March Issues Preview
President Joe Biden’s cabinet picks are slowly working their way through the Senate, which will enable a major power shift in the executive branch as the president’s nominees take control of agencies across the federal government.
For this month’s CEO Report, our POLITICO policy teams took a deep dive into what exactly the new agency agendas looks like as we pass the halfway mark into the first 100 days of the Biden presidency:
— Reversing the pandemic’s effects has already begun. Leadership positions at agencies are still widely vacant, but top political appointees across the government have emphasized pandemic-related issues as the first order of business, especially at HHS and the Education Department.
— Climate change is a government-wide strategy. Janet Yellen at the Treasury, Tom Vilsack at USDA and Pete Buttigieg at Transportation are among the many officials ready to launch initiatives in line with Biden’s agenda on climate change. Rep. Deb Haaland, once confirmed, also plans to make climate policy a priority.
— Immigration overhaul is next. Officials are still looking for places to further Biden’s agenda, looking to the Department Homeland Security for policy changes, but immigration is still exceedingly sticky politically.
Welcome to the March edition of the CEO Report, POLITICO Pro’s high-level outlook on the policy issues driving the month … and beyond.
Pandemic response, racial equity and climate change in focus: Secretary Tom Vilsack, confirmed by the Senate and sworn in at the end of February, is positioning the Agriculture Department to ramp up its pandemic response and launch new initiatives in line with Biden’s agenda.
The USDA has spent the initial weeks of the Biden administration reviewing programs and regulations started by the Trump administration. So far, it has decided to extend until April the Farmers to Families Food Box program for hungry Americans. Now that Vilsack is in place, the department is expected to make certain changes that could translate to how money is distributed among farmers and families in need of food assistance. Vilsack has also promised to deal with systemic discrimination at the department that has resulted in many Black farmers being shut out of USDA programs.
Vilsack indicated to reporters on his first day that addressing climate change will be an early order of business, but declined to provide details on the department’s approach. He suggested that any new USDA proposals could be an experiment for longer term projects to be included in the next farm bill, which needs to be reauthorized in 2023.
Before Vilsack was in place, Congress gave additional aid to address effects of the pandemic on the food and agriculture sector, including Supplemental Nutrition Assistance Program benefits. USDA also issued policies to extend an eviction moratorium on housing supported by agency funding, suspend debt collection and foreclosures for producers, and expand benefits for families with children who received food aid money through a program called Pandemic EBT.— Liz Crampton
Raimondo, Tai to play major roles in rebuliding the economy: The Senate is slated to vote early this week on the nomination of Rhode Island Gov. Gina Raimondo as the next Commerce secretary. She’s expected to win approval without issue. Raimondo has yet to lay out specific policy objectives, but she plans to play a key role in rebuilding the economy and combating climate change — two pillars of the president’s agenda.
She will also help to shape Biden’s economic and national security response to China, particularly implementing export controls on sensitive technology and other products. The biggest snag during Raimondo’s confirmation process came when she would not commit to keeping Chinese telecom giant Huawei on a Commerce Department black list.
Raimondo is likely to soon be enmeshed in trade battles with Beijing alongside Katherine Tai, Biden’s choice to lead the Office of the U.S. Trade Representative. Tai sat before the Senate Finance Committee for her nomination hearing Feb. 25, during which members of both parties offered endless praise for her experience bringing trade disputes against China and her role negotiating the U.S.-Mexico-Canada Agreement.
Tai pledged to be tough on China and collaborate with foreign allies, but ultimately to keep U.S. workers top of mind in future trade talks. The Biden administration has said hammering out new trade deals is not a priority, but Tai told lawmakers she does not expect “to be put on the back burner.” — Stephen Overly
HHS makes early moves on Obamacare, Medicaid: Even with top positions still open at the Department of Health and Human Services and FDA, the departments are still making moves to expand health coverage and unwind some Trump administration policies.
At the forefront is a reopening of Obamacare markets for a special three-month enrollment period, accompanied by a $50 million outreach campaign. The move could help an estimated 9 million people get free or subsidized coverage, and millions more could purchase it without financial assistance. The number of actual sign-ups still hinges on the fate of Biden's stimulus package pending in Congress: It would expand ACA subsidies and changes how they are calculated to make coverage more affordable for more people. It would be the first significant expansion of the law since it was passed in 2010.
