Today, neither President Donald Trump nor his Democratic challenger, Joe Biden, has secured the 270 Electoral College votes needed to win the White House after an unprecedented, unpredictable campaign that played out amid a global pandemic, economic recession and a national reckoning on race.
As of this writing, Biden leads with 224-213 votes, but nine states remain too close to call, with several still needing to tally votes collected during early voting periods or through the mail, a process that could last to the weekend or beyond. With such tight contests, legal challenges are expected, which could mean we may not know a winner for weeks or longer.
So, we’re providing our take on the big choices Trump and Biden each will face if they end up winning the opportunity to govern for the next four years, and the factors at play in their decision making, as well as how priority issues and industries potentially could fare under each. Consider this a sort of choose-your-own-adventure analysis as the nation sits in limbo.
Would Trump try to double down on conservative policies to “thank” his core supporters? Or would he be more focused on burnishing his legacy by fixing a country mired in a pandemic and recession? Given the mercurial nature of his first term, can anyone fully know what would be to come?
Would Biden strike a centrist posture and decide it’s most important to unite the country in these troubled times? Or would he stake out a progressive agenda that advances Democratic priorities? And, if he wins, how much change did the weary nation vote for? How much will it accept? How quickly?
Neither has really outlined in great detail what he would do if he won the race. During the campaign, Trump promised to return the economy to greatness — without detailing specifically how he would accomplish it. Instead, he spent the bulk of his campaign defending his record, particularly on the coronavirus pandemic, and tried to convince Americans that Biden was the weaker choice. Biden, meanwhile, was particularly difficult to read, with his campaign mostly referring back to promises he made during the Democratic primary fight. The tight lips were intended to keep the focus on Trump and his job performance.
If Trump wins, it’s easy to see a scenario in which he’s emboldened and pursues the type of conservative policies that he delivered for his far-right supporters during his first term – only, this time, on steroids. Indeed, he may feel even stronger and more confident than usual now that the Supreme Court leans even more conservative with the 11th hour confirmation of his third nominee for the bench.
It’s also possible that Trump – now validated by reelection and no longer having to keep his loyalists happy – would take a different path. Second-term presidents are always focused on building their legacies to try to shape how history will judge them – and this brand-focused president may be no exception. Whether that legacy work would start immediately – and whether he would be willing to strike deals with Democrats to solve the nation’s ills — or in two years after the 2022 midterm congressional elections is an open question.
Biden, for his part, has promised coronavirus relief by the end of January, in hopes of turning around the economy. If he’s elected and succeeds in solving the problems that he will have inherited and if there’s a vaccine that’s quickly and widely distributed, then Biden can presumably move on to his legislative agenda. There’s precedent for this approach; a dozen years ago, President-elect Barack Obama inherited a recession and sought to stabilize the economy before driving health care reform. Even so, that Obama would pursue a progressive agenda was never in question, as it would be with Biden.
The former vice president, who was known as a senator for working across the aisle, has always been more inclined to roll out a centrist agenda. But if elected, he would face significant pressure from the liberal wing of the Democratic Party to pursue an entirely progressive posture that would return the nation to Obama-era policies and, perhaps, even go further than that on issues like health care and climate change.
Next year, the factors outlined below will largely determine how each would govern if elected.
SCOPE OF VICTORY
It’s certain that, given how close the race remains now, the margin of victory will be narrow – no matter who wins. And that could make:
- Trump more inclined to start his legacy-shaping work immediately and find common ground with Democrats on pandemic and economic relief as well as on major legislative packages, like infrastructure spending.
- Biden more inclined to strike a more moderate tone – which is his comfort zone anyway – to find common ground across the political spectrum, seeking both to deliver for the broad voting coalition that elected him and try to heal the nation’s deep partisan divide.
Democrats have maintained control of the House, though just how much their majority expands has yet to be determined. But Senate power is less clear; races in nearly a dozen states are still too close to call, and the overall outcome may be unknown for several more days or weeks.
If Republicans keep Senate control and Trump wins re-election, the president would have an important ally in Majority Leader Mitch McConnell, who probably would go as far as he could to support a conservative Trump agenda as long as it didn’t risk GOP power in the 2022 mid-term elections. But if Democrats control both sides of Capitol Hill, Trump would be stymied from pursuing a conservative agenda, at least legislatively, and he would have little choice but to strike deals with them to get anything significant done.
