Best Chances for Policy Compromise

Written on .

The first and most obvious area of compromise involves dealing with the pandemic.  Both parties support additional pandemic relief, including stimulus spending.  Republicans want less than $1 trillion, while Democrats want more than $2 trillion.  Controversial portions of any compromise include Republican demands for some protection for business from pandemic claims, while Democrats want more aid for state and local governments. 

Compromises could likely include additional federal supplements to state unemployment that have expired, more Pay Check Protection Program loans for firms, and expanding the employee retention tax credit.

The next best bet for a legislative compromise is infrastructure.  Both parties have proposed significant infrastructure programs during the Trump Administration, and there is room for consensus on the general approach.  The main reason for a lack of compromise on this issue in the past has been the details of the program, including the price of the program and possibly climate-change aspects.

Although not necessarily an area of policy compromise, an area where there is likely to be less change than might be anticipated, is healthcare.  There is a case pending before the U.S. Supreme Court, California v. Texas, challenging the legality of the Affordable Care Act (ACA) which could conceivably have had the result of invalidating the entire law.  At the oral argument in this case on November 10, 2020, however, a majority of the Justices indicated that the law will likely stand, with little or no change.  Thus, there will be no immediate need for legislation as to the ACA.

Further, Mr. Biden has resisted calls from his party's liberal wing of Medicare for All, although he does favor adding a public option similar to Medicare.  There would not be sufficient legislative support of the public option, however.  Mr. Biden could likely undo the various Trump Administration regulatory changes to the ACA.  These regulatory changes would include discontinuing waivers that allow some states to avoid certain ACA coverage requirements.

Another area of potential consensus and thus legislation include a federal paid leave program.  Business has an interest in a federal paid leave program that would pre-empt or negate state and local paid leave laws.  Both Republican and Democrat legislators have proposed federal leave programs, some on a bipartisan basis.  Therefore, this would seem to be an area in which federal legislation might be bipartisan.

A more controversial area in which legislation will definitely be proposed pertains to the federal minimum wage, currently $7.25 per hour.  The last increase to the federal minimum wage passed in 2007, and increases in the federal minimum wage are politically popular among both Republicans and Democrats.  Eight states, including Florida, have passed laws that will eventually bring the minimum wage to $15.00.  Mr. Biden wants to raise the federal minimum wage to $15.00, but many believe that increasing costs during the pandemic is not wise.  A 2019 analysis by the non-partisan Congressional Budget Office found that increasing the minimum wage to $15.00 by 2025 would boost the income of 17 million Americans, but would also cause 1.3 million to lose their jobs.  Losses would fall heavily on low-income workers without a high school diploma.  Most commentators believe that there will not be enough Republican support for a major increase of the minimum wage, but this writer believes that smaller changes are possible if not likely.

On immigration, Mr. Biden will likely seek to reverse President Trump's administrative attempts to limit immigration, but bold changes will likely need legislation.  Mr. Biden will likely be able to increase the number of employer-based visas awarded each year and eliminate country-based caps, as well as taking in more refugees and changing the asylum process.  He will likely limit deportations to those with serious criminal convictions.  He will likely continue the legality of allowing remaining and working in the U.S. for Dreamers, immigrants who came into the country illegally as children.  The favoring of more immigration is largely supported by industries that struggle to fill positions. 

This is part of our December 2020 Newsletter.

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