order.
So at that point, they took the time and created the Clean Power Plan. Now that it’s written, you still have to go through administrative procedure, which is the notice and comment period and various other things. But you don’t have to do all the research to figure out the authorities and the way in which it would be constructed. So that can go I think, much quicker, especially if you’re committed to it on day one. So, you know — does it take a year? It might take a year to get these things through the regulatory process. But you can do it a lot faster than how Obama put it together.
RG: What about on the immigration front? What is the administration able to do that can actually move people not just into protection from deportation status, but move them in line for permanent residency or for citizenship?
DD: Well, we have a story coming out on this, I believe, next week or the week after, so I don’t want to give away absolutely everything. But you can look at this on two levels.
The first level is the reversal of Trump programs, and the administration has committed to at least some of that, including reinstating the DACA program to allow DREAMers who came here as children to stay in the country. So you can certainly do all of that. I mean, most, if not all, of what President Trump put together on immigration, which was a hugely consequential, almost all of that was done under his authority; it wasn’t done through any kind of passage of last or Congress — money was appropriated in that fashion, but the actual policy that was all on Trump. So Biden can obviously reverse that.
But there are things that are a bit more radical, steps that can be taken. One is enabling and facilitating appeals for people who are already deported, which would actually bring them back into the country — almost like a claw-back kind of situation. I think that’s a very big one, we’re gonna have a story on that pretty soon.
But what we’re looking at is going beyond just reversing Trump stuff and going back to the sort of 2016 state of Obama, but even improving that, increasing the quota in terms of legal immigration, adding — changing the discretionary ways in which ICE and these other authorities deport people, reserving that just for criminal charges and things like that. There are a lot of things you can do.
RG: Dave, what about on health care? You had a provocative piece recently about how he could just simply give everybody Medicare. How does that work?
DD: Yeah, absolutely. So during the Affordable Care Act negotiations, Max Baucus, who was the head of the Senate Finance Committee, and the senator from Montana, added this provision that gave all the residents of Libby, Montana, Medicare for free. The residence of Libby, Montana — it’s a small town, about 2500 people — there was a vermiculite mine, run by the W.R. Grace and Company that was basically poisoning the town. It was spewing asbestos into the atmosphere and causing massive rates of mesothelioma and cancer throughout the city. And so this provision was put in to say that all of the health effects from this environmental exposure would be covered under Medicare by the federal government, and there wouldn’t even be any co-pays or anything like that for the citizens of Libby, Montana.
Now, in the legislation in the Affordable Care Act, it said that the Health and Human Services Secretary can authorize other pilot programs around that to cover anyone who’s suffering from an environmental exposure. Well, what do we have right now? We have the coronavirus. We have an environmental hazard in the atmosphere that is affecting millions and millions of people.
There’s certainly, within that statute, the ability for HHS to start a pilot program that says anyone who is exposed to the coronavirus can get Medicare to cover their long-term health needs and what we know and what we’re learning from the science that there are a lot of potential long-term health complications: heart disease, lung disease, mental health disease, from coronavirus. So this would be a way to cover those costs.
Now, in Libby, what they did is they covered the entire town. They said like not just everyone who’s exposed but anyone threatened to be exposed in the future from this asbestos poisoning, we’re going to cover you. If you want to be really aggressive about it, pretty much everyone in the country is at threat of being exposed for coronavirus, so you could kind of do Medicare for all, if you really, really want to under the statute.
Now, do I think Joe Biden’s gonna do that? No. He ran on explicitly against Medicare for all. He’s not going to do it. However, I’d say two things: Number one, he did promise during the campaign that anybody exposed and contracting the coronavirus would get free treatment, and this is a way for him to be able to do that, is to put them on Medicare.
The second thing is: This is just the way that a Biden administration is going to have to think about things. I mean, at best they’re going to have a 50/50 Senate; at worst, Mitch McConnell is going to be in control of it. Legislative action, even in the best-case scenario is going to be pretty remote. They need to be thinking creatively about the laws that already exist, and using them in such a way to make progress for people. If he wants to have a successful presidency, if he wants Democrats to be trusted again, as a party that is doing tangible things for people, then him and his advisors need to be thinking about these kinds of actions.
RG: And what we’ve learned is that it’s hard to take things away from people once they have them. And I’d love to see a Republican Congress or Republican Supreme Court try to take healthcare coverage away from people who went through coronavirus. Like good luck. Good luck.
DD: Yeah. [Laughs.] Absolutely.
RG: And finally, next in the show, we’re gonna have folks from New Consensus on to talk about their plan specifically around what the Federal Reserve could do under aggressive leadership.
Have you taken a look at some of the ideas that they put out? And what do you think a creative Fed could be doing under a Biden administration?
DD: Oh, absolutely. What they’re talking about is sort of using the Fed as kind of a funding engine for projects that we need to move forward.
The thing I’ve been talking about a lot during the pandemic is the ability for the Federal Reserve to help bail out state and local governments. So one of the biggest consequences of the pandemic has been this huge revenue shortfall in the states. We saw this after the financial crisis, where the recession caused this massive austerity in the states, because the states can’t, by and large, spend money they don’t have. They have to balance their budget. And so when that revenue shortfall happens, they have to either raise taxes or cut spending. And this was a huge problem in the financial crisis, it almost offset some of the spending at the federal level, and really stunted the recovery. So we’re walking into that, again, because the federal government has not supplied any fiscal support, in general, for states to cover those revenue shortfalls.