The department has also begun unraveling Medicaid work requirements, telling states that conditioning aid on employment does “not promote the objectives of the Medicaid program.” The Centers for Medicare and Medicaid Services pointed to the pandemic as reason for dismantling the policy, saying it risked causing a “substantial” loss of coverage. That's sparked backlash from some red states that sought to overhaul their programs with the Trump administration’s encouragement. The administration separately asked the Supreme Court to scrap a March hearing on the work rules.
The top ranks of the department should now gradually fill out in the coming weeks. HHS Secretary-designate Xavier Becerra had a fairly smooth ride through a pair of Senate confirmation hearings Feb. 23 and 24 and is likely to be confirmed. Next up in the pipeline for confirmation votes are Rachel Levine for assistant health secretary, Vivek Murthy for surgeon general and Chiquita Brooks-LaSure for CMS administrator.
The biggest unknown may be who will lead the FDA as it continues to oversee the development of new Covid vaccines and treatments and handles myriad other regulatory functions. Acting Commissioner Janet Woodcock has strong support within the biomedical research community but also drawn some criticism for her involvement with the agency's oversight of opioids and certain past regulatory decisions. — Adriel Bettelheim
BUDGET AND APPROPRIATIONS
OMB in dissarry: The Biden administration is building an army of progressive budget geeks to run OMB, installing a handful of top liberal aides to remake an agency where civil servants were stripped of authority and worker protections while the Trump administration pushed a legally dubious agenda. But there are limits to the budget office’s effectiveness without a Senate-confirmed chief, and Democratic leaders still have no path to advancing Neera Tanden’s nomination after Sen. Joe Manchin (D-W.V.) said he would vote against her confirmation.
White House press secretary Jen Psaki said last week that the administration doesn’t have a target date for the release of its fiscal 2022 budget request, adding that, “the lack of a confirmed head of OMB certainly doesn't help to expedite the process.”
The budget office will also be charged with executing much of Biden’s plan to stem the spread of the coronavirus and bolster the economy under the $1.9 trillion stimulus plan, H.R. 1319 (117) , Democrats in Congress aim to clear by mid-month.
While Tanden’s nomination is on hold, Senate Democrats are proceeding with the confirmation process for Shalanda Young, the president’s nominee to be deputy director of OMB and a longtime congressional aide who is well-liked among lawmakers from both parties. Although the White House has sidestepped questions about the possibility of withdrawing Tanden’s name and instead nominating Young for the director role, Sen. Richard Shelby (R-Ala.) said last week that he would support Young’s confirmation if Biden were to elevate his pick. — Jennifer Scholtes
Cardona inherits school reopening mess: Miguel Cardona took the helm at the Education Department after a relatively smooth and bipartisan confirmation process — but now he’ll confront an education system in disarray from the pandemic. Cardona and the White House have said his No. 1 task will be trying to reopen the nation’s schools and working toward Biden’s goal of having in-person instruction at a majority of K-8 schools by the end of April.
Cardona won’t control whether schools reopen or remain closed, but expect him to use the bully pulpit to help amplify public health guidance from the administration’s health experts. He’ll also be responsible for doling out hundreds of billions of dollars of coronavirus relief funds passed by Congress for states, schools and colleges.
Testing decisions await: Cardona will also have to decide how much leeway to give states as they conduct federally-mandated standardized testing this year. The Biden administration has vowed to keep the requirement but offer flexible options for states to administer the tests — and how the results are used to judge the performance of schools.
On higher education, Cardona steps into a raging debate among Democrats over whether his agency should wipe out large swaths of outstanding federal student loan debt through executive action. The Biden administration has punted on the issue so far — announcing a forthcoming legal review of whether it has the power to cancel debt on its own and inviting Congress to pass legislation. But Cardona will likely be pressed to take a position on the issue, as he takes control of the nation’s $1.5 trillion portfolio of student debt.
New rulemaking: Cardona will also be responsible for carrying out Biden’s campaign promises to reverse many of former Education Secretary Betsy DeVos’ policies, including scrapping her Title IX rules and reinstating tougher rules on for-profit colleges. The Biden administration is also expected to issue new guidance on the federal civil rights of transgender students in schools. — Michael Stratford
FINANCE AND TAX
Yellen takes on climate: Treasury Secretary Janet Yellen has spent most of the early days of her tenure focused on getting the president’s $1.9 trillion relief package over the finish line, coordinating with foreign officials on efforts to contain the damage from the pandemic, and meeting with local officials, activists and business groups on the administration’s agenda. High on the priority list for the next few months: climate change. Yellen says she plans to start a new Treasury “hub” that would examine financial system risks arising from global warming , and she has indicated that her department is interested in helping regulators develop stress tests to examine the climate-related risks faced by financial institutions.
