CABINET HEARING: Neera Tanden, Nominee for Director of the Office of Management and Budget 

Neera Tanden’s nomination to lead the Office of Management and Budget (OMB) was considered by two Committees this week: Homeland Security and Government Affairs; and the Committee on the Budget. Tanden’s nomination is widely viewed as the most tenuous of those offered by President Biden to this point, given her past statements about Senators from both parties. While Tanden’s hearing was rocky and pointed, we continue to expect she will be confirmed along party lines.

February 9, 2021

Senate Committee on Homeland Security and Government Affairs

ISSUES RAISED

    • Partisan Tweets – As expected, multiple Republican Senators raised concerns about Tanden’s previous personal statements, often put out through Twitter, that disparaged Republicans on the Hill. Tanden stated she regretted the language she used and apologized to anyone who felt hurt by her words. Tanden also acknowledged the importance of bipartisanship from the OMB Director, seeking to create a contrast between that role and her previous tenure as an advocate. Senators James Lankford (R-OK) and Josh Hawley (R-MO) raised their concern about a particular tweet from Tanden that they argued disparaged a religious group for their views on reproductive health. Tanden clarified that she did not intend to criticize people for their religion, rather she was criticizing the politicization of religion. 
    • COVID-19 Relief Efforts – Multiple Senators stated their concern about the impact the COVID-19 pandemic has had on their home states and asked Tanden to elaborate on OMB’s role in addressing COVID-19. Tanden noted that the recent jobs numbers from the past week signals that the American economy is still challenged and highlighted President Biden’s American Rescue Plan. She noted her work on New Jersey’s Restart and Recovery Commission addressing COVID-19, highlighting that a national response is critical as the virus does not respect state borders. She argued that the federal government could be an effective partner especially for states struggling to make the increased spending now required of them due to the pandemic. Tanden noted that while it can be difficult to target all of the COVID-19 relief, the lessons of the CARES Act are that even lightly targeted relief can insulate people from a lot of suffering.

 

  • Regulatory Reform – Senator Rob Portman (R-OH) raised concern with a previous statement from the Center for American Progress (CAP) while led by Tanden that criticized the Regulatory Accountability Act, and asked Tanden to elaborate on her views on regulatory reform. Tanden noted that while she is the CEO of CAP and is ultimately responsible for its statements, she did not make the concerning statement, and noted that it is important to find the right balance with regulatory reform to ensure they address public welfare while using cost benefit analysis. She stated she would look into whether OMB should implement cost-benefit analysis in independent agencies’ rule making activities.
  • Equity in Vaccine Distribution – Multiple Senators stated their concern that the COVID-19 pandemic has worsened the marginalization of minority communities, especially communities of color, and asked Tanden to elaborate on OMB’s role in ensuring equity in vaccine distribution. Tanden stated that across multiple metrics – from job loss to death rates to infection rates – people of color have been disproportionately impacted. She highlighted that the White House’s COVID-19 taskforce has emphasized equity in their planning and committed to ensure issues of equity are considered in cost-benefit analysis for the rulemaking process. She also committed to utilizing data to better understand how rulemaking can impact sub-groups within marginalized communities.
  • DACA – Senator Ron Johnson (R-WI) stated his concern that DACA had violated the Administrative Procedure Act (APA) at its inception and that it set the stage for a continuous immigration crisis, arguing the crisis will be made worse by President Biden’s executive orders revoking Trump administration executive orders on the topic. He asked Tanden to elaborate on her view of this issue. Tanden stated that there should be a legislative solution to DACA. She noted that she has yet to be confirmed, so she has not spoken to President Biden about his decision making for revoking several Trump administration immigration executive orders and committed to working with the Committee to report data and information on operations at the border.
  • Accessibility of Relief Programs Senator Kyrsten Sinema (D-AZ) stated her concern that frequent rule changes around eligibility and other program rules, especially around Paycheck Protection Program loans, have made accessing the programs challenging and confusing for small businesses, and asked Tanden how she will address these problems. Tanden stated her agreement that the guidance around the quickly allocated resources has been confusing and committed to working to make sure guidance and rule changes are consumer friendly, accessible, and transparent without impacting the ability to deploy the resources.
  • Grants for States – Senator Alex Padilla (D-CA) noted his concern that despite having the most populous state in the country, California received little in grants from agencies like the Department of Transportation. Tanden committed to ensuring that political orientations of states applying for grants would not be considered in the funding process – stating that the process would instead be based off evidence of need. Tanden noted that President Biden’s plan already increases federal cost-sharing of FEMA expenditures related to COVID-19.
  • China – Senator Hawley and Senator Rick Scott (R-FL) asked Tanden if she believed China was the largest security threat facing the U.S., and if she would work to remove Chinese products from critical domestic supply chains. Tanden stated that she would leave that distinction up to the National Security Council, but she agreed China was a risk, and would work to secure American supply chains from products produced by any bad actors. Tanden stated that the bilateral trade relationship has not been effective at compelling Chinese actions in the past and advocated for working with allies and partners to better pressure China to ensure a fair-trading system where American companies can compete.
  • Sunsets on Fast 41 – Senator Portman stated his support of the Fast 41 Federal Permitting Improvement Council, noting that it had saved $1 billion since 2015, and asked Tanden if she would support eliminating its sunset. Tanden noted the program has been very effective, reducing the permitting process time by 60%, and stated she supported removing the sunset. 