Should Biden win and Democrats take Senate control, the Democratic Party would control all of Washington. Even so, a Democratic Senate majority wouldn’t reach the 60 votes needed to cut off debate, meaning Senate Republicans likely still would maintain a lot of leverage. Nevertheless, with control of both chambers, Biden would face pressure from the left to pursue a progressive agenda. But if Republicans maintain control of the Senate, Biden would essentially have to tack to the center and seek compromises to get anything done.
This president’s governing philosophy is not grounded in traditional Republican orthodoxy and generally lacks consistency. He has a short attention span and tends to champion policies he hears about through his media outlets, including Fox News. He appears to have little involvement with big swaths of the federal government, which has meant that many Cabinet secretaries have had broad latitude to operate and have pursued policies with little to no direction from the White House. Given all this, it may be hard to decipher whether Trump has any second-term strategy at all. If he’s re-elected, continue to expect the unexpected because, as Trump has proven, he does not follow a traditional presidential playbook.
Biden’s Running Mate
On the flip side, Biden, who has described himself as a transitional figure in the Democratic Party, has California Sen. Kamala Harris as his vice presidential running mate, and she would have an outsized role in helping him chart the course for the future of a Democratic Party that’s arguably more hers than his. While Harris was tugged to the left during her own Democratic primary campaign, the left’s criticism of his former prosecutor was that she wasn’t progressive enough. Even so, her influence could determine just how far Biden’s agenda moves from the center to the left.
PACE AND PERSONNEL
It’s unclear just how quickly Trump would act on anything. If he defies expectations yet again, he very well could spend several weeks taking victory laps of the country and lambasting those who didn’t support him. Until Senate control is determined, he no doubt would seek to create policy through executive order, starting in the lame duck legislative session. And, he would be likely to clear the decks of his Cabinet, ridding it of anyone he thinks has worked to undermine him and his agenda. His purge likely wouldn’t stop with those at the top of agencies; he’s expected to put significant pressure on everyone in civil service to pledge loyalty to him if they want to keep their jobs, a move that could dramatically remake the federal workforce. When the dust settles, whoever he installs in key posts could provide clues to his second-term priorities.
As for Biden, this much is clear: a plan for COVID-19 relief and stabilizing the economy would be his top priorities. Less clear is what would come next – and how soon. Even so, if Democrats sweep Capitol Hill, watch for them to quickly employ the Congressional Review Act to reject with a simple majority, in both the House and Senate, executive branch rules that the Trump administration enacted within a certain time frame, a tool Republican majorities previously used to overturn a raft of Obama policies. Personnel would provide another important clue about how far Biden would go; if he chooses Massachusetts Sen. Elizabeth Warren for Treasury Secretary, for example, progressive proposals to “rein in” Wall Street no doubt soon follow.
Despite all these factors, we outline below how priority issues and industries potentially could fare under Trump or Biden.
Through a combination of administrative rulemaking and executive orders, Trump has spent the past four years loosening the government’s grip on a host of regulations across a range of sectors, theoretically to make it easier for businesses to operate in the U.S. If he’s elected, expect even less oversight of all major sectors of the economy, from energy and health care to financial services, technology and transportation. The big caveat here is anything Trump would do to address the pandemic and the economy. His emergency responses so far have ushered in an era of big government intrusion into and oversight of the private sector.
Every shift in White House power comes with a certain “snap back” of rules passed – or lifted – by the previous administration, and next year would be no different if Biden is elected. Indeed, it would become tougher for industry after four years of Trump significantly loosening federal rules to make it easier to do business in the U.S. Beyond sweeping emergency pandemic and economic relief measures, expect a Biden administration to adhere to core Democratic principles and tighten oversight of the private sector, with substantially more government rulemaking on all major sectors of the economy, from energy and health care to financial services, technology and transportation.
Trump’s signature 2017 tax plan lowered the corporate tax rate and trimmed individual tax rates overall, lowering the top individual rate to 37 percent from 39.6 percent. More tax cuts would be likely, with Trump possibly trying to forgive this year’s deferred payroll taxes, lock in business tax cuts set to expire in 2022 and 2023 as well as the individual tax cuts set to expire in 2026, and create new tax breaks. He also could have the political capital to revive the idea of a payroll tax cut; stiff bipartisan opposition thwarted that idea over the summer. Mostly, though his re-election would mean that Democrats wouldn’t be able to raise taxes on companies and high-income households. Even so, if Trump is elected, it’s fair to expect a tax package of some kind next year with the timing and scope determined primarily on whether and by how much Democrats control both chambers of Congress.