There is a program at the Federal Reserve called the Municipal Liquidity Fund, or MLF, and it’s supposed to give loans to cities and states to be able to keep up with funding. That has been pretty unsuccessful, I believe only two loans have been administered. There’s been a lot of pushing for the Fed to change its terms, and it has changed them a little bit. But it hasn’t gone the way that it actually could go, which would really counteract the possibility for austerity.
And the way it would work is that under Section 14 of the Federal Reserve Act, the Fed can lend short-term, six-month loans to cities and states, but then credibly commit to rolling them over for 20 years, 30 years, 40 years, essentially giving them a line of credit for an indeterminate period. Right now under the current program, the Treasury Department has to give a certain amount of money that to cover any losses that might be incurred, and that gives Treasury a say in what’s going on, which is why the program hasn’t been successful because Steve Mnuchin has basically blocked the ability for the Fed to lend more freely. But under Section 14, you don’t need Treasury’s input. So the Fed on its own could do these long-term or short-term but long rollover of these loans and allow cities and states to fund operations well into the future.
RG: Right. And that’s where it starts to matter to people, because that’s, that’s what funds, firemen, fire safety, that’s what funds teachers, the bus system, the subway. Right. And as you said, during the Great Recession, cities laid off so many people it kind of counteracted the gains being made as a result of the stimulus.
DD: Yeah, that’s right. And the Fed’s mission is to promote full employment, or maximize employment. And there’s nothing bigger on the horizon than massive cutbacks at the state and local level, in terms of employment. All those people that you talked about — firefighters, teachers, police, bus drivers, public employees of any kind — would be the first to go, would be on the chopping block, if nothing is done from the federal level to cover those, those revenue losses that we’ve and are going to continue to see especially if we go into more lockdowns. So the Fed has the opportunity to act here, and certainly a Biden Fed could do so.
RG: Right, and the bottom line here is if we end up blowing up our cities and states, we’ve done so as a choice not as a necessity.
Dave, thanks for this important work of yours. Congrats on the great coverage over at the Prospect. And thank you for joining us here on Deconstructed.
DD: All right, thank you.
[Musical interlude.]
RG: That was Dave Dayen of The American Prospect. I’m joined now by Demond Drummer and Bob Hackett from New Consensus to talk about the Fed and what tools Biden has in his toolbox, no matter what McConnell wants to do about it.
Demond, tell us a little bit about why you dug in on the Fed here?
Demond Drummer: We dug into the Fed because I think it is perhaps the most misunderstood institution in America. Right? It’s a very hot-button institution. And I think this idea that we’ve all experienced in 2020 how the Federal Reserve has been almost like the backstop for functional government and getting dollars out and liquidity into the economy. And I think the assumption is that Fed action only happens in a way that enriches the already wealthy.
And so what then can the Fed do for Main Street, right? And that’s been our driving question here. And so it is well within the president’s power, the president-elect, who has won, right, who has an aspiration and ambition to lead this country forward, who has an aspiration and an ambition to lead the country into the future. Whether or not Democrats can win the Senate, whether or not that happens, President-elect Biden has the potential to really lead the country forward and that is in offering leadership not just to the country in healing, but in working with institutions, not only within his administration but things like the Federal Reserve, working with Fed Chair Jerome Powell, just like the past administration did, to get resources and money into the economy, and to do that in a way that actually can rebuild Main Street and set this country on a path for economic prosperity moving forward into a greener, more sustainable future.
RG: So Bob Hackett, what is the Fed legally allowed to do? What’s in the Fed’s mandate?
Bob Hackett: That’s a great question for one thing, and the answer to it is actually much more interesting than I think most people realize.
So Congress established the Fed over 100 years ago now to function as a kind of, kind of akin to a network of regional development institutions, development finance institutions, and people often get confused about this. They’ll say: the Federal Reserve Bank or the Federal Reserve, nobody seems really fully to understand what it means when we say that it’s the Federal Reserve System with the Federal Reserve Board at the top, and then a sequence of, or a group of, 12 District Federal Reserve Banks scattered across the country.
Those banks, those Federal Reserve banks that are spread across the country, are meant basically to assist with the financing of local startup companies, small businesses, local enterprises, Main Street businesses, even small family farms in some cases. The whole idea was to sort of evenly develop the American economy, which was very unevenly developed and underdeveloped really in 1913.
And that original mandate, I think, is really, in a sense coming back to the fore now after the last several decades of dysfunction. And now of course, in the midst of a pandemic and associated crisis.
RG: So Demond, I’m worried we might be boring people with talk of the Fed. So let’s let’s bring it down to something that they would immediately understand.
You talk about basically these virtual wallets where the Fed could actually just pump money into a bank account that a regular person holds. And I would suspect that people’s ears just perked up a little bit.
How would that work?
Demond Drummer: The idea here is that the Fed, particularly since 2008, right, has been in a self-examination mode, right?
We saw what happened in ’08 where the Fed pumps liquidity into the economy, and a lot of it just gets accrued to shareholders, right? So the question is, what can we do for Main Street in 2020? COVID, recession — historic recession — and we see the same thing happening, but we have the municipal lending instruments, and also the Main Street Lending Program, both of which have seen they’re interesting, they’re novel, they’re innovative, but we see their limits. And so this is an opportunity to continue.
RG: Yeah, and I want people to understand that the Fed is right now doing some innovative stuff.
Demond Drummer: That’s right.
RG: Talking about lending directly to municipalities.
BH: Mhmm. That’s right. The best way to look at this, right, is both of these facilities that Demond mentioned: the Main Street Lending Program, on the one hand, and the Municipal Liquidity Facility, or MLF, on the other hand, were introduced in April. And in effect, this was a real game-changer in the sense that the Fed was for the first time in probably 80, maybe 75 years, sort of recognizing that it really has to be working on behalf of Main Street and small towns and whole country, not just for New York City, and Wall Street.
