First 100: The Day One Agenda Has Stalled Out

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The whole cabinet is right here, they can do things!

It’s April 2, 2021 and welcome to First 100. You can sign up to have First 100 delivered to your email by clicking here.

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The Chief

We have (very) quietly been updating our executive action tracker, which looks at what steps the Biden administration has taken to make progress on its own authority. Frankly, the trail has gone pretty cold. The traditional media has completely swallowed the notion that policy can only come from Congress, and implementation has been completely ignored, to say nothing of regulatory interpretation of policies passed before this year. So you have to be a detective to figure out if Biden is maximizing his power and preventing Mitch McConnell and Congressional gridlock from standing in the way.

Yesterday’s statement of year-one priorities for the Office of National Drug Control policy did not include rescheduling marijuana off the list of controlled substances, and of course Biden’s White House fired staffers who had previously smoked pot or took an ingestible, even if they came from states where that’s a legal action. So we moved that Day One Agenda item to No. Chuck Schumer is leading an effort to do this from Congress, but it’s doomed in a 50/50 Senate, and also unnecessary; Biden can deschedule and effectively legalize cannabis on his own.

On the student debt cancellation front, there was somewhat more hopeful news. White House chief of staff Ron Klain, in an event with Politico, said that he has asked Education Secretary Miguel Cardona to compile a memo that analyzes a president’s legal authority under the Higher Education Act to cancel student debt.

Contrary to the buzzing yesterday, this isn’t an advance and it actually confuses the issue. In mid-February White House press secretary Jen Psaki said Biden would task the Justice Department with reviewing the legality of student debt cancellation. A month and a half later there’s another legal review from a different agency. A policy review from the Domestic Policy Council was supposed to go along with that.

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One difference from February is that then, Biden was firmly opposed to cancelling up to $50,000 per debtor, still wedded to the $10,000 that he campaigned on (though he wanted that to go through Congress). Now, Klain says, “he hasn’t made a decision either way” on the level of cancellation, and won’t until he gets the memos “in the next few weeks.” (The authority allows for any number of cancellation, by the way, not $10,000 or $50,000, which are artificially designated figures.)

However, as I wrote earlier this week, the Education Department hasn’t taken the very minor steps to give student borrowers relief to which they are clearly entitled. A bunch of labor unions have joined the chorus, in their case asking the administration to cancel debt for public service workers under the Public Service Loan Forgiveness (PSLF) program who have qualified for cancellation by working in public service for 10 years. So I’m not sanguine that we’ll see debt cancellation for all borrowers until we see it for those already supposed to get it.

Another really powerful option for a president is to use “march-in rights” on prescription drugs that were developed with public support. The Bayh-Dole Act of 1980 allows the Health and Human Services Department to “march in” if those drugs aren’t being offered to the public on “reasonable terms,” with affordability being one of those terms, and then seize the patents, redistributing them to companies who will lower the prices for patients.

As Lee Fang writes today, the Trump administration engaged in an effort at the National Institute of Standards and Technology (NIST) to modify the Bayh-Dole Act’s rules in a way that would eliminate march-in rights based on high drug prices. Incredibly, this rulemaking was not frozen when the Trump administration ended, and it’s still open for public comment, which means it’s moving toward being finalized.   

Drug company lobbying has routinely blocked the use of march-in rights, but this obviously represents an escalation, by preventing such use ever in the future. Lobbyists have been working hard to get the NIST rule across the finish line, even in a Democratic administration. House and Senate Democrats have called on the White House to revoke the rule.

Not only did current Health and Human Services Secretary Xavier Becerra call for using march-in rights just last year to lower the cost of coronavirus drug remdesivir, Vice President Kamala Harris made march-in rights a major policy feature of her campaign. Presumably she would be interested in the fact that the administration she serves in is about to wipe this option out.

So not only is Biden not using the Day One Agenda to anything approaching its fullest potential, on one key piece he’s poised to roll it back. People should express their displeasure at this.

Getting Salty

You would think there would be more to think about on tax policy than whether upper-middle class suburbanites in high-tax states will be able to get a windfall deduction back. Fifty-five corporations paid no federal tax on their 2020 profits, and actually received $3.5 billion in rebates.

And yet the state and local tax (SALT) deduction is the preoccupation of Congress, after several House Democrats from New York and New Jersey said they wouldn’t pass the Biden infrastructure package unless the $10,000 cap on SALT is repealed. House Speaker Nancy Pelosi backed her colleagues yesterday, saying she would try to include repeal in the package. About 86 percent of the benefits of repealing the cap would go to the top 5 percent of income earners. The White House, to their credit, won’t be including it in the second-half announcement of the overall package.

There’s a way out of this box, as the Institute for Taxation and Economic Policy has pointed out. (Disclosure: ITEP executive director Amy Hanauer is our board chair.) You could replace the SALT cap with a “high-income tax” that would require a certain percentage of tax on households making over $400,000 a year, regardless of any deductions. This would eliminate the state-specific character of the SALT cap while maintaining high-income taxes and keeping budget neutrality. And it would force blue-state Democrats to decide whether their objection is their states being singled out, or just taxes on the rich.  

What Day of Biden’s Presidency Is It?

Day 73.

Today I Learned

• I was on Rising with Krystal and Saagar talking about the surveillance economy. Watch here. (YouTube)
• Ron Klain also said yesterday that nominees to top antitrust jobs would fall on the Tim Wu/Lina Khan side of the debate. (Twitter)
• An increase of 916,000 jobs in March, and topline unemployment down to 6.0 percent. (Calculated Risk)
• Port officials seize rubber gloves suspected of being made with slave labor in Malaysia. (New York Times)
• Talks are on in the Iran nuclear deal. (Wall Street Journal)
• The lobbying battle over ending the war in Afghanistan. (HuffPost)
• The American Jobs Plan is a blue-collar jobs plan. (Reuters)
• Chief of staff at the Department of the Interior reassigned after planning an interior, I mean, indoor party during the pandemic. (Politico)