 

February 10, 2021

Senate Committee on the Budget

ISSUES RAISED

  • Previous Tweets – Multiple Senators commented on Tanden’s previous tweets that attacked a number of Republicans and Progressives in Congress. Chairman Bernie Sanders (I-VT) stated that he had received a letter from House Republicans regarding these tweets written by Tanden and asked Tanden to reflect on the statements. Tanden expressed regret for her previous comments. She noted she would take a different approach to her behavior on social media if confirmed as OMB Director. 
  • Donations to CAP – Chairman Sanders asked Tanden if the donations she secured for CAP from large corporations during her time as CEO would impact her decision making. Tanden stated that these donations would have no impact on her decision making as Director of OMB. She added that while CAP took donations from large corporations and Wall Street during her tenure, CAP frequently proposed policies that conflicted with their interests. 
  • Taxes – Several Senators asked Tanden whether the corporate and individual tax rates should be raised. Tanden stated that President Biden supports returning the corporate rate to 28%. She noted that upper income earners have multiple ways to avoid taxes which makes it harder to evaluate how much these individuals are actually contributing to taxes. 
  • Minimum Wage – Ranking Member Lindsey Graham (R-SC) asked Tanden if she thought raising the minimum wage would cost the economy jobs. Tanden stated that recent data shows that the market is more elastic to a raise in the minimum wage than previously thought, and accordingly, raising the minimum wage would not cost as many jobs as expected.
  • Debt Crisis – Ranking Member Graham asked Tanden if she supported a Simpson-Bowles like bipartisan approach to dealing with the debt crisis. Tanden stated that she did. Senator Scott asked Tanden if she was concerned about the high levels of debt and rising interest rates. Tanden stated that she would absolutely monitor interest rates. She also stated that the Federal Reserve has a tool for raising interest rates, but not for lowering them, adding that all policy makers should monitor this issue very closely. She added we should be concerned about the long-term health of the economy. 
  • Immigration Reform – Ranking Member Graham asked Tanden if she believed President Biden’s recent immigration executive actions would lead to more illegal immigration. Tanden did not believe this would occur. Senator Jeff Merkley (D-OR) asked Tanden if she would support funding efforts to rejoin families separated at the border. Tanden said she would. Senator Padilla asked Tanden if she would work to help illustrate the moral and economic imperative of immigration reform. Tanden stated that research has demonstrated that comprehensive immigration reform will help the American economy grow more robustly in the future.
  • Childcare Senator Patty Murray (D-WA) asked Tanden how the Biden administration will prioritize investments in areas that have created economic hardship for families during the pandemic, noting the lack of availability of childcare. Tanden stated that women have been disproportionately impacted by these hardships and this is a reason to invest in childcare and have robust paid leave programs. 
  • Cost-Benefit Analysis – Senator Chuck Grassley (R-IA) asked Tanden whether she believed the current OMB guidance is insufficient to capture qualitative costs and benefits. Tanden noted that the Biden administration’s recent memorandum did not limit cost-benefit analysis but outlines the importance of having more information included in the cost benefit analysis. She added the memorandum states that agencies should take issues of human dignity into account when conducting these analyses. 
  • Unemployment – Senator Ron Wyden (D-OR) asked Tanden what she would do to help secure unemployment insurance reform. Tanden stated that automatic stabilizers would provide more security to the unemployed, particularly families, adding that recent unemployment cliffs have demonstrated that automatic stabilizers are needed now more than ever. Senator Chris Van Hollen (D-MD) asked Tanden to talk about the risk of undershooting emergency action in the American Rescue Plan and the problem of long-term unemployment. Tanden stated that economic recovery is faltering, and ten million people have become unemployed in the last year alone. She added another issue that needs to be addressed is how low wage workers have suffered the most from this economic crisis. 