But the problem that Demond was alluding to, is that the MLF is run entirely out of the New York Fed. And, as you guys know, I used to work there, I love them, they’re very serious people. But five, or 10, or 20 staffers do not understand the liquidity needs of all of the little towns across the country like Billings, Montana or O’ahu.
And similarly, the Main Street Lending Program is run entirely out of the Boston Fed. I’ve worked with those folks as well; they’re just as serious and hardworking and able as the people in New York, but again, the shoestring staff of five or 10 or 15 people, you can’t figure out what the funding or financing needs of Hank’s Tractor Repair in North Dakota or Nancy’s Tire Shop or whatever in Texas are, you are really going to be spreading the administration of these programs across all of the regional Fed banks. That’s why we have them. There’s a Dallas Fed, there’s a San Francisco Fed, there’s a Minneapolis Fed, we’ve got fans all over the country. So they should all be administering these programs, which are inherently local in character.
Demond Drummer: And so I what I love about the concept of the digital wallet is that the reason why the Fed seems to work for the financial sector is because money can get directly to banks — those same systems don’t exist, those same instrumentalities, those same tools don’t exist for small businesses, right? So the idea of digital wallets is really just leaning into this idea that institutions like the U.S. Digital Service are already thinking about: How do we have the structures of our government, including the Federal Reserve, have a direct impact on Main Street, not just Wall Street, right?
And so that’s what this is about. And so I think, with presidential leadership, working with Chair Powell, with the various institutions that the president can influence — can, within the current context of our system, really lead and make sure that absence Senate approval, it is well within the president’s power and ability and authority, and indeed, it’s his mandate politically to do what he needs to do to get our economy going again.
BH: I mean, Demond’s put it perfectly, right? Basically, the Fed functions at the moment as a sort of bank for the banks. And then the hope is that all Americans have their own banks. And so there’s a kind of one-step removal between us and the Fed. What we’re advocating here is cutting out that middleman to the private sector banking institution. And in a sense what the Fed would do is offer digital wallets to all small businesses and citizens and approved residents of the United States in the way that it currently does for banks, right?
I mean, what it offers to the banks right now are Fed accounts. Right? Accounts with the Fed, they’re called reserve accounts. And what we’re saying is that the reserve accounts that are only for banks should be replaced by digital wallets for all citizens, small businesses, and again, legal writ.
Now, the Treasury, in effect could do this already. I don’t know if you guys were to Google, or if your listeners were just to Google something called TreasuryDirect, you would find that you can already open up a digital account with the Treasury right now from which you can buy Treasury securities and into which you can redeem or sell them back. What U.S. Digital Service has said, and Demond just mentioned them, is that they could convert these TreasuryDirect accounts into P2P digital wallets in a matter of weeks, and so everybody could have digital banking basically overnight or within a month. Treasury could do that immediately.
We could then migrate that system over to the Fed as a sort of replacement for the current system of Reserve accounting with the Fed. And then the Fed could do monetary policy directly. It could credit our wallets when it wants to stimulate the economy. It could offer interest on those wallet accounts, meaning it could raise the rates when it wanted to tamp down activity, if inflationary pressures are looming, or it, of course, could lower those rates to stimulate, or to do helicopter drops of the kind that we tried to do this past spring, but kind of failed to do because we didn’t have the infrastructure set up.
RG: Have there been pilot programs that have tried that? Are there people inside the Federal Reserve or the Treasury who were thinking along these lines?
BH: Well, I know that there are at Treasury, because I’ve been talking to a bunch of them and trying to push this idea with them.
The Fed, in a sense, yes and in a sense, no. So I’m working with the New York Fed folk now to develop a digital dollar that would work essentially along these lines. And the Boston Fed is working with some folks over at MIT to do something similar. And then the San Francisco Fed is working with me and some other folk at Stanford, I have a connection there too, to try to do something similarly. The problem is that the Fed board, what they’re focusing on at the moment is something called Fed Now, which is basically just to speed up transaction rates between banks, right, which does nothing, of course, for the 25 percent of Americans who are either unbanked or underbanked.
On the other hand, there are lots of people at the Fed who were very visionary and very devoted to sort of improving things, especially at the regional Fed banks that we were talking about before. So I have every confidence that the Fed would be kind of cutting edge on this as soon as we were told that would be part of the mandate.
RG: Are there central banks doing this elsewhere in the world?
BH: Yes. Yeah, the Riksbank in Sweden has already gone public with a similar plan. They started their pilot back just this past February. It appears to be succeeding quite well, so it looks as though, essentially, the e-krona project is what they call it, it looks as though all Swedes will have something like this — either toward the end of this year, within the next month or so, or very early next year.
China’s working on a sort of similar plan, but it’s a little different with them, of course, because it’s a different mode of governance, you might say. So Sweden is probably the more interesting example for our purposes.
Demond Drummer: And Ryan, if I may, the digital taxpayer wallet is interesting, but I actually think one of the most interesting parts of this plan, another interesting part, is the idea of spread the Fed.
Right now, all of the Main Street Lending operation is being run out of the Boston Fed. I think Bob says it’s 15 people. What this proposal says is to extend that capacity to every regional Federal Reserve Bank throughout the country, and then get that capacity closer to Main Street closer to the people, and make it work for the American people.
BH: Exactly. If your listeners were just to Google “spread the Fed,” they’ll find a million things that we put out under this sort of banner, you might say. And again, I can’t emphasize too highly how this would bring the Fed back into keeping with its original mission.