Supporting general Democratic positions of higher taxes for the wealthy and companies, Biden has promised to raise both the capital gains tax and, for the highest-earning Americans, income tax to 39.5 percent while hiking the corporate tax rate (which Trump lowered) to 28 percent and boosting the Social Security payroll tax to 12.4 percent. He also would provide tax credits for alternative energy, health care and “Made In America” items. Many other tax deductions also could be on the table for being repealed or not extended. If he’s elected, expect a tax package of some kind next year with the timing and scope determined primarily on whether and by how much Democrats control both chambers of Congress; Biden would have no choice but to bend on some of those proposals if Republicans win the Senate.
If he’s re-elected, expect more of the same after four years of Trump engineering trade wars and using tariffs to pressure countries. He views the United States-Mexico-Agreement, his replacement for NAFTA, and the first phase of a China deal as key accomplishments. But that deal was signed in January, just before the coronavirus pandemic gripped the world and significantly strained U.S.-China relations. Under the deal, China was supposed to buy roughly $200 billion over two years in American products in exchange for the U.S. cancelling a range of tariffs. But analysts say China is not meeting its buying commitments so far. And the second phase of the deal is expected to focus on tougher issues between the two countries – if it even occurs. Trump recently said he’s not interested in talking to China.
After four years of Trump trade wars and a bilateral approach to agreements, Biden has pledged to normalize trade relationships with “steady state” diplomacy – whatever that means. He opposes using tariffs to pressure countries and a crackdown on waivers while backing the Obama-era Trans-Pacific Partnership and generally supporting the United States-Mexico-Agreement, the Trump-era’s replacement for NAFTA. So, while the style may change, the substance may not, at least in some cases.
For four years, Trump has promised he would “immediately” replace Obama’s signature health care law with a plan of his own that would provide “insurance for everybody” with lower costs. But he has never released such a plan and, instead, spent his first term pursuing incremental steps like expanding lower-cost health insurance alternatives for small businesses and individuals while also seeking to curb prescription drug costs. He may be waiting to act until after the Supreme Court – which now leans conservative – rules on Obamacare sometime next year. Regulations to curb drug costs also were elusive last year but might be an area where Trump could reach a bipartisan accord if Democrats control all of Capitol Hill.
Biden has promised not only to keep Obamacare but to “improve” it with a public health care option with no deductible, but he has opposed the left’s call for “Medicare for all.” Any such “public option” would require congressional approval, and while it would be dead on arrival [if Republicans keep the Senate] the odds of passage improve if Democrats win control. Nevertheless, liberals in both chambers will push for more government control of health care. So, watch what they say they would be willing to accept and how the pandemic would shape Biden’s agenda, given that as many as 14 million Americans could lose health insurance because of job losses or because they are dependents of someone with an employer-sponsored plan. The political risk of advancing health care is substantial. Presidents Clinton, Obama and Trump all paid a high political price – measured in House seats lost – in the mid-term elections following legislative action on health care.
In his first term, Trump weakened protections in landmark pollution laws that had stood for a half-century, pulled the U.S. out of the Paris climate agreement, and rolled back scores of regulations limiting the oil and gas sector. In a second term, Trump no doubt would continue to protect traditional American fossil fuel companies rather than support renewable and alternative energy firms as part of the global energy transition under way. Rollbacks enacted in his first term – in regulations ranging from oil and gas and mining in federal wilderness to power plant pollution – are set to take effect in his would-be second term. Also, if elected, expect him to continue fights with California and other Western states over his plans to ease future vehicle mileage standards. At the same time, the more conservative Supreme Court will be ruling in the coming months on a series of challenges by states and environmental groups to many of the rollbacks.
Curbing climate change would shape every part of Biden’s energy agenda, meaning the industry would face a significant shift. In the final debate, he made clear that renewable energy has to replace the oil industry “over time.” That effort would theoretically begin immediately. Aside from quickly rejoining the Paris Climate Agreement and adopting its policies, if Biden is elected, expect tax credits and other support for alternative energy. More limits on methane pollution and taxes on carbon emissions would be certain, as well as the potential end of offshore drilling and the nixing of fossil fuel subsidies. He also likely would follow through on campaign commitments to ban new oil and gas leases on federal land and require public companies to disclose climate risks and greenhouse gas emissions.
