Bloomberg Wall Street Week: Steyer, Sebelius, Summers

people in the world. Through the eyes of the most influential voices Larry Summers, the former Treasury Secretary, star Ward, CEO, Kevin Johnson, sec Chairman j Clayton, Bloomberg wool Street Week with David Weston from Bloomberg Radio Global. Wall Street spent at least part of this week focused on the presidential election, with the nomination of Joe Biden for president and Kamala Harris for vice president. As we all try to come to terms with what a Biden administration would mean for

the economy, for business, and for the markets. So this week we have a special edition of Wall Street Week, one given over to the basic question of how a President Biden would handle the key issues the economy, taxes, climate and energy, healthcare, and foreign relations. This is our moment to make hope and history rhyme with passion and purpose. Let us begin, You and I together, one nation under God. You nine our love for America, united in our love

for each other. Democratic nominee Joe Biden has big plans, and he's not afraid of paying for them with taxes. He plans to raise the top tax rate on individual income to just under for those earning over four dollars a year, with the top one percent of households bearing three quarters of that burden. Capital gains taxes would also go up to thirty nine point six percent for those with an income of over one million dollars a year. President Trump, on the other hand, says he is considering

cutting that rate. The Democratic nominees plans also mean big changes for some of the most profitable companies. Biden plans to raise the corporate tax rate to percent and impose a fifteen percent minimum tax on profits reported to shareholders. I asked Ever Corps co chairman and co CEO Rolph Schlastein what the Biden Harris proposals would mean for the investment banking business. Look, I think, uh, we've had a pretty irresponsible fiscal policy prior to uh, the beginning of

the COVID pandemic. We had it literally a trillion dollar budget deficit at three and a half percent unemployment, which I think is a truly irresponsible policy. If you look at the share of GDP that has gone to federal taxes, it's the client steadily from about nineteen and a half percent to sixteen and a half percent, which in my view is inadequate to take care of the basic needs that we have in government, which is why we were

running larger deficits. So I think what we'll find in the Biden administration is uh, perhaps a commitment to a little more of a commitment to things like health care and education and we've seen in the current administration, but very importantly UH and certainly a big commitment to infrastructure, but very importantly UH, a willingness to pay for those commitments so that we're not saddling our children and our

grandchildren with unacceptable debts. So so well, I think everyone pretty much agrees we have needed to spend money, and that means borrow money. Given the real crisis in the economy right now, we're taking a look at a cliffhanger here with fiscal stimulus. As we thought we were going to get something by August one, we now are looking at September. What is it kindom gonna look like by

of every third whoever wins the election. Well, the economy is uh, it's gonna be in recovery, but unemployment is still gonna be by far unacceptably high, UH, probably one side or the other of nine or ten. UH. So we're gonna need to have a continued stimulus. Think the plan that is hopefully at some point will be compromised between the the Democrats and the White House and the

Republicans in the Congress is needed for sure. But once we get on the path of recovery, and that will not be really fully done until we have a widely available vaccine UH and widely available therapeutics because until then people will be fearful of returning a hundred percent to their lives prior to this. But once we have that, we need to UH provide more resources through the government.

And I think Biden has a very intelligent UH tax plan, part of which is simply reversing some of but not all of and certainly the most irresponsible parts of the Trump tax cuts UH. And also and and paying for the investment that we so strongly need in this country. So we'll pick up on that road and go to your business quite specifically. I mean, you guys are the

investment bankers, park salons. Did you see an uptick in business when the rate went down so far for corporations and then on the flip side if it went back up to which is what Vice President finals talking about, would that hurt your business? Uh? I think really neither an uptick nor a downtick. And let me explain why all the corporate rate does uh? Is it? Uh? Basically redraws a little bit the line between of the pre tax earnings what goes to shareholders and what goes to

the government. We had a policy that thirty five percent went to the government and went to shareholders. Uh. That was quite honestly out of step and non competitive with the rest to the world. I think the generally the majority of the world, the developed world, is in the range uh. You know, so where percent of the pre tax profits go to the government and the rest go

to shareholders. That's important because we don't want to lose businesses domiciling in the United States because they perceived, relative to other countries that too much of their pretax earnings are being taken by government. We're probably out of step a little bit with all but the tax havens. UH. In the other direction, that was Ralph Slawstein of ever Corps. Coming off the cost of clean energy. We talked to a former presidential candidate, Tom Stire about Joe Biden's climate plans.

