President Trump has faced a lot of questions about whether he will commit to a peaceful transition of power and admit his defeat if he loses the upcoming presidential election. He has been reluctant to answer them — he doesn’t seem to like contemplating the fact that he could lose, and he’s eager to suggest that any loss would mean he was treated very unfairly — though he did finally allow a “Yes, I will, but I want it to be an honest election” in his town hall with NBC’s Savannah Guthrie on Thursday.
There has been less discussion, however, about a question that worries me more: What if Trump loses the election and is all too eager to give up power? Throughout his term, Trump has treated governance as a chore — not the reward for a successful presidential campaign but the necessary slog to get to the next one. So if and when Trump is a loser with no campaigns left to run, the pathetically defeated caretaker of a government that’s about to be handed over to Sleepy Joe Biden, what’s to stop him from ceasing even the most perfunctory performance of the duties of office and moving down to Mar-a-Lago in time for Thanksgiving? We live in complex times. A potential Biden administration would be picking up a coronavirus response with many complex parts. What if Trump’s participation in that transition process were so peaceful as to barely exist at all?
Of course, we had a presidential transition in the middle of an acute policy crisis not long ago: In 2008 and 2009, as George W. Bush handed power to Barack Obama, he also handed over the reins to a freewheeling policy response to an acute financial crisis. That transition started before the election, with John McCain’s “suspension” gambit that forced both himself and Obama back to Washington to negotiate rescue terms with the Bush administration and congressional leaders. Bush and Obama officials worked mostly collaboratively, despite their political differences, through the late stages of the campaign and into the transition. In fact, one sense you get from CNBC’s 2018 documentary Panic: The Untold Story of the 2008 Financial Crisis is that Bush’s team found McCain’s campaign antics around the financial rescue so exhausting they were relieved to end up working with Obama instead.
Jason Furman, a top economic adviser to the Obama campaign and an incoming economic official in the Obama administration, described a Bush team that was exemplary in its collaboration and openness as it sought to hand off the crisis response. But Furman isn’t sure that was the most important thing.
As he describes it, the most important thing the Bush team did in the transition wasn’t in how it worked with the Obama team but in how it kept the lights on as the Obama team waited to take over. The Troubled Asset Relief Program was passed in the last weeks of the 2008 campaign — thanks in part to Obama’s lobbying for Democratic votes in Congress — but contrary to the TARP name, having the government purchase troubled assets wasn’t likely going to be a workable way to save the financial system. During the transition, it was the Treasury Department, led by Bush appointee Hank Paulson, that implemented TARP as a program of lending to financial institutions to protect their solvency. The Bush administration also used TARP to make a bridge loan to GM and Chrysler in its final days, keeping them afloat long enough for Obama to make a more permanent decision about how to save the auto industry.
“Had we not been on speaking terms between Election Day and January 20, I don’t know how much would have gone differently,” Furman says. “My big fear wouldn’t be that [Trump] won’t talk to Biden or won’t talk to whoever. My big fear is that he just burns down the house or ignores the house and it burns.”
So what are the governance challenges that mean we won’t want a Trump administration asleep at the switch through the transition? One is that another round of coronavirus relief is necessary now and will continue to be necessary if it hasn’t been passed before the election. Trump has already been lackadaisical in his efforts to get Republicans in Congress to approve another round of relief, and it’s hard to see him being more engaged in that project if he loses the election. The president has, when so inclined, been somewhat successful at finding ways to use executive authority to provide economic relief — for example, repurposing disaster-relief funds to partially extend the enhanced unemployment benefits that expired at the end of July. But if the president is checked out and no longer sees political advantage in boosting the economy, he could refuse such steps during the two and a half months of transition, just as Bush could have pushed GM and Chrysler into insolvency if he had been so inclined. So one major risk of the transition is weak federal support for the economy.
Then there are the public-health challenges. Trump has been pushing the FDA — with mixed success — to move in various directions on drugs and vaccines, mostly in an effort to speed their availability, or at least their announced approval. In theory, Trump could start putting his finger on the scale in the opposite direction; he could also continue to try to interfere in CDC recommendations about public health. But I’m not that worried about this prospect, because Trump’s interventions in public-health policy have already been of such poor quality. To the extent that he gets bored of interfering with these agencies, he’s likely to make it easier for them to do their jobs well and to work with the incoming Biden team. This is a major contrast with the economic aspects of the coronavirus response, in which Trump’s governing actions have often been a major net positive, most notably his push for Republicans in Congress to support the CARES Act in the spring.
Even in the economic-relief area, there’s a saving grace for the transition, which is that the CARES Act was really big. The relief payments were large enough that household balance sheets improved materially through the crisis — in April, American households saved one-third of their after-tax income — and payments received in the spring and summer are still supporting household finances and consumption today. Since the tapering of economic relief, consumer confidence has continued to rise, and retail sales have beaten expectations. So there is some gas still left in that tank. And if Biden wins a clean victory with a Democratic congressional majority, he’ll be able to start making promises about economic relief to come — promises that can support the economy right away by giving liquid businesses and households the confidence to spend money they have.
This isn’t a perfect solution. A lot of people are still out of work, and a lot of households don’t have the enhanced financial cushion that the average household does; they may not find the promise of relief funds to come in February very helpful in November. But the key difference from 2008 is that the economy is growing, not teetering on the brink, and there’s no equivalent of a prospective GM bankruptcy that would doom Biden’s agenda to renew the economy if relief is delayed until early next year. So while a cooperative handoff would be ideal, I believe Biden would be able to make matters work even if Trump were to hide in a cave starting a few days after the election.