We all know the name of Carter Glass in connection with the Glass-Steagall Act. What many people don’t know is the Carter Glass was also one of the framers of the Federal Reserve Act back in 1913. And the only way that Carter Glass was willing to accept a central bank in the U.S. is with assurances that it would essentially be a network of regional development finance institutions, and not simply a New York-focused, big bank/Wall Street-focused mega-institution.
Carter glass is probably rolling in his grave now, not only about the end of the Glass-Steagall act, but also about what the Fed has become. But again, as Demond just emphasized the Fed is sort of inching its way back to its original mandate. And kind of one one way of looking at what we’re pushing right now is to say, OK, we now should stop inching back to the original mandate, we should fully restore and even buttress and upgrade that original mandate as a kind of spread the Fed sort of proposal,
RG: And what’s the argument for why the Fed should be playing that role, and not local, community banks? Or even the “too big to fail,” gigantic banks?
BH: Yeah. I mean, they’re a couple of reasons. I think Demond and I probably both have mutually complementary answers to that.
But the problem with the community banks, now, is that we used to have another legal structure in place, essentially, that assured that we had enough community banks. Right? Back until about 20 years, they were very significant what were called interstate banking and branching restrictions, the whole idea was to keep private sector banks very locally focused. All of that stuff fell by the wayside during the Clinton years, in the mid and late 90s.
And so what’s happened now is, of course, we’ve seen immense concentration in the banking industry. As you guys know, the so-called Big Six really dominate the field. So without that, on the one hand, and then without any sort of federal instrumentalities, actively encouraging and fostering community banking across the country, as the Fed, again, was originally meant to do. There’s basically a tendency for everything to kind of concentrate, and that, of course, accentuates the rural-urban divide, and it accentuates the racial wealth gap and the racial financial divide.
You really have to force the distribution in a sense and make a national project of it. We know that from our history, and we’ve always done best when we’ve either made private sector banks be localized, or when we’ve had federal institutions to substitute for those that we’ve also made localized. But right now we’ve got a Fed that’s sort of concentrated in New York, in D.C., and then we’ve got a private sector banking industry that is similarly concentrated in New York City.
So we really have to spread the Fed even as a sort of prerequisite to spreading private sector banks again.
RG: The mission of New Consensus is to transform the economy with an eye towards staving off a climate apocalypse. So how does this all fit into that mission? Can the Biden administration fund a lot of clean energy and climate-related projects through these mechanisms?
Demond Drummer: Absolutely. Again, the idea here is that it’s not just about supporting Main Street and reinvesting in this country, reinvesting in America, but it’s doing that with a national vision and a national strategy in mind, right?
It’s very clear that President-elect Biden wants to lead this country into the future, wants to lead this country to a more sustainable and green economy, and have the country be a global leader in these new technologies, in these new industries that will emerge, clean manufacturing, electric vehicles, all these things that other countries, mind you, that are our competitors, and should be our partners, are already doing, right? So we should be joining at that, at the very least be tracking with these other countries, if not leading.
So this is a strategy to accelerate transitions to these new technologies, supporting the auto industry in accelerating its adoption of production of electric vehicles and spreading that productive capacity around the country. And doing this across every single sector and industry that we need — not to mention, fiber. It’d be great to have better internet capacity, because everybody’s working remotely. And we’ll have to do this probably again, during the next pandemic. So there’s a lot of investment that can be mobilized through this strategy. And Biden can set up the institutions and the direction to get that done.
BH: Yeah, and if I could add something really quick, you guys, to this, I mean, another part of the plan that Demond and I are sort of talking up right now, kind of complements the Fed aspect of it. And it’s right on point with what Demond just said, we have multiple cabinet-level agencies in our National Executive that have jurisdiction over sectors of our economy. They have jurisdiction over particular industries and over particular infrastructures, and, yet, we don’t have any sort of coordination among them when it comes to sort of developing what we might think of as a national development strategy, or a national reconstruction and development strategy.
And so another thing that Mr. Biden could do instantly upon taking office that requires no legislation whatever is to bring basically all of the the heads of the cabinet-level agencies along with the Fed Chair and the Treasury Secretary into one council that we’re calling a National Development Council, and they would be a little bit like the FSOC, the Financial Stability Oversight Council, and also like the Defense Department groups that meet together to kind of carve out a national defense strategy over the long run. What they could do is to coordinate together to develop what we call a national development strategy, so that basically we wouldn’t have departments working across purposes with one another or in an uncoordinated fashion. And so you could basically have a kind of a single overall sort of overview of the economy as a whole, and the various parts of the country as a whole, and sort of figure out what most needs doing in what parts of the country and what industries.
That’s not to say you would be centrally planning everything or sort of doing all sorts of command and control stuff, it’s just to say you would have a kind of orchestra conductor sort of thing going here, where you’d have a kind of coherent vision of the national economy as a whole, where we want it to be moving, and then you could start planning the specific federal investments through the Fed and other federal instrumentalities to jumpstart this stuff and get it going. And you could do it in every congressional district in the country, just as we did during the New Deal, which made the New Deal both, of course, wildly popular on both sides of the aisle, and, of course, just made it more just and more democratic.
RG: Let’s say you could persuade the Biden administration to get behind this agenda. How do you go from there to making sure that the Fed actually carries through. The Fed is, in some respects, is politically independent. Obviously, the concept of political independence itself is nonsense; there’s no such thing as political independence. But how do you get the Fed to start creating these projects, and actually implementing this idea?
