What to expect when you’re expecting divided government

Below is an edited transcript of the podcast:

JAKE TAPPER: Joining me now one of the people in charge of the binary transition team. Jen Psaki, Jen, thanks for joining us. Let’s talk about Biden’s cabinet picks — President-elect Biden’s Cabinet picks. cere told this week, perhaps as he’s as early as Tuesday, he’s going to make some announcements on that. Do you have concerns that senate republicans are going to block the members of the Biden cabinet from being confirmed?

JEN PSAKI: Well, there are a number of Republicans who have come out this week who have said they would support experienced and qualified nominees. I that’s exactly those are exactly the kind of people who Joe Biden is going to announce and nominate this week and in the weeks to come.

JOHN HELTMAN: So you may have already heard the news that former Vice President Joseph Biden won the presidential election last month, tallying a projected 306 electoral votes to incumbent President Donald Trump’s 232. And what happens next — indeed, what’s happening right now and will continue to happen over the next several months — is that the president-elect will start announcing his nominees for cabinet-level positions, starting with the most consequential seats first.

NPR: Biden’s early cabinet picks suggest an emphasis on experience and also on diversity. The office of Treasury secretary has existed since Alexander Hamilton’s time and there’s never been a woman in that job. Until now, Biden says Janet Yellen will be his nominee sent to the Senate.

HELTMAN: There’s this fun game that journalists and pundits play at the dawn of any new administration, and it’s called the “Who will President X pick for Y post” game. It can get a little silly, but it’s important, because, as they say, personnel is policy.

But policy is also policy, and in the case of the incoming Biden administration, there is a big gap between the policies that the president-elect campaigned on and what he will actually be able to deliver. That is because the blue wave that was expected to give Democrats a Senate majority of between one and four seats never materialized; instead, Senate control hinges on a pair of runoff elections in Georgia on January 5 in which Republicans are widely favored, and Democrats’ majority in the House also narrowed by a dozen seats.

So if you’re the Biden administration, you have to be thinking about what you can get done without a cooperative Congress — what your priorities are and how much latitude you have in pursuing them. So what do we know about what those priorities might be, and what kinds of options does the incoming administration have to further those goals?

From American Banker, I’m John Heltman, and this is Bankshot, a podcast about banks, finance, and the world we live in.

So let’s start with Congress. As I just said, we’re waiting for the results of the Georgia runoff elections to know for sure who will control the Senate. But regardless of that outcome, we already have reason to suspect that a lot of the initiatives that Biden ran on aren’t going anywhere.

ISAAC BOLTANSKY: I think all of us spent so much time contouring, what the blue wave would look like.

HELTMAN: Yeah.

BOLTANSKY: You kind of got to throw a fair amount of that out. This is Isaac Boltansky. I am the director of Policy Research for Compass Point Research and Trading, a boutique investment bank based in D.C. At most you can say that you got a bit of a blue low tide. On given that in the house, Democrats actually lost seats, they’ll still have the majority, but they lost seats on a net basis. So Speaker Pelosi will have to govern with a narrower margin, which is going to impact policymaking. The White House is obviously going to shift. But what’s most important for banks is that it looks as though the Senate is going to stay in Republican control.

NEIL HAGGERTY: … meaning that Senator Pat Toomey from Pennsylvania will be the likely chairman of the Senate Banking Committee. I’m Neil Haggerty, and I’m the Congress reporter at American Banker. He is a very sort of free market, conservative, limited government. That is, that is how he is in his ideology, and so he’s probably going to clash with Senator Sherrod Brown, who’s the top Democrat on the committee. Sherrod Brown has pushed for, you know, the Fed to offer free digital bank accounts to consumers. Don’t see that happening with Pat Toomey. Senator Sherrod Brown, you know, has pushed for tougher, stricter regulations on Wall Street — I don’t think that’s going to happen with Pat Toomey. The democrats have also pushed for a moratorium on negative credit reporting during the pandemic. And I don’t think Senator Pat Toomey is interested in in putting a moratorium on negative credit reporting. I think he is of the belief that our credit reports need to be accurate. So that could pose some gridlock in the Senate.

HELTMAN: Most of the bank-facing regulators come before the Senate Banking…