A Joe Biden presidency portends a mixed blessing for business. Left on his own, Biden is a business-friendly fiscal moderate who has done the bidding of Delaware corporations for decades. But Biden is anything but alone on this journey. High-profile pressure from the party’s fringe could compel one of the most liberal-leaning agendas ever seen. And that is not good for a recovering economy.
The problem is not that Sens. Bernie Sanders, I-Vt., Elizabeth Warren, D-Mass. and Rep. Alexandria Ocasio-Cortez, D-N.Y., will hijack economic policy. It’s that they will battle Biden at every turn, reminding him of their contribution and complicity in his election.
Along the way, they are bound to score small victories, which taken together could amount to significant change in the rules and regulations affecting key American industries.
Despite the gravitational pull to the left, a divided Congress is a bulwark against such an ill-advised move which works to the Democrats’ detriment. With Republicans very likely to stay in control of the Senate, Democrats now own most of the government, and the “you-break-it, you-buy-it rule” applies to them.
To be sure, Democrats will have to work extra hard to maintain their margin in the House, as the 2022 mid-term and the 2024 presidential elections promise to be contentious. Without the President, the post-Trump GOP needs to find its footing and has a lot to prove to American voters. We can expect that contest to begin whenever Trump exits.
But let’s not get ahead of ourselves.
This year, Wall Street and Silicon Valley bet heavily on Biden. Their support for the ticket had more to do with the predictability of policy than profitability of stock. Investors deplore chaos and inconsistency, which were the twin towers of Trump’s tenure.
So for some, Biden brings a breath of fresh air and sunshine to the markets. For others, the expectation was that Biden would govern based on facts not fear. All of which points to a more open and transparent style of governing, even if it cuts against some corporate interests.
Whatever style and strategy he adopts, success will not come easy. Facing a global pandemic and a sputtering economy, the Biden team has a battle on two fronts with little reinforcement from Republicans.
Here's a look at what the future could hold for a Biden-Harris administration.
A Robust Regulatory Agenda
While Congress will be busy, we should expect considerable action in the regulatory agencies where pressure from the left will advance regulations and taxes that concern businesses and investors.
We should pay close attention to developments at the Federal Trade Commission (FTC); Federal Communications Commission (FCC); Consumer Financial Protection Bureau (CFPB), the Food and Drug Administration (FDA); Environmental Protection Agency (EPA), and the Securities and Exchange Commission (SEC) for starters.
A newly-appointed attorney general is expected to lead the Department of Justice in a different direction on mergers and antitrust.
It is not clear whether Biden will go light on Big Tech, as some expect. On the one hand, he is bound to restore net neutrality, which was gutted under Trump’s FCC. That will be a welcomed gift to Big Tech, which has fought long and hard for the policy.
Big Tech Backlash
On the other hand, with Sen. Warren as the big business bear, it will be hard to resist dramatic – perhaps draconian – pronouncements against Google, Amazon, Facebook or Twitter. But any regulation not requiring transparency in their algorithms, as in Australia, is bound to fall short, even if it entails fines in the billions.
We should expect changes in the tax code and new regulations from the Treasury Department and Internal Revenue Service (IRS). Look for a rollback of the Trump tax cuts for corporations, a raise in the tax on foreign business income, a reinstatement of the itemized state and local tax (SALT) deduction, and a boosting of Dodd-Frank protections.
Of course, the primary focus will be the COVID relief measure whose success will depend on negotiations between Leader McConnell and Speaker Pelosi.
Foreign Relations and International Trade
Foreign relations and international trade are instinctive strong points for Biden and stand to be rebalanced by the Departments of State and Commerce. Biden is expected to review the tough tariffs imposed on China by Trump and leverage that against environmental mandates and climate change – all in the context of global treaties.
A former chairman of the Senate Foreign Relations Committee, Biden will not miss a beat in restoring warm relations with NATO and other allies in a push for multilateral cooperation.
Business Should Go Along, Get Along
There is probably less anxiety on K Street today than in previous presidential transitions because business knows exactly who Joe Biden is, and they do not fear him.
Despite some of the 2020 campaign rhetoric, it does not behoove Biden to alienate American business, which he views as key to his economic agenda for workers and recovery. The fears of radical regulation may be overblown, especially if Biden can resist the rage from the left. He is much more interested in results than retribution.
Savvy business leaders would be well advised to work as closely with Biden as possible. The more public-private partnerships that can be negotiated and implemented in areas such as renewable energy, the environment, consumer financial protection and health care, the softer the blow of regulation will be.
But Biden must send clear and direct signals to Democratic leaders in Congress that he expects them to treat business with prudence and pragmatism.
They need to heed the instincts of pro-business Democrats like Sens. Chris Coons, D-Del., Mark Warner, D-Va., and Ben Cardin, D-Maryland, and Reps G.K. Butterfield, D-N.C., and Steny Hoyer, D-Maryland, who is the Majority Leader, Speaker-in-waiting, and chief arm-twister on important floor votes.
These men can and should be trusted sounding boards on the effects of public policy on business.
Of course, business will have its spats and differences with Biden as with any other administration.
There could be a blowup over the tax proposal or the sweeping stimulus package. There could be some bloodletting over environmental regs or consumer protection. Or there could be a dustup over a decision to bail out one industry over another at a time when COVID has decimated so many sectors.
But that should not be the last word. All indications are that Biden will challenge big business to become better; to live up to higher standards and ideals, and to contribute to society and humanity in a way that it has never done before.
If the social justice movement has had any effect in society – and it has—then it will be manifest in Biden administration policies. And that is something business can surely bet on.
Adonis Hoffman is President of The Advisory Counsel, LLC. He held senior legal and policy positions at the FCC and in the U.S. House of Representatives.