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April 2, 2021

The Day One Agenda Has Stalled Out

Biden has failed to act and is even allowing constraints on executive
action to move forward. Plus: the SALT battle continues.

 

The whole cabinet is right here, they can do things! (Evan Vucci/AP
Photo)

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.

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.)

**Read all of our First 100 reports here**

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**** 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.

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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.

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What Day of Biden's Presidency Is It?

Day 73.

We Can't Do This Without You

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)

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