Demond Drummer: Yeah. Yeah. So the interesting thing here is that yes, the Fed is independent. But the president is the president, right? And there is tremendous power and coordination that comes with the Department of Treasury working together with the Fed, and setting fiscal and monetary policy in this country. And so this is really just leaning into that natural relationship.
Bob can go into the nuances of this, but at the high level, I think, at a level that I think somebody who’s not an expert can understand is that the Treasury and the Fed work hand-in-hand together. And this plan that we’ve outlined simply says: In working together with the Fed, there is a way for this new administration to lead. And this is leading in a way that is not unprecedented. This is the same way that Hank Paulson, who was Bush’s Secretary of the Treasury, looked into the void in 2008and got creative, and began to socialize a way of moving and got banks on board with it. Right? And they pumped trillions of dollars into the economy.
The same thing happened in 2020. What we’re saying is do that, but make sure it hits Main Street and make sure you’re pumping money into the economy under the auspices of a national strategy so we’re not funding fossil fuel infrastructure. Right? So that we’re not funding the industries of the past, but moving the country into the future. Can we turn this crisis into an opportunity? So that’s how we’re seeing this.
RG: Does Judy Shelton play a role in all of this? For people who aren’t following, Judy Shelton is kind of a nutty gold bugger, who the Trump administration is trying to slip into the Federal Reserve on its way out the door. Would her vote matter to Powell, if Powell decided that he was going to get aggressive? Have you done a head count on the Open Market Committee, on the Board of Governors? Do you think Powell has enough creative people around him that if he could be persuaded to go big that they’d go big with him?
BH: I think so. A couple things: First of all, a lot of Republicans who were previously kind of tepid about Miss Shelton are now coming down against her. And it looks as though the Republicans now don’t even have the votes that they needed to get her confirmed. So this might be moot anyway. But even if it weren’t moot, and she were to get on, she seems to be a kind of opinion changer, or position changer of convenience, right? And so I think when the winds are blowing, when the Biden administration comes in, things are much different, even when it comes to what her druthers are.
But finally, even if that weren’t the case, the board tends to operate by consensus. And in general, when you’ve got the weight of opinion sort of moving in a particular direction, and especially when the chair’s opinion moves in a particular direction, that tends to be the direction that the Fed goes. So I don’t actually think she would turn out to be a problem, ultimately, even if she were to get on.
But as of today, it’s looking very doubtful, or certainly nothing like a slam dunk that she’s gonna be on.
RG: Outside of the Federal Reserve, you also talk a little bit about the Army Corps of Engineers, and some other other ways of — I wouldn’t say bypassing Congress, but doing what the White House can do without Congress. What could the Army Corps do? And what can the Pentagon do that that isn’t being done?
BH: A ton of cool stuff, but I bet Demond is best to start that one off. Because Demond sort of organized a bunch of white papers we did last spring in this connection.
Demond Drummer: Yeah. And so the outgoing administration has shown that there are many ways to allocate already appropriated federal funds, right, to do what the president wants to do. [Laughs.]
RG: [Laughs.]
Demond Drummer: I mean, again, the most basic level, being creative within the confines of the powers and duties of the president, there are many ways to mobilize existing capacities and resources toward a national strategy of America being a leader, right? Not just in the climate fight, but rebuilding the domestic economy.
We’ve seen the, we would say, the half-hearted use of the Defense Production Act by the outgoing administration. There is some money left over. And so this is an emergency, not just Covid, but climate. How do you deploy those same resources against one of many crises already going on? So there’s so many different things to do.
Again, Bob is the details guy, but at a fundamental level, Biden’s job, and the job of the Biden administration is to find the money that’s already appropriated and use every penny of that toward a national vision of prosperity and sustainability in the future.
RG: I guess last question: Have you been in touch with people in the incoming Biden administration? What indication do you have that they’re thinking along these lines?
BH: So I’m in touch with quite a few. I have to admit, I’m quite surprised by how many of them I know.
I was a part of the Bernie Sanders team both in the 2020 cycle and in the 2016 cycle, and so I sort of didn’t anticipate that I would end up being a kind of Biden-ite. But I have to say that Mr. Biden has just turned out to be an enormously impressive statesperson since this past spring.
And there are many manifestations of that, but one of them is teams that he is assembling really appear to be kind half Biden-ite, half Bernie crowd. He seems, in other words, to be trying to work a legitimate synthesis.
RG: Demond, what about you?
Demond Drummer: So we have the feelers out, and we’re putting feelers out. And I think also we’re talking to the base in the public.
We saw the failures of the Paycheck Protection Program and supporting black-owned businesses. And this is a way for Biden to make good on his promise for being creative in repairing the racial wealth gap. Not even repairing the racial wealth gap, but like beginning to close it, the first step in doing that is to make sure that in this pandemic, in this recession, no more Black businesses go under for lack of access to public capital that is intended for them.
So Biden has the mandate and the responsibility to use the full authority granted to them as president of the United States to do right by the folks who elected him in.
RG: Well, Demond Drummer, thank you so much for joining us. Bob Hackett, thank you for being here on Deconstructed.
BH: ’Course, guys, thank you so much. What an honor and what a pleasure.
Demond Drummer: Thank you for having us.
[End credits music.]
RG: That was Demond Drummer and Bob Hackett of New Consensus, and that’s our show.
Deconstructed is a production of First Look Media and The Intercept. Our producer is Zach Young. The show was mixed by Bryan Pugh. Our theme music was composed by Bart Warshaw. Betsy Reed is The Intercept’s editor in chief.