That's next on Wall Street Week on Blueboad. This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio. Democratic nominee Joe Biden plans to spend two trillion dollars over four years on clean energy and rejoined in the Paris Climate Agreement is at the top of his list. We can and we will deal with climate change. It's not only a crisis, it's an enormous opportunity, an opportunity

for America to lead the world and clean energy. His extensive plan calls for the eliminating of all carbon emissions in the production of electricity for the power grid, by then pressing on to reach net zero emissions overall by The biggest emitters of c O two today are China, the United States, and the European Union, and presidential candidate Biden says clean energy policies will create jobs, including ten million union jobs and one million new jobs in the

auto industry. The Biden plan does not ban tracking or rule out nuclear power and other technologies that have divided environmental advocates. Tom star Are, founder of next Gen America and former Democratic presidential candidate, put climate change at the heart of his policies during his candidacy. I asked him

whether Democrats can unite behind Biden's climate plans. You know, it is a plan that deals very aggressively with our need to change our climate affecting energy policies, but it is also an environmental justice program at its heart, putting the clean air and clean water in underserved black and brown communities at the very heart of the program. And it is also a huge union jobs program across America because we need to rebuild this country in a sustainable

and resilient fashion. So I think what they're talking about in healthcare, I think what they're talking about in terms of climate is a broad based change, a transformative change in America to get us back on track in every way and to pull us together. And that's why I think that's what you're gonna see over four days. You're gonna see the party come together, and you're going to see excitement around the idea that we can change and be effective and move forward together. I'm very excited about

it myself. So Tom, you've been on the subject of climate for a good long time. I mean, you really are an expert in this area. And I take your point about the plan. How's it gonna plan in Pennsylvania? Just to pick a state which is a key battleground state, and there's a lot of concern, for example, about eliminating fracking.

What this plan does is it's aggressive about a goal for creating clean energy, clean electricity generation by But what it's gonna do is it recognizes that's really aggressive and we're gonna have to get going on day one. But we're also look I said, Joe Biden leads with his heart. He leads with his heart. He cares about people, and he specifically has his heart and soul in the working

people and working families of America. So he is going to make sure that he takes care of union members who are working in industries that can decline or are going to decline. And I think that's absolutely front and center. I've heard him talk about this numerous times, and he never doesn't say that and It's something that is absolutely

front and center for him. And that's why the head of the International Brotherhood of Electrical Workers, Lonnie Stevenson, who heads the biggest energy union in the country, is strongly supporting the Biden Harris ticket because he knows that they are going to create millions of union jobs and are going to take care of union workers in declining industries. And that's not a promise, a you know, end of

the story promise. Oh yeah, we'll do that too. That's front and center in who Joe Biden is and where his heart is, and people can believe it because it's true. Tom This election looks to be different from prior elections in all sorts of ways, but one of them just as the way we vote. And there's the dispute right now over the postal service. You've been very active at getting younger voters out with your Next Gen America project. At the same time, it's gonna be harder to do

that on college campuses this time. How does it change your efforts? Well, David, next Gen America is the largest youth voter mobilization effort in American history. It's eight years old, and you're right in ten in the midterm elections. Next Gen was on over four hundred and twenty college campuses, including specifically community colleges and historically black colleges and universities. We're on zero today. We went a hundred percent virtual

on March ten because of the coronavirus. We believe that our virtual organizing of people between eighteen and thirty five will be more effective than we've ever been. We believe and I personally believe, and that's why I started next Yet, young people voted at half the rate of other American citizens. It's the biggest generation in American history. It's the most

