6 minute read 4 Dec 2020
Capitol dome with the US flag

Six key public policy issues for the Biden administration and Congress

Authors
Bridget Neill

EY Americas Vice Chair, Public Policy

Regulatory and policy strategist. Three decades in shaping public policy impacting global financial markets and accounting profession. Passionate about family. Outdoor sports enthusiast.

John D. Hallmark

Ernst & Young LLP Principal, Public Policy, and US Political and Legislative Leader

Public policy professional with a deep understanding of the Washington legislative and political arenas. Works with key stakeholders to formulate and execute on the firm’s policy initiatives.

6 minute read 4 Dec 2020
Related topics Public policy Election

How the Biden administration is likely to drive change on key policy issues.

In brief

  • President-elect Joe Biden will take office on 20 January 2021 facing a global health crisis and worsening economic conditions in the US.
  • Biden is expected to enact change immediately through a series of presidential directives, executive orders and leadership turnover at most federal agencies.
  • Beyond the initial flurry of activity, the pace to enact his administration’s agenda is likely to slow as the administration works with a divided Congress.

From record-breaking voter turnout for both political parties amid a global pandemic to razor-thin margins of victory in several states,1 the 2020 election is one for the history books. We expect the outcome of the 2020 elections will be a Biden administration and divided Congress (with a Democratic-led House and Republican-controlled Senate) in 2021. Assuming this scenario, the pace and scope of legislative change likely will be more moderate and deliberate, with the new administration driving most change through the executive branch.

Following the inauguration, we expect the pace of change to be fast at the beginning with early activity in the form of presidential directives, executive orders and leadership turnover at most federal agencies, launching the Biden administration’s policy agenda.

However, beyond this initial flurry of activity, the pace likely will slow as the due process of regulation, enforcement and supervision takes root and the administration negotiates legislative priorities with Congress. Longer-lasting change may be more difficult to enact; compromises will have to be made, including on some of President-elect Joseph Biden’s priorities.

Key public policy issues for the Biden administration and Congress

When he enters the Oval Office on 20 January 2021, Biden will be faced with two immediate and unprecedented crises — addressing the intensifying COVID-19 pandemic and repairing a US economy that has been severely affected by it. For these issues, and any other initiatives promoted by his administration, Biden must determine whether executive action or working with Congress to pass legislation would best effectuate his goals. Here, we examine how the Biden administration is likely to drive change on six key policy issues, whether through executive actions or by working with Congress.

1. COVID-19-related public health and economic recovery

President-elect Biden’s focus on the COVID-19 pandemic was central to his campaign. Controlling the pandemic and mitigating its accompanying economic fallout are the top priorities for the new administration, and the rest of Biden’s policy and governing agenda will ultimately depend on whether the country can successfully emerge from the health and economic impacts of the virus.

On 9 November, President-elect Biden announced the formation of the transition’s COVID-19 advisory board, a “team of leading public health experts who will advise” and inform his administration’s response.2 President-elect Biden is expected to push swiftly for congressional action on additional stimulus, relief or other response legislation related to the COVID-19 pandemic.

 

2. Environment and sustainability

President-elect Biden believes that climate change is “the number one issue facing humanity”3 and has staked out an ambitious agenda to tackle the problem. Biden’s campaign called for a “clean energy revolution” that would reach a “100% clean energy economy and net-zero emissions no later than 2050.”4 Biden supports the pursuit of new technologies to benefit the environment and create American jobs, improve the nation’s infrastructure and allow the US to export technologies.

Notably, Biden’s campaign also endorsed requiring public companies “to disclose climate risks and the greenhouse gas emissions in their operations and supply chain”5 – a policy goal that could be addressed by either legislation or Securities and Exchange Commission (SEC) rulemaking. The two current Democratic SEC commissioners have expressed strong support for requiring public companies to provide climate-related disclosures.6 However, the most sweeping elements of the Biden plan would require congressional action, which will be difficult with a Republican-controlled Senate.

3. Technology

Big tech has been the subject of growing scrutiny by policymakers and regulators at all levels and from both sides of the aisle, and there is unlikely to be a reprieve under the Biden administration. Biden is expected to focus on greater tech-sector regulation, continue and expand antitrust enforcement, and boost cyber resiliency for US government systems. As he staffs his administration, Biden’s tech agenda is expected to be influenced by Vice President-elect Kamala Harris, who represented prominent tech hubs located in her home state of California and has called for tech-sector regulation that prioritizes consumer data privacy.8

4. US-China relations

The scrutiny of China by Washington policymakers in recent years, especially with the advent of the pandemic, is bipartisan, and the incoming Biden administration is likely to continue a “tough on China” policy. It is possible that President-elect Biden could seek a more multilateral approach to confronting China, but the overall tone and direction of China policy is not expected to change.

Tariffs, nearshoring and strict limitations on outbound and inbound investments, particularly around critical supply chains and technology, will likely continue for the near term. President-elect Biden is expected to assess the effectiveness of the tariffs he will inherit, which could ultimately lead to modifications. We expect continued advancement of policies that focus on US capital market access and investor protection. This includes scrutiny of Chinese companies listed in the US and the financing of US economic activity domestically in addition to the technology and data controls mentioned above.

5. Financial services

While financial services issues are not likely to top the Biden agenda early on, appointments to the Treasury, relevant departments and federal financial regulatory agencies likely will bring a shift in policy and oversight. A reversal of the deregulatory trend promoted under the Trump administration is also expected. Moreover, leaders in the broader Democratic Party have several priorities in the financial services space that are likely to influence the incoming administration agenda. These issues include climate-related risk; environmental, social and corporate governance matters; consumer protection; racial equity and financial inclusion; and executive accountability and conduct.

6. Racial justice

Both parties continue to grapple with the handling of racial justice issues in the wake of sustained demonstrations and protests across the nation, but partisan differences in competing proposals have thwarted action.

The Biden administration is expected to make racial justice and police reform a priority. President-elect Biden’s Build Back Better plan calls for an increase in affordable housing for people of color, public-private investment for minority-owned businesses, infrastructure and clean energy investments in minority communities, funding for management training and higher education opportunities, opportunity zone reform and an increased emphasis on addressing wealth disparities. Biden also has called on Congress to address police reform, supporting the House of Representatives-passed Justice in Policing Act, while pushing for more funding for community policing efforts and mental health assistance.

These public policy issues will present significant opportunities and challenges for the White House and Congress in 2021. How and when policymakers address these issues will leave lasting impacts on consumers, investors, workers, businesses and markets. While President-elect Biden’s agenda and his ability to effectively lead a divided electorate through the current crisis environment will be a significant factor, party control of the Senate, state governments’ responses to COVID-19 and the efforts of the business community will also be important in shaping the contours of the public policy landscape for 2021 and beyond.

Summary

The public policy issues discussed in this article will be the top priority for the Biden administration in 2021. The approach and speed of policymaking activity will be  largely impacted by the administration’s ability to reach compromises with a divided Congress.

About this article

Authors
Bridget Neill

EY Americas Vice Chair, Public Policy

Regulatory and policy strategist. Three decades in shaping public policy impacting global financial markets and accounting profession. Passionate about family. Outdoor sports enthusiast.

John D. Hallmark

Ernst & Young LLP Principal, Public Policy, and US Political and Legislative Leader

Public policy professional with a deep understanding of the Washington legislative and political arenas. Works with key stakeholders to formulate and execute on the firm’s policy initiatives.

Related topics Public policy Election