Here in Washington, D.C., April still feels like February.
February 2009, that is. That’s because the partisan chill in Congress has kept much of President Obama’s agenda frozen in place over the past 14 months.
What, if anything, can the President do to carry out his policies when he faces a Congress unwilling or unable to follow his lead? One option would be to leverage his appointments to cabinet departments and regulatory agencies like the Department of Energy, the Food and Drug Administration and the Securities and Exchange Commission.
Since taking office, Obama has populated these agencies with people who share his vision. Now, through direct and indirect influence, he can put these officials to work to regain his policy momentum.
Energy policy—essentially the forgotten child, thanks to the histrionics over health care in Congress—is a prime example. Through his appointments and rhetoric, Obama has elevated the DOE to major-department status. Repeatedly, he has emphasized the role that emerging companies in the energy and clean technology sectors must play in reshaping the U.S. economy, ending the country’s dependence on foreign oil and battling climate change.
While the DOE can’t pass an energy bill, it can help growing companies play this role in the short and long terms by pursuing favorable regulatory policies, providing government-subsidized loans and funding the basic research and development from which their innovations spring. Doing so would send a strong signal to investors and provide additional incentives to entrepreneurs in these sectors.
Improve Health Care Without a Vote
Since taking office, President Obama has populated [major federal] agencies with people who share his vision. Now, through direct and indirect influence, he can put these officials to work to regain his policy momentum.
The Obama Administration can also take major steps to check or reduce health care costs without recruiting a single vote in Congress. The president’s appointees at the FDA can initiate efforts to streamline the pre-market approval process for cutting-edge medications and devices. The long timelines and uncertainty that plague the current process drive up costs for innovative companies—costs they must then pass on to the marketplace to recoup their time (often 10 to 15 years) and expenditures (typically hundreds of millions of dollars) for a single product.
This streamlining does not have to come at the expense of consumer safety, which Obama has emphasized as paramount. Nobody is asking for a rubber stamp for every promising treatment or technology that comes down the pike. Rather, all that young companies and their investors require is a clear and reasonable path—free of bureaucratic snafus and overlaps—to the marketplace and, where applicable, reimbursement. Innovation simply can’t move forward efficiently without one. By creating such a path, the FDA can remove some of the needless risk of the current process, and with it, some of the costs to consumers.
Not surprisingly, most financial reform discussions so far have focused on the SEC’s role in policing the markets, whether it’s for instability, conflicts of interest or fraud. While these discussions play out in Congress, officials at the SEC, an independent regulatory agency now staffed with Obama appointees, should focus on another of the SEC’s traditional missions: creating a favorable environment for emerging companies to go public.
Sadly, the moribund IPO market in recent years—brought about in part by regulations intended to check large corporations—has created a logjam of young companies starving for capital with which to grow. By right-sizing these regulations with an eye toward helping emerging companies go public, the SEC can play a major role in expediting the recovery of the capital markets.
Of course, the thread that ties all of these initiatives together is job creation. When emerging companies grow, they add staff and stimulate demand throughout the economy. If Congress can’t agree on this as a good thing, we’re in more trouble than we thought. Fortunately, if federal agencies do their parts, we won’t have to wait for Democrats and Republicans in Congress to break the ice to achieve it.
Mark Heesen is president of the NVCA and may be reached at email@example.com