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A year after ending her presidential bid, Warren wields soft power in Washington

SENATE WARREN 1
Senator Elizabeth Warren speaks during a hearing on Capitol Hill in Washington, February 3, 2021. (Photo: NYTimes)
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WASHINGTON — At Adewale Adeyemo’s confirmation hearing last month, Senator Elizabeth Warren pressed the deputy Treasury secretary nominee to commit to using the department’s regulatory powers to scrutinize the private equity industry, which she said posed a risk to low-income communities when buyout firms strip companies of assets, load them with debt and fire workers.اضافة اعلان

 Warren, a progressive Democrat from Massachusetts, has been a mentor to Adeyemo, who served as her chief of staff when she was establishing the Consumer Financial Protection Bureau (CFPB) a decade ago. But when he gave a noncommittal answer, she did not let him off the hook.

“I don’t think you should waver about this,” Warren said emphatically. “Treasury should not be a bystander in this.”

The exchange underscored Warren’s role in the new Washington, where the Biden administration and congressional Democrats control the levers of power. A year after ending her own presidential bid, and with her aspirations of becoming Treasury secretary unfulfilled, Warren now wields influence in her own way. She has shepherded a pipeline of progressive former staff members into powerful jobs across the government, and she releases a steady stream of legislative proposals that have kept her progressive ideas at the forefront of the policy conversation.

Two months into the Biden presidency, it is not yet clear how much Warren’s sway will yield in terms of policy results. But many of her ideas for raising trillions of dollars of revenue by taxing the wealthy and big corporations will soon take center stage as the Biden administration and Congress consider ways to pay for the multitrillion-dollar infrastructure plan that they hope to pass this year.

Marcus Stanley, the policy director of Americans for Financial Reform, an advocacy group, said the upcoming infrastructure and jobs legislation would be a real test of Warren’s influence.

“We probably have a big bill coming up in the next couple of months, so when you talk about winning the policy fights, we’re going to see there,” Stanley said.

If personnel is policy, as Warren likes to say, then she is winning so far. Many of the top officials and senior staff members at the nation’s most powerful economic policymaking and regulatory agencies are ideological allies who have been groomed by Warren.

In addition to Adeyemo at the Treasury Department, Warren has worked closely in the past with Bharat Ramamurti, the deputy director of the National Economic Council, and Rohit Chopra, President Joe Biden’s nominee to lead the CFPB.

The effect of the hires can be seen in the progressive tilt of the $1.9 trillion economic relief law, which dismissed concerns about deficits and focused heavily on poverty reduction. Warren and her allies hope that having strong advocates for progressive views within the administration will help those ideas find purchase in a White House that thus far has been more open to tacking to the left than previous Democratic administrations.

But it remains to be seen how far the Biden White House is willing to go, particularly with regard to tax increases, which is an area where the two former candidates disagreed.

Although she has been off the campaign trail for more than a year, Warren has been reviving proposals that she promoted in Iowa and New Hampshire.

This month, Warren and two House Democrats introduced legislation for an “ultra-millionaire tax” that is modeled after what she proposed as a candidate. The 2 percent annual wealth tax on the net worth of households and trusts between $50 million and $1 billion was unveiled with polling data to back up its popularity and letters supporting its constitutionality.

This week, Warren plans to pitch new legislation to increase taxes on big companies. Her “real corporate income tax,” which was also part of her campaign platform, would require the most profitable companies to pay a 7 percent tax on their annual book value — the earnings that they report to their investors but not the Internal Revenue Service — above $100 million. The idea, which is similar to a proposal that Biden put forward during his campaign, is intended to stop companies from using accounting loopholes to lower their tax bills.

When it appeared that Democrats were likely to lose the Senate after the 2020 election, some industry groups were relieved that Warren would not become the Treasury secretary. These days, however, they acknowledge that they are watching her moves closely.

“Senator Warren is certainly well positioned to have an outsized influence in the Senate and the administration,” said James Maloney, a managing partner of Tiger Hill Partners, a public affairs firm focused on financial services. “Every item that she’s focused on should be a focus area for the industries whose policies can potentially be impacted.”

Maloney, whose firm represents some private equity companies, noted that allies of Warren were spread across the Biden administration. He said businesses were closely watching the letters that Warren sends to regulatory agencies and the responses she receives.

Biden has so far not been persuaded by her argument for using executive authority to waive student debt. And the White House has given mixed signals on Warren’s wealth tax.

Treasury Secretary Janet L. Yellen, whose nomination Warren supported, has expressed skepticism about the feasibility of putting a wealth tax in place. Yellen’s recent hiring of Natasha Sarin, a protégé of Lawrence H. Summers who has been skeptical about how much revenue a wealth tax would generate, to join her economic policy team raised eyebrows among some in Warren’s orbit.

In an interview, Warren said she was heartened by the early returns of the Biden era after four years of President Donald Trump’s deregulation and tax cuts.

“People like progressive ideas and want to see them enacted,” Warren said. “That’s going to happen. Washington is beginning to catch up.”

She said she planned to have a private conversation with Yellen about how to establish the tax.

“If that’s her biggest problem, then we’re good,” Warren said. “It’s easy to implement. We just need to sit down and talk about it.”

In the meantime, Warren feels a sense of relief after four years of being on defense. On the day she voted to advance Chopra’s nomination to the lead the consumer bureau, she reflected on how different his tenure would be from that of Mick Mulvaney, whom Trump appointed to neuter the agency in 2017.

Chopra helped Warren establish the bureau and worked for five years as its assistant director and student loan ombudsman. Mulvaney tried to cut its funding and scrambled its acronym out of spite.

“Mick Mulvaney was doing everything he could to try to undercut the consumer agency, and he made no secret about that,” Warren said. “Now there’s someone who will be in charge of the CFPB who sees the need for a level playing field and a fair set of rules and who has the backbone to get in there and make it happen.”
 
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