On the tax front, Yellen has assured her counterparts abroad that the U.S. will “re-engage” in discussions over revamping the international tax system, particularly as it pertains to taxing tech giants that may have little physical presence in countries where they make significant amounts of money. Former President Donald Trump’s treasury secretary, Steven Mnuchin, pulled back from the talks last year amid several disagreements.
Yellen is also likely to play a major role if Biden pushes legislation to boost domestic taxes on corporations and wealthy individuals, as he promised to do during the presidential campaign. That effort has been on hold given the state of the coronavirus-battered economy.
Small business rescue: Biden is wasting little time overhauling economic relief efforts run by the Small Business Administration. Even as his pick to lead the agency, Isabel Guzman, awaits Senate confirmation, the SBA implemented several changes to its Paycheck Protection Program. Still, the administration was facing complaints that minorities and other potential borrowers are being overlooked. So, the Biden team made PPP loans available exclusively to the smallest businesses for two weeks and made sole proprietors eligible for more funds. The big question now is whether Biden will agree to extend the popular program beyond its March expiration date.
Fudge's two big tasks: Once Marcia Fudge is confirmed as HUD secretary, her top priority will be restoring two Obama-era fair housing rules rolled back by the Trump administration. One would require local governments to actively track and address patterns of segregation or else lose federal housing funds. The incoming administration also wants to restore HUD’s 2013 disparate impact rule, which holds governments and businesses accountable for policies with unintentional discriminatory effects. A federal judge in October issued a preliminary injunction to stop the agency from implementing the Trump administration’s new version of the rule, which would have required plaintiffs to meet a higher threshold to prove unintentional discrimination and given defendants more leeway to rebut the claims.
SEC awaits new boss: The administration will focus in March on the nomination of Gary Gensler to lead the Securities and Exchange Commission . Gensler, whose confirmation hearing will be on March 2 before the Senate Banking Committee, will arrive at the agency at a time when it’s under heightened scrutiny, most recently because of the trading frenzy in GameStop and other stocks discussed on the Reddit website. He will also face key decisions on how far to press companies to disclose more about their impact on climate change. — Mark McQuillan
EPA, interior nominees poised to move: Michael Regan should finally be confirmed as EPA administrator early this month, but the slow process is more due to the Senate’s sluggish pace than any serious opposition.
After North Carolina Republican Sens. Richard Burr and Thom Tillis showed up to introduce him at his February confirmation hearing, most Republicans on the Senate Environment and Public Works Committee admitted to liking Regan personally — even as they loathe Biden’s environmental agenda. Ultimately, the panel’s ranking member, Sen. Shelley Moore Capito (R-W.Va.), and five more EPW Republicans voted against him as a proxy vote against Biden’s agenda and the Green New Deal. But Regan won four GOP members, indicating he will have sufficient support to clear the Senate, though likely not with blockbuster numbers.
Meanwhile, the committee has scheduled a hearing for his deputy nominee, former EPA air chief Janet McCabe, for March 3.
And Rep. Deb Haaland appears likely to win approval from the Senate Energy committee to have her nomination as Interior Secretary reach the full chamber. Haaland, a progressive New Mexico Democrat, dialed back some of her outspoken criticism of fossil fuels and told senators at her hearing she recognized the importance of the industry for jobs and revenues it supplied to state coffers. But she also offered full support to Biden’s plans to speed along development of renewable energy and conservation of U.S. land.
Republicans — several of whom had already warned they would vote against her nomination — failed to land any serious damage to her prospects. Sen. Joe Manchin, a key Democratic swing vote, in the end voiced his support for Haaland, all but guaranteeing enough votes for her approval to become the first Native American Cabinet member in U.S. history. — Alex Guillen and Ben Lefebvre
Waiting on Walsh at labor: Boston Mayor Marty Walsh is still awaiting a full Senate vote on his nomination to be Secretary of Labor. The former head of a building trades union federation, Walsh drew bipartisan praise during his nomination hearing last month , suggesting he will likely be confirmed when his nomination reaches the floor.