diverse generation in American history. We believe they have the power to trans form this country with their voices and their votes, and we've been trying to give them the tools to do just that. And I believe is going to be the year when they show up in a way that nobody expects and absolutely we're gonna see a youth turnout that beats history, historical records, and absolutely transforms

our politics. That's what I'm hoping for, That's what I believe in, That's what next Gen works for every single day, and I think that they're going to behind be behind the Biden Harris ticket in a huge way. And we're going to see something on November four that we've never seen before, which is a transformation of American society in a completely good way. Tom will those young voters are,

for that matter, voters across the entire country. Will they turn out physically or will they mail on their ballots? And what does the Democratic Party do in a situation where apparently there's increased confusion not clarity over the way our votes will be counted. I think that's overwhelmingly it's going to be vote by mail, David. I don't think there's any question about that. I think that we're gonna people are gonna have to make sure they do it.

They're gonna have to be careful about it. A lot of this is going to be making sure that you put your vote in a position where it for sure is going to get counted. And I know the President is muddying the water and is trying to do things to suppress the vote, obviously, but I believe the American people are smart. I believe will be organized amongst ourselves. The Democratic Party, for sure, we'll be trying to make

sure that we have a democracy. A democracy, the first right in a democracy is for every citizen's equal right to vote. To take that away is shameful and it's not gonna happen. The American people are going to be organized and we're gonna show up. We're going to take back the country, and our votes are going to get counted. That was Tom Steyer, former Democratic presidential candidate, coming up

settling the healthcare debate within the Democratic Party. We talked to former HHS Secretary Kathleen Civilius about the evolution of Biden's healthcare plan. That's next on Wall Street Week on Blindoing. This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio. Healthcare policy has long been a centerpiece for Democrats, even if they don't always agree on what to do about it. Joe Biden was central to former President Obama's

Affordable Care Acts, signed into law on March. If elected Democratic nominee, Biden plans to build on the A c A. The assault on the Affordable Care Act will continue until it's destroyed, taking the insurance away from more than twenty million people, including more than fifteen million people on Medicaid. During the primary season, Progressive Democrats like Senator Bernie Sanders

pushed for an alternative Medicare for all. Joe Biden's plan stopped short of that, while protecting those with pre existing conditions and providing a Medicare like public insurance option. In an effort to lower drug prices, Biden's plan would repeal the current law that bands met to Care from negotiating lower prices with drug manufacturers and would limit price increases

for brand and generic drugs. Kathleen Sebelius served as the HHS Secretary under President Obama and implemented the Affordable Care Act. I asked her about the approach the Democratic Party is taking toward health care policy. Well, David, it's good to be with you, and I think that what you're seeing is sort of an evolving approach that's likely to continue

to evolve, which is good news. Um, there is a unifying principle of the Democratic Party that we saw in the last fifty years, which is a belief that all Americans deserve a right to healthcare. And so medicate and Medicare were passed, the Children's Health Insurance was passed, the Affordable Care Act was pasted, all with Democratic presidents putting a stake in the ground to move further and further

towards universal coverage. I think we're continuing that journey. The campaign basically the primaries halted with covid in in March, and the Biden campaign had staked out a improvement of the Affordable Care Act of solidifying a lot of the issues that the Trump administration has eroded in the last

three years. Even though they couldn't uh managed to repeal the Affordable Care Act, which was one of Trump's promises, they have definitely cut it with a thousand knives um and he also I think staked out a very robust public option plan, lower priced, lower administrative cost option for people to choose in the marketplaces, and a lower age for Medicare recipients to be able to sign onto Medicare, moving the age from sixty five to sixty. So that

was the position in March. Um As you say, for me, Sanders had a Medicare for All war and supported that. Kamala Harris was longer transition but eventually ending up with Medicare for All. Now what we have is a pretty robust Biden plan. On the website, you have a unity document, which is the Sanders delegates and representatives of Joe Biden's