And I’m Ryan Grim, D.C. Bureau Chief of The Intercept. If you’d like to support our work, go to theintercept.com/give — your donation, no matter what the amount, makes a real difference.
If you haven’t already, please subscribe to the show so you can hear it every week. If you’re subscribed already, please do leave us a rating or review. It helps people find the show. And if you want to give us feedback, email us at Podcasts@theintercept.com.
Thanks so much, and see you next week.


theintercept--2020-11-21--A Biden Administration Can Raise Wages and Give Workers More Power — If It Wants To

Biden should be responsive to labor ’ s goal as a matter of simple politics .
Labor unions just spent around $ 180 million in attempts to elect Democrats up and down the ballot .
And with the Democratic Party increasingly focused on suburban professionals rather than its onetime working-class base , unions remain the party ’ s primary outreach operation to people without college degrees .
Tens of thousands of shop stewards across the country worked to convince their often skeptical co-workers that Joe Biden and Kamala Harris were the ticket that was best for working people .
Corporations @ @ @ @ @ @ @ ; it only makes sense for unions to do the same .
Biden will have many opportunities in 2021 to show his words have meaning — even if one or both Democratic senatorial candidates in Georgia lose the upcoming runoff election , leaving Republicans in control of the Senate .
As president , Biden will be able to mandate overtime pay for many more Americans ; force businesses to implement protections from Covid-19 for their workers ; require government contractors to pay a $ 15 minimum wage ; and much more , no @ @ @ @ @ @ @ McConnell , R-Ky. , does .
These possible changes to American working life would together add up to genuine material improvements in people ’ s lives .
President-elect Joe Biden held a virtual meeting on Monday with union leaders and corporate CEOs .
Afterward , Biden declared that he ’ d told the executives “ I ’ m a union guy ” and that in his administration “ unions are going to have increased power.
” That leaves the power of the executive branch – which , while not comparable to that of @ @ @ @ @ @ @ — is still considerable .
However , the PRO Act is now almost certainly off the table .
Even if the best-case scenario for Democrats comes to pass and both Rev .
Raphael Warnock and Jon Ossoff , the party ’ s candidates for Georgia ’ s Senate seats , win the state ’ s January 5 runoff election , 50 members of the Senate will still be Republicans .
In that case , soon-to-be Vice President Kamala Harris will be able to cast the tie-breaking vote to give control of the chamber @ @ @ @ @ @ @ such as West Virginia ’ s Joe Manchin will hold vetoes on labor ’ s ambitions .
“ Right now workers want unions , ” says Celine McNicholas , director of government affairs at the Economic Policy Institute , a liberal D.C. think tank that receives 20 percent of its funding from unions .
“ They ’ re not getting them and that ’ s because the process is so rigged against working people.
” More than anything , the PRO Act would make the American political system responsive to the desires of @ @ @ @ @ @ @ the U.S. workforce belongs to a union , but polls show that half of the remaining 90 percent would like to .
Unions had high hopes on November 3 , when it seemed plausible Democrats would not just win the presidency but also take back the Senate with several seats to spare .
At that point the top priority on labor ’ s agenda was the Protecting to Right to Organize Act , also known as PRO .
The PRO Act passed the House in February with all but seven Democrats voting in @ @ @ @ @ @ @ support it .
The bill is an omnibus expansion of labor rights that would make it easier for workers to join unions , make employers face real consequences for violating labor law , and weaken so-called right-to-work state laws .
If ever enacted , it would constitute the most significant labor victory since labor ’ s great defeat with the passage of the anti-union Taft-Hartley Act in 1947 .
Heidi Shierholz , chief economist at the Department of Labor during the Obama administration and now senior economist and director of policy at EPI @ @ @ @ @ @ @ effects beyond the well-being of workers .
The straightforward fact , Shierholz says , is that “ not having a standard holds back our control of the virus , and that hurts the economy.
” To start with , the Occupational Safety and Health Administration , part of the Labor Department , has the power to immediately issue an “ emergency temporary standard ” setting new safety regulations that businesses must meet to protect their workers from Covid-19 .
This is most badly needed in the meat processing industry , in nursing homes @ @ @ @ @ @ @ dedicated employees have already paid a terrible price and continue to be at great risk .
The Trump administration has refused to issue such a standard , and somehow has been unable to find more than a minuscule number of coronavirus-related health and safety violations even while receiving thousands of complaints .
Biden ’ s Covid-19 plan specifically pledges that OSHA will implement an emergency standard and increase the number of OSHA inspectors .
Then there are wage and safety standards for employees of private corporations working on federal contracts .
In 2014 @ @ @ @ @ @ @ order requiring corporations to pay such employees at least $ 10.10 per hour .
Trump has not rescinded this , and in fact the required minimum wage for federal contract workers will soon rise to a magnificent $ 10.95 .
But Biden advocated a $ 15 minimum wage for all workers during his campaign .
Even if he can ’ t get that passed through Congress , he will have the power to immediately enact it for large numbers of people .
Obama signed another executive order in 2014 titled “ Fair Pay @ @ @ @ @ @ @ at steering federal contract dollars only to corporations with good records on workplace safety , civil rights issues , and labor law .
Trump revoked this order in the first months of his administration .
Biden could reinstate it in the first months of his .
Next , there ’ s overtime .
Under the 1938 Fair Labor Standards Act , employers are required to pay employees time and a half for overtime for any work over 40 hours per week .
The bill ’ s authors understood that corporations would likely try @ @ @ @ @ @ @ this for many regular , nonmanagement employees .
One of the act ’ s attempts to guard against this was to set an “ overtime salary threshold , ” with any workers making less than the threshold being entitled to overtime pay .