Biden has vowed to step up the federal government’s policing of workplace safety during the pandemic, and Walsh has said one of the “first top priorities” at the department would be addressing that issue. While Walsh declined to explicitly endorse issuing mandatory coronavirus workplace safety standards — as unions, Biden and congressional Democrats have called for — during his nomination hearing, he said they should not be seen as “terrible” for businesses.
At the end of January the Occupational Safety and Health Administration, currently being led by Principal Deputy Assistant Secretary Jim Frederick, strengthened its guidance for employers on how to protect workers from the coronavirus.
Frederick is facing a March 15 deadline to decide whether OSHA should issue an emergency coronavirus workplace safety standard. One of Biden’s early executive orders directed the agency to decide by mid-March whether it was necessary for OSHA to mandate safety precautions employers must take to limit exposure and, if so, to issue an emergency temporary standard.
So far, there hasn’t been any sign of whether OSHA will issue a safety rule or simply release more non-mandatory safety recommendations for workplaces, although Frederick has said that the January guidance was “not going to be the last step in the process” of responding to Biden’s order. At the end of February, two top Republicans on the House Education and Labor committee sent a letter to Acting Secretary of Labor Al Stewart pressing him on the status of the emergency temporary standard, concerned that the business community wouldn’t have the opportunity to weigh in. — Rebecca Rainey
Reversing Trump's immigration policies: Homeland Security Secretary Alejandro Mayorkas was tasked by Biden last month to conduct several reviews of agency policy and issue recommendations on how to overhaul the existing immigration system and create a “fair and humane” one.
Mayorkas is crafting new enforcement guidance for how U.S. Immigration and Customs Enforcement agents will handle migrant arrests, detentions and deportations; he has until mid-May to issue them. In the meantime, temporary guidance has been issued that requires ICE to focus on undocumented immigrants who pose a national security, border security or public safety risk — a major shift away from the Trump administration’s more aggressive enforcement approach.
In addition, a Trump-era ban on issuing work visas amid the pandemic is set to expire at the end of March. Biden has not weighed in on whether he will extend the ban or end it earlier.
The Biden administration is slowly scaling up a program it launched last month to begin allowing migrants into the U.S. who, because of a Trump-era policy, have been forced to remain in Mexico while their asylum cases are processed. There are an estimated 25,000 migrants to be brought in, so it won’t be a quick process.
On Capitol Hill: The House could vote on immigration legislation next week, House Majority Leader Steny Hoyer recently said. Democrats, namely members of the Congressional Hispanic Caucus, are pushing to ensure the House moves immigration reform legislation before April 1. However, getting any immigration-related bill through the Senate will be a challenge. And Democrats and immigrant advocates are currently pushing for Biden’s sweeping immigration reform bill, while recognizing that a piecemeal approach of passing smaller bills is much more realistic. — Sabrina Rodriguez
Equity and climate change tops DOT agenda: So far, action at the Transportation Department has been focused on Secretary Pete Buttigieg and his impressive amount of TV appearances, where he's been more often a generic surrogate for Biden than a transportation talking head. But, the agency he heads has already made an early mark with a focus on equity and combating climate change, two pieces of policy that Biden has made cornerstones of his administration. Buttigieg mentions equity in particular in virtually every appearance or press release, but most significantly so far, DOT has also modified some of its early grant rounds to elevate both equity and climate change in the funding decisions it plans to make.
Also, significantly, Biden's early picks for the National Highway Traffic Safety Administration, which is in charge of driving down traffic deaths and fatalities as well as helping craft fuel economy standards for vehicles, have a long green resume. The picks were broadly seen as a purposeful attempt to elevate the agency's role in climate change in vehicles. — Kathryn A. Wolfe
Top officials likely to be marijuana industry allies: The key cabinet officials overseeing cannabis policy are likely to prove much more open to protecting the quasi-legal industry than their counterparts in the Trump administration. Attorney general nominee Merrick Garland will have the most direct role to play in determining federal cannabis policy. During his confirmation hearing before the Senate Judiciary Committee, Garland indicated that he didn’t think it would be a wise use of federal resources to crack down on state-legal marijuana markets, suggesting the Justice Department may reinstate something akin to the Cole Memo. That document was rescinded by the Trump administration, but there was no ensuing crackdown on state-legal markets.