health policy team meeting over a series of times. I'm putting out some proposals that I would say move even further um down the road on a plan for universal coverage and particularly pay attention to the millions of people who have lost coverage because of COVID nineteen. People lose their jobs and they've lost health care. There are states that still have refused to expand Medicaid and they are

still not in huddle to any benefits. So there are plans to again take their careful look at at where we are at the time that the new president has worn in and move as quickly as possible toward not only filling in those gaps, but I think having a robust public option and looking at ways that the individuals who live in states where the politics are preventing people from getting affordable healthcare, they would have a very affordable options.

Do we know how much this will all cost to really buttress Obamacare and move towards make care for all? Are we putting any costs against that and how we're gonna pay for it? Well, I think there are a whole variety of proposals again that we're during the course of the primary that talk about closing some of the tax loopholes, moving UM some of the financial issues that are currently in the private sector into the public sector.

But I think one of the things David, that I would love to see us do as a country, and certainly some of the actuaries do. We all we talk about cost as if it's a net zero game, that if we ensure more people in America, it will cost x amount. What we don't ever do is say how much it costs if we don't move in that direction, if we leave large portions of our population uninsured or underinsured,

what is the cost of that. I think what we're seeing with COVID nineteen and the miserable way this administration has handled this response is there is an enormous cost UH in productivity of our communities in um the opportunity for our economy need to move forward if we don't get health care right. That was former HHS Secretary Kathleen Sibilius coming up dealing with an economy hit by COVID nineteen.

Former Treasury secretary and Wall Street. We contributed to Larry Summers talks about what the economy might look like under a Biden Harris administration. That's next on Wall Street Week on Bloomberg. This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio. More than fifty million people of file for unemployment this year. More than ten million people are gonna lose their health insurance this year. Nearly one

in six small businesses have closed this year. This election year, the economy is taking on new importance as the country struggles to return to work and reopen schools. Former Treasury secretary in Wall Street Week contributed Larry Summers has made no secret of his support for Joe Biden's proposals. We'd be competent again, and we'd care again. We'd have a government that could carry out basic functions based on expertise like all other countries do. We'd have tests that came

back in less than two weeks. We'd have masks for everyone who needed them. We'd have federal government helping uh the States. We'd have um a system that worked. We wouldn't insult um and alienate our allies around the world. We'd be basically competent in the work of government. Whether you had a conservative or whether you had a progressive ideology, and we'd care. We would care about a country that

was still divided by race. We would care about middle class people who literally weren't able to feed their kids because they lost their jobs because of pandemic. We would be fighting to protect people who were unemployed rather than to slash their benefits. We would be fighting to protect the ability of teachers to go a school in safe ways, rather than slashing the budget for UH schools. It's really not very complicated, and fundamentally it's about values that are

pretty universal. Nobody's against being competent, nobody's against caring for all Americans, and those are the things we've lost, and those are the things that Joe Biden has been fighting for for forty some years in public life. Hilarious. Some people you know and I know who are investors, who are on Wall Street, who are in business, might say

competence is great, caring is great. At the same time, we need real growth and the priorities are wrong for Joe Biden because at least Donald Trump put as a priorities growth of the economy. We need that growth. Can Joe Biden bring that back with his competence and his caring. Well, I think we should start with this. If you look consistently for fifty years, sixty years, actually, democratic administrations produced more rapid growth in media and family incomes. Democratic administrations

produced more rapid growth in real wages. Democratic administrations produced lower unemployment. Now you might say that's because they don't care about business, But here's the thing, because building from the middle out is the economic strategy that works. Democratic administrations produced more rapid growth in corporate profits. Democratic administrations

produced better returns for stock market investors. That pattern was first pointed out three decades ago, and it's continued to be true over the subsequent uh three decades, and that will be true with a Biden presidency. Certainly, we're not looking at a strong period for American business with the profit figures we're seeing right now, or a strong period for American labor with the unemployment figures that uh we're

