By the time President-elect Joe Biden takes office on January 20, the US economy will likely still need significant help. That’s a lot like the situation the country faced 12 years ago, when he took office as vice president.
No one in the Obama administration was more central to the efforts to revive the economy than Biden. The vice president was the point man for the administration’s $787 billion economic stimulus package, said David Axelrod, who was senior adviser to President Barack Obama after running his 2008 campaign.
“It wasn’t an honorary title,” said Axelrod about Biden’s role. “He was deeply involved in both crafting it and passing it. And when it passed, he ended up administering it. He was literally on the phone every day with mayors and governors and members of Congress and all kinds of people to see the implementation.”
While that experience will serve Biden well once he takes office, things are radically different this time.
Also, after the 2008 election, the outgoing Bush administration worked with the incoming Obama team to draft a response to the economic crisis.
President Donald Trump hasn’t yet acknowledged that Biden is going to be the next president, and even if he eventually concedes the election’s outcome, he’s unlikely to work closely with his successor on a new round of stimulus.
“Trump will set himself up as the leader of the resistance, putting pressure on Republicans not to cooperate,” said Axelrod. “That’s a level of complication we didn’t have [in 2009].”
But Axelrod and some economists say the 2009 playbook could be a key to reviving the economy.
“We learned a lot from that experience, what worked and didn’t work,” said Mark Zandi, chief economist at Moody’s Analytics. “That augers well for the response here. I take great solace in the fact that the team that went through that will be calling the shots again this time.”
It’s possible that many Obama staffers could return as part of the Biden administration to help craft the response this time. Biden has already named Ron Klain, his chief of staff when he was vice president, to be his chief of staff as president.
“They’ve seen this movie before. It’s probably going to help them form their strategy,” said Axelrod.
Much of the 2009 stimulus package was in the form of tax breaks. That’s not as likely to happen this time.
“The tax cuts were added in part because we thought it would make the bill more enticing to Republicans. It did not,” said Axelrod, referring to a bill that passed with virtually no Republican support. “We thought there would be some modicum of support from Republicans concerned about the economy. We were dealt a sober lesson. Biden may feel like he could do be better based on his relationships with Republican senators. That would be great for the country if he does. But I don’t think he’ll go in expecting that to be the case.”
The $787 billion price tag of that 2009 stimulus bill was modest by today’s standards. The $2 trillion CARES Act, which was passed in March with bipartisan support, included help for the airline industry, forgivable loans to small businesses to keep employees on staff, increased unemployment assistance and direct payments to many taxpayers.
But negotiations between House Democrats and the Trump administration on a new round of stimulus deadlocked right before the election. And it’s not clear whether there’s any chance of passing such a package during the pre-inauguration lame duck session .
And if a new round of aid passes between now and the inauguration, Axelrod thinks that will kill chances for a package passing the Senate once Biden takes office, unless the Democrats win two seats in Georgia runoff elections on January 5 and take control of the Senate -— a tall order.
“If they pass anything in the lame duck, I don’t see [Senate Majority Leader Mitch] McConnell saying, ‘We need to do more.'”