Trump has spent the last four years both deregulating the industry by rolling back net neutrality and broadband privacy rules while also seeking to rein in its power through an executive order that points toward greater regulation of social media companies, which he argues are biased against conservatives. Specifically, Trump has asked the Federal Communications Commission to use its regulatory authority to “limit legal protections for social media platforms if they don’t adhere to standards of neutrality.” It’s unclear how the Republican-led FCC will vote. The biggest consequential clash with Trump’s administration that no doubt would play out in a second term is the Department of Justice lawsuit filed last month against Google over antitrust allegations.
This is a big, important unknown. Any quick action probably would be focused on providing more access to people, particularly given how the pandemic has reshaped working and education while exacerbating the divide between those who can – and can afford to – log on and those who can’t. Anti-trust issues may be a focus; Biden advisers recently have said he is “deeply concerned” about monopolies and market concentration, including in tech. Finally, Biden has called for the revocation of Section 230 of federal law, which states that internet companies aren’t liable for the content posted on their platforms. He has bipartisan support for scrapping that section.
TRANSPORTATION & INFRASTRUCTURE
Trump has long advocated for rebuilding the nation’s roads, highways, railways, airports and smart grid. This is perhaps the one area where Trump and Democrats may find agreement – no matter if Democrats control only one part of Capitol Hill or both. If the economic rebound continues to be sluggish or goes backward, Trump may look to create jobs by pouring money into infrastructure projects. The challenge with such planning is that its bipartisan support generally breaks down over funding. This would be no exception given that Trump’s infrastructure plan proposed $1.5 trillion over 10 years and Democrats have long envisioned even more, while Republicans have long questioned the Trump price tag.
Expect a lot of momentum to be spent on transportation and infrastructure if Biden is elected; a federally funded $1.3 trillion, decade-long infrastructure program to rebuild the nation’s roads and bridges and other transit elements – paid for by higher taxes on corporations and high-income earners – is the foundation of his transportation plans. Biden likely would push for Congress to approve this quickly as a way to create jobs and help the economy recover more quickly by injecting money into it. Certain to give industry pause: all projects would be “required to source materials in the U.S.” Here, too, green is the name of the game, with support for electric vehicles, sustainable fuels and “zero-emissions, high-quality public transportation options.”
Trump successfully won passage of bank deregulation legislation in 2018, and analysts expect Wall Street banks to receive more capital relief in a second term. Also, Trump is expected to continue to pursue an ambitious overhaul of the housing finance market, returning Fannie Mae and Freddie Mac – the government-sponsored organizations that guarantee more than half of the country’s mortgages — to the private markets. And, after taking steps in the first term to make it easier for technology firms to get into banking, Trump may pursue rules and legislation that promotes innovation in financial services, something a lot of banks already have embraced since the pandemic took hold in the spring.
It’s incredibly unclear just how much financial regulation Biden supports. After championing parts of Wall Street over the years, he has both shifted to the left on everything from stock buybacks to student debt while also rejecting the ultra-progressive proposals to rein in the financial services sector that previous Democratic presidential nominees have embraced. So, it’s possible he would take a more middle-of-the-road approach by trying to avoid angering progressives pushing for more regulation without alarming moderates worried about too much – perhaps unless he installs Warren at the Treasury Department. Regardless of which way he goes, he would be likely to make moves that will negatively impact private equity firms, from higher taxes to greater scrutiny on deals to an increased focus on stakeholder capitalism.
We know, we know… it’s too soon to focus on the 2022 elections and we don’t have much appetite this morning for thinking about it either. But it’s not too soon for Democratic and Republican leaders in the House and Senate. Midterm elections generally cost the president’s party House seats, and House Speaker Nancy Pelosi certainly is mindful of that history. In the Senate, Majority Leader Mitch McConnell already is looking at 2022 Senate elections in which nearly twice as many Republicans are “up” for re-election as Democrats, meaning he’s going to be hyper-focused on making sure the party is strong enough to withstand Democratic challenges.
The mid-term elections and the opportunity they represent for each party will likely shape the priorities of the next two years – and how the president-elect, whoever that ends up being, ultimately governs for the next two years.