  • Healthcare Reform – Senator Mike Braun (R-IN) noted that he is in favor of healthcare reform but would prefer to see efforts to make the industry more transparent, competitive, and engaging to the consumer before government intervention. Tanden noted she would work with him on this and emphasized the importance of issues like transparency and the lack of competition within the industry. 
  • Buy American Act – Senator Debbie Stabenow (D-MI) asked Tanden if she believes Congress has a role to play in enforcing the Buy American Act. Tanden said that executive actions are limited, and permanent policy should come from Congress. Tanden added that the Biden administration’s executive action on this aims to provide accountability to those utilizing loopholes in the act.
  • Cost of College – Senator Pat Toomey (R-PA) asked Tanden if it were fair for a blue-collar worker who did not attend college to pay for the education of someone that would make $1 million more than them. Tanden said she is focused on helping to build a system in which everyone has access to quality education. Senator Merkley asked Tanden what the federal government and OMB would do to address student debt. Tanden stated that free tuition for middle- and lower-class students in public universities is an investment in the local and national good. She added that President Biden wants to address this issue because of the tremendous impact it has on the economic well-being of Americans.
  • Climate Change – Senator Sheldon Whitehouse (D-RI) cited reports that discussed the economic costs of unrestrained climate change across a number of industries. He asked Tanden how seriously she would take warnings of a potential economic crash. Tanden stated that she takes this warning seriously and looks forward to measuring the costs of both the government’s actions and inactions in response to the multi-industry threat posed by climate change. 
  • Vaccine Distribution – Senator Padilla asked Tanden if she would commit to leveraging the full resources of OMB to help California with vaccine distribution. Tanden said she would work to ensure that federally certified community health centers are able to provide vaccines. She noted it was equally important to ensure that vaccines are distributed to places that are hard to reach and minority communities that have been disproportionally harmed by the coronavirus.
  • Nuclear Waste — Senator John Kennedy (R-LA) asked Tanden about her thoughts on nuclear waste. Tanden stated that nuclear power is a clean alternative to fossil fuels and the government should take steps to ensure the security of this waste. 

TAKEAWAY

No doubt a rough few days for President Biden’s nominee, but ultimately nothing unexpected. Republicans had signaled for weeks they intended to bring up Tanden’s previous statements, and they clearly took pleasure in doing so. Yet, the more notable moment was the exchange between Senator Sanders and Tanden, as Democrats cannot afford to lose Senator Sanders’ vote on the nomination, and there were clearly fences to mend on that front. 

Aside from the more personal exchanges, Tanden was peppered with questions from virtually every policy area, from health care to homeland security. Tanden’s responses revealed little about the policy direction of the Biden administration – which, in fairness, she does not yet represent – but did demonstrate the depth of her knowledge across issue areas – an attribute that was likely an important part of her selection to lead OMB.

WHAT’S NEXT? 

Committee votes are the next step in the process – no timetable there. Republicans will no doubt oppose Tanden’s nomination in both Committee and on the floor. However, the only critical question is whether progressives (namely, Senator Sanders) or moderates (Manchin, Sinema) balk at Tanden’s nomination.