The other key official will be Becerra, an unabashed champion of California’s marijuana industry during his tenure as the state’s attorney general. Becerra has pushed for loosening federal restriction on banking and criticized the Trump administration’s decision to rescind the Cole Memo. While Becerra will have little direct authority over federal cannabis policy as HHS secretary, he could petition the attorney general to change the classification of marijuana under the Controlled Substances Act. Currently, it’s treated as a Schedule I narcotic along with heroin and LSD. — Paul Demko
Pentagon sprints to prepare its next budget: With just two months to go before the Defense Department submits its fiscal 2022 budget proposal to Congress, the Pentagon is avoiding an exhaustive review of the document and is instead focusing on big-ticket programs — ships, aircraft, nuclear weapons — to decide if their priorities match those of the new administration. No one is forecasting major cuts, but budgets are expected to be flat, and officials know they need to make trade-offs between older weapons and newer technology.
Nominations for top positions have been slow to ramp up. Only two of the department’s top officials have been confirmed and its would-be policy chief is awaiting his confirmation hearing. But expect those nominations to ramp up as soon as the Pentagon looks to install service secretaries and other top jobs.
The department, meanwhile, is mainly in a policy holding pattern as it kicks off a series of reviews, including a look at the National Defense Strategy, global troop presence, extremism in the ranks and shipbuilding. — David Brown
State department trips off to a start: Secretary of State Antony Blinken has spent his first few weeks in office declaring that the United States is “back,” ready to strengthen frayed ties with its allies, and willing to tell hard truths to its adversaries. In the coming month, he will have more opportunities to show what that means.
Last week, Blinken engaged in virtual “trips” to Canada and Mexico. In March, he’s expected to take more such virtual excursions. Although the department has not revealed where he will go, the safe bet is allied European countries such as Germany, France and the United Kingdom.
Blinken also may appear in some form at the United Nations Security Council because the U.S. will hold that body’s rotating presidency in March. Any speech he gives to the Council will be heavily vetted for references to U.S. rivals such as China and Russia. The forum also is a good venue for Blinken to make major announcements about new initiatives.
There also could be some significant movement on the Iran nuclear deal. European officials have floated invitations to Iran and the United States for an informal gathering, likely next month, in which the two countries can discuss ways to resurrect the 2015 agreement. Details of that gathering are still fuzzy, but Blinken is likely to be involved in some fashion. — Benjamin Pauker
TECH AND CYBERSECURITY
Investigating solarwinds, strengthening defenses: INVESTIGATING SOLARWINDS, STRENGTHENING DEFENSES — The Cybersecurity and Infrastructure Security Agency recently received an infusion of senior officials, with Biden appointing a deputy director and leaders for the agency’s two main divisions.
While Biden has yet to nominate a director to head CISA, it's pushing ahead with investigations into the sweeping SolarWinds hack, in which suspected Russian hackers are believed to have targeted at least nine agencies and 100 companies. CISA analysts are helping their counterparts at other agencies pore through network data to determine what the hackers accessed and what they took.
As the SolarWinds investigation continues, some lawmakers have questioned whether CISA has the resources and authorities needed to get its arms around a compromise of this magnitude. During a hearing on Friday, House Homeland Security Committee ranking member John Katko (R-N.Y.) reiterated his concern that CISA lacks sufficient visibility into other agencies’ network traffic and sufficient authority to require them to make security improvements. Some lawmakers and policy specialists have floated the idea of formally turning CISA into the entire civilian government’s defender, transferring authorities, resources and personnel from agencies’ own cybersecurity offices into CISA and empowering it to monitor and defend their networks on their behalf. — Eric Geller
Still in limbo at FCC and FTC: Biden has yet to name a permanent chair at the Federal Communications Commission, which is currently evenly split right now between Democrats and Republicans. That means acting FCC chair Jessica Rosenworcel needs Republican support to move forward with any potential cases or rulemakings for the foreseeable future. That puts any potential controversial decisions, like bringing back Obama-era net neutrality rules that reclassify broadband as a Title II telecom service — a move Republicans staunchly oppose.
The Federal Trade Commission is in a similar situation — still awaiting a permanent chair and split between two Republicans and two Democrats. One big issue that is likely to get attention once Biden makes his pick: rulemakings to ban non-compete agreements. Democrats on the commission would like to adopt rules to limit or outright bar the use of non-competes for low-wage workers, while Republicans oppose such a move. For the moment, acting FTC chair Rebecca Kelly Slaughter is concentrating on privacy issues arising out of education technologies as well as biased algorithms and facial recognition. — Leah Nylen