Unfortunately , the threshold was not set to rise with prices , and it has only been increased once since 1975 , when it was set at $ 23,660 .
At the time , about 60 percent of full-time workers made less than the threshold , but this number declined @ @ @ @ @ @ @ year , the Obama administration finalized rules that would have increased the threshold to $ 47,476 , and also indexed it to inflation .
It would currently be about $ 51,000 .
But just before the change was set to go into effect in November 2016 , a district judge in Texas blocked it .
The incoming Trump administration did not oppose the decision , though in 2019 the Labor Department proposed raising the threshold to $ 35,308 , with no automatic increases .
An analysis by Shierholz found that , compared to @ @ @ @ @ @ @ do not cover 8.2 million workers , who are missing out on overtime worth $ 1.2 billion a year .
And this is by no means the end of the list .
Trump ’ s National Labor Relations Board has consistently attacked worker rights , making it harder and harder to strike or organize a union .
His Labor Department issued temporary guidance pushing states to deny unemployment benefits to workers who failed to return to jobs due to fears of Covid-19 .
The Labor Department also proposed rule changes that would screw @ @ @ @ @ @ @ per year .
All in all , the Trump administration fulfilled all 10 items on the U.S. Chamber of Commerce 2017 anti-worker wish list .
Changing all of this and more is in Biden ’ s hands .
This is particularly true if he were to appoint Sen. Bernie Sanders , I-Vt. , as his secretary of labor .
Sanders has made no secret of his desire for the job , and passion for using it to leverage real changes in the U.S. workplace .
The truth is , however , that whether @ @ @ @ @ @ @ still an open issue .
What is notable about Obama ’ s use of executive power in this area is that it was not a priority for him .
He did not move immediately , generally leaving action until his second term .
In addition , during Obama ’ s first years in office , he did not try to mobilize support for the Employee Free Choice Act , a bill less ambitious than the PRO Act that nevertheless would have eased union organizing efforts and significantly increased labor power .
From 2007 @ @ @ @ @ @ @ push to pass the EFCA .
Yet Obama — who ’ d pledged in 2007 as a candidate that “ when I ’ m in the White House , I ’ ll put on a comfortable pair of shoes myself , I ’ ll walk on that picket line with you , as president of the United States of America ” — was largely missing in action .
EFCA languished during his presidency , never coming to a vote even when Democrats had large majorities in both houses of Congress in 2009-10 .
@ @ @ @ @ @ @ a pro-labor majority on the National Labor Relations Board by 2013 .
But the meaningfulness of this can be measured by the fact that union density in the U.S. continues to be the lowest it has been since 1936 .
Bill Fletcher Jr. , a former education director of the AFL-CIO , warned before the election that unions could not be complacent , no matter the outcome .
“ Reform needs to be linked to the economy , ” said Fletcher , “ as opposed to 2009 where it was a separate standalone @ @ @ @ @ @ @ as worker power has decreased and the ability of companies to walk over workers has increased , what that has meant in terms of living standards for the average worker.
” Most importantly , Fletcher believes , unions need to be unafraid of crossing the Biden administration in order to make much happen .
“ There can be no idle period for Biden , ” Fletcher said .
“ There can not be a sitting back .
Labor needs to be in his face .
”

President-elect Joe Biden held a virtual meeting on Monday with union leaders and corporate CEOs. Afterward, Biden declared that he’d told the executives “I’m a union guy” and that in his administration “unions are going to have increased power.”
Biden will have many opportunities in 2021 to show his words have meaning — even if one or both Democratic senatorial candidates in Georgia lose the upcoming runoff election, leaving Republicans in control of the Senate. As president, Biden will be able to mandate overtime pay for many more Americans; force businesses to implement protections from Covid-19 for their workers; require government contractors to pay a $15 minimum wage; and much more, no matter what current Senate Majority Leader Mitch McConnell, R-Ky., does. These possible changes to American working life would together add up to genuine material improvements in people’s lives.
Biden should be responsive to labor’s goal as a matter of simple politics. Labor unions just spent around $180 million in attempts to elect Democrats up and down the ballot. And with the Democratic Party increasingly focused on suburban professionals rather than its onetime working-class base, unions remain the party’s primary outreach operation to people without college degrees. Tens of thousands of shop stewards across the country worked to convince their often skeptical co-workers that Joe Biden and Kamala Harris were the ticket that was best for working people. Corporations demand results from the politicians they support; it only makes sense for unions to do the same.
Unions had high hopes on November 3, when it seemed plausible Democrats would not just win the presidency but also take back the Senate with several seats to spare. At that point the top priority on labor’s agenda was the Protecting to Right to Organize Act, also known as PRO. The PRO Act passed the House in February with all but seven Democrats voting in favor, and Biden had pledged to support it. The bill is an omnibus expansion of labor rights that would make it easier for workers to join unions, make employers face real consequences for violating labor law, and weaken so-called right-to-work state laws. If ever enacted, it would constitute the most significant labor victory since labor’s great defeat with the passage of the anti-union Taft-Hartley Act in 1947.
More than anything, the PRO Act would make the American political system responsive to the desires of regular people. Just 10 percent of the U.S. workforce belongs to a union, but polls show that half of the remaining 90 percent would like to.
“Right now workers want unions,” says Celine McNicholas, director of government affairs at the Economic Policy Institute, a liberal D.C. think tank that receives 20 percent of its funding from unions. “They’re not getting them and that’s because the process is so rigged against working people.”