seeing uh right now. So we're gonna see an economic strategy that enables the United States to compete when we alienate every other country in the world. Talking about steel tariffs on Canada, for national security reasons, we are putting it to American exports and putting it to American business. And so the way to help the economy, the way to rescue from problems that have been made by the other administration is George Bill Clinton turned around the mass

that he had inherited. Barack Obama turned around a mess that he inherited. Jimmy Carter inherited a recession. John Kennedy inherited a recession. A commitment to policies that expand the economy from the middle out, going back to f DR that has been uh the commitment of Democratic presidents, and Joe Biden will be in that tradition, and the historical evidence is that it works. And the historical evidence is that the trickle down short status short effort to reduce

the taxes of big donors doesn't work. It produces stock market bubbles that ultimately implode and lead to grave recessions. And that's not the right econom strategy for our country. Larry, help us understand if you can one aspect about Joe Biden's plans. He has some very robust plans where it comes to the climate, infrastructure, education, which will cost the fair amount of money which he owns up to and he talks about taxes the Texas on corporations, Texas on

some wealthy individuals to pay for that. At the same time, he says that we have to be careful at taxes depending on where the economy is. Give us a sense of the sequencing here. Is this gonna be borrowing money until we can afford actually to raise the taxes or will there be taxes from day one? That that's for a President Biden to declare and Congress to legislate, and the answers will depend on where we where the economy

UH is at the time. I'll tell you, though, David, I don't think a sturdy economics is the answer in this moment. We're about to get a huge demonstration of that from the huge fiscal cliff the country is about to go over because the Republicans wouldn't negotiate with UH the Democrats. If we invest in our future, that is taking a burden off my children. It is taking a burden off your children. You know, the interest right after correcting for inflation, is negative. It's below zero in the

United States right now. But when we defer maintenance on our nation's roads, when Leah allow our children to lose intelligence because they have to drink in the water when it takes longer to fly from Boston to Washington than it did fifty years ago because we've screwed up our air traffic control system. When we make those non investments, when we allow those infrastructure deficits, they compound to burden our children much more than some accumulation of paper debt.

So yes, we've got to make the right choices about borrowing money and how much to borrow now, and what ways we should tax those with the highest income. But that's not the important deficit we have in our country. The important deficity we have in our country is that we somehow decided we couldn't afford to invest in having pandemic readiness, and we cut all those programs because people

were fixated on the deficit. The important deficit in our country is we can't afford to buy tests, even though the benefit of each test that we give is probably over a thousand dollars in terms of the costs of UH, the pandemic and the disease UH that is UH that is prevented. Let's focus on the things that are most important, and they are not austerity economics. At a moment of

zero interest rates. They are investing in UH the future, and that is what the Biden program is all about, along with making sure that everybody has a chance to share in that prosperity. Think about it. When it looks like the stock price of some companies might fail or they might not be able to issue debt at a low interest rate, we rush to the rescue with quantitative easy when unemployed people have hungry kids, Congress goes into recess with the enthusiasm of the President. It's not right,

and it's not that hard UH to fix. The profoundly good news for a Biden administration amidst all the problems, David, is that there are huge amounts of low hanging fruit, whether it's in protecting the environment, whether it's in helping kids UH go to college, whether it's in fixing health insurance, whether it's in can you believe it, there were a hundred people with incomes of ten million dollars who didn't file any tax return and the I R S made no effort to go after them a few years ago.

We as a country can do much better than that. All it takes is competency and caring. And that's what I think is uh the core of what this election is gonna be about. Do we want more government like the government we've had for the last four years, or do we want government is competent and cares. We had pandemics and epidemics four years ago, Ebola, it's one and one. They didn't change all our lives. That's what happens when you have competent government, and I think we can have

it again. That was Larry Summers of Harvard. That does it. For this special edition of Wall Street Week, I'm David Weston. This is Bloomberg. See you next week.