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Human Capital: Elizabeth Warren, Treasury Secretary?

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Welcome back to Human Capital! After the Democratic National Convention last week— and former Vice President Joe Biden’s official nomination as the party’s candidate — buzz is also swirling around Sen. Elizabeth Warren, D-Mass., and what role she may play in a Biden administration, if there is one.

Given her financial regulatory acumen, would Warren be picked as Treasury secretary? How about director of the Consumer Financial Protection Bureau — the controversial agency she helped create? Also, what would the regulatory environment look like under a Biden administration?

Brian Knight, senior research fellow and director of Innovation and Governance at the Mercatus Center at George Mason University, weighs in with Human Capital on whether Warren would even want those posts. He points out: If Biden wins, the Senate flips to Democratic control and the House stays that way, Warren “may have a lot more power in dealing with financial issues by staying in the Senate.”

Keep scrolling to see more of Knight’s comments on Warren’s potential new job prospects as well as views on Biden’s regulatory stance from Aaron Cutler at Hogan Lovells.

During her speech Aug. 19 at the Democratic National Convention, Warren strayed from her usual “crackdown on Wall Street” message, focusing instead on child care and praising Biden’s plans to increase Social Security benefits, cancel millions in student loan debt and “make bankruptcy laws work for families.”

As to potential Biden administration posts, secretary of the Treasury “makes the most sense,” Knight opines. While not a primary regulator, in terms of regulatory policy Treasury “does a lot of work” in that area along with “facilitating the administration’s view and interacting with Congress.”

Treasury secretary would be the “capstone, most prestigious position” for Warren, according to Knight.

As to Biden’s regulatory focus, “financial regulation will be one of the targeted sectors for a robust increase,” said Aaron Cutler, a partner in the Government Relations and Public Affairs practice at the global law firm Hogan Lovells.

The CFPB under Biden would “become very active again,” with “many new regulations and increased enforcement activity” likely on tap, Cutler said. There’d also be “an uptick” in regulatory activity at the SEC.

Changes in tax policy, namely a financial transaction tax, “could be put on the table and implemented as a revenue raiser,” Cutler says. Plus, the corporate tax rate is likely to be raised “especially if Democrats were to win the Senate” along with a Biden victory.

“As part of a tax increase, it is easy to see Democrats targeting individuals making over $500,000 year, which would particularly impact those in the financial services sector in New York.”

Investigations by regulators as well as lawmakers would also spike, Cutler adds, as Democrats pivot their eyes from the Trump administration back to “their core policy issues” — like Wall Street and private equity.

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