However, the PRO Act is now almost certainly off the table. Even if the best-case scenario for Democrats comes to pass and both Rev. Raphael Warnock and Jon Ossoff, the party’s candidates for Georgia’s Senate seats, win the state’s January 5 runoff election, 50 members of the Senate will still be Republicans. In that case, soon-to-be Vice President Kamala Harris will be able to cast the tie-breaking vote to give control of the chamber to Democrats. But conservative Democratic senators such as West Virginia’s Joe Manchin will hold vetoes on labor’s ambitions.
That leaves the power of the executive branch – which, while not comparable to that of unified control of Congress and the presidency — is still considerable.
To start with, the Occupational Safety and Health Administration, part of the Labor Department, has the power to immediately issue an “emergency temporary standard” setting new safety regulations that businesses must meet to protect their workers from Covid-19. This is most badly needed in the meat processing industry, in nursing homes, and health care facilities, where dedicated employees have already paid a terrible price and continue to be at great risk. The Trump administration has refused to issue such a standard, and somehow has been unable to find more than a minuscule number of coronavirus-related health and safety violations even while receiving thousands of complaints. Biden’s Covid-19 plan specifically pledges that OSHA will implement an emergency standard and increase the number of OSHA inspectors.
Heidi Shierholz, chief economist at the Department of Labor during the Obama administration and now senior economist and director of policy at EPI, points out this will have positive effects beyond the well-being of workers. The straightforward fact, Shierholz says, is that “not having a standard holds back our control of the virus, and that hurts the economy.”
“Not having a standard holds back our control of the virus, and that hurts the economy.”
Then there are wage and safety standards for employees of private corporations working on federal contracts. In 2014, President Barack Obama issued an executive order requiring corporations to pay such employees at least $10.10 per hour. Trump has not rescinded this, and in fact the required minimum wage for federal contract workers will soon rise to a magnificent $10.95. But Biden advocated a $15 minimum wage for all workers during his campaign. Even if he can’t get that passed through Congress, he will have the power to immediately enact it for large numbers of people.
Obama signed another executive order in 2014 titled “Fair Pay and Safe Workplaces.” This was aimed at steering federal contract dollars only to corporations with good records on workplace safety, civil rights issues, and labor law. Trump revoked this order in the first months of his administration. Biden could reinstate it in the first months of his.
Next, there’s overtime. Under the 1938 Fair Labor Standards Act, employers are required to pay employees time and a half for overtime for any work over 40 hours per week. The bill’s authors understood that corporations would likely try various forms of trickery to avoid doing this for many regular, nonmanagement employees. One of the act’s attempts to guard against this was to set an “overtime salary threshold,” with any workers making less than the threshold being entitled to overtime pay.
Unfortunately, the threshold was not set to rise with prices, and it has only been increased once since 1975, when it was set at $23,660. At the time, about 60 percent of full-time workers made less than the threshold, but this number declined to 7 percent by 2016. That year, the Obama administration finalized rules that would have increased the threshold to $47,476, and also indexed it to inflation. It would currently be about $51,000.
But just before the change was set to go into effect in November 2016, a district judge in Texas blocked it. The incoming Trump administration did not oppose the decision, though in 2019 the Labor Department proposed raising the threshold to $35,308, with no automatic increases.
An analysis by Shierholz found that, compared to the Obama proposal, the Trump regulations do not cover 8.2 million workers, who are missing out on overtime worth $1.2 billion a year.
And this is by no means the end of the list. Trump’s National Labor Relations Board has consistently attacked worker rights, making it harder and harder to strike or organize a union. His Labor Department issued temporary guidance pushing states to deny unemployment benefits to workers who failed to return to jobs due to fears of Covid-19. The Labor Department also proposed rule changes that would screw tipped workers out of $700 million per year. All in all, the Trump administration fulfilled all 10 items on the U.S. Chamber of Commerce 2017 anti-worker wish list.
Changing all of this and more is in Biden’s hands. This is particularly true if he were to appoint Sen. Bernie Sanders, I-Vt., as his secretary of labor. Sanders has made no secret of his desire for the job, and passion for using it to leverage real changes in the U.S. workplace.
The truth is, however, that whether Biden will do everything he can is still an open issue. What is notable about Obama’s use of executive power in this area is that it was not a priority for him. He did not move immediately, generally leaving action until his second term.
In addition, during Obama’s first years in office, he did not try to mobilize support for the Employee Free Choice Act, a bill less ambitious than the PRO Act that nevertheless would have eased union organizing efforts and significantly increased labor power. From 2007 to 2010, unions waged an all-out push to pass the EFCA. Yet Obama — who’d pledged in 2007 as a candidate that “when I’m in the White House, I’ll put on a comfortable pair of shoes myself, I’ll walk on that picket line with you, as president of the United States of America” — was largely missing in action. EFCA languished during his presidency, never coming to a vote even when Democrats had large majorities in both houses of Congress in 2009-10.
Via his appointments, Obama did establish a pro-labor majority on the National Labor Relations Board by 2013. But the meaningfulness of this can be measured by the fact that union density in the U.S. continues to be the lowest it has been since 1936.
Bill Fletcher Jr., a former education director of the AFL-CIO, warned before the election that unions could not be complacent, no matter the outcome. “Reform needs to be linked to the economy,” said Fletcher, “as opposed to 2009 where it was a separate standalone issue. Labor needs to show that as worker power has decreased and the ability of companies to walk over workers has increased, what that has meant in terms of living standards for the average worker.”
Most importantly, Fletcher believes, unions need to be unafraid of crossing the Biden administration in order to make much happen. “There can be no idle period for Biden,” Fletcher said. “There cannot be a sitting back. Labor needs to be in his face.”