February 26, 2024

By Thomas Dee, Capstone’s Head of Research & Strategy

Much of the political buzz recently has been about former President Trump—whether it’s been his $355 million civil fraud verdict, his criminal trial set for March, or his clean sweep of the first four Republican primary states on what seems to be an inevitable march to the Republican nomination. Less attention has been spent on a second Biden term and what it would mean for public policy. Current polling pegs Trump as a slight favorite in a rematch of the 2020 Presidential election. However, incumbent presidents have won three of their last four bids for reelection, and the sole exception was, of course, President Biden’s likely opponent—Trump.

At Capstone, we believe there would be several notable dynamics in a Biden 2.0 presidency across a number of sectors and industries, including energy, chemicals, tech, financial services, and healthcare that companies and investors should be thinking about. 

The throughline across sectors would be a focus on implementation, as several of the administration’s regulatory shifts won’t begin to bite until at least 2025.

The throughline across sectors would be a focus on implementation, as several of the administration’s regulatory shifts won’t begin to bite until at least 2025. In many areas, we expect the administration would be emboldened, pushing for even more sweeping regulatory (and, when possible, legislative) changes across sectors. We also expect a wave of litigation as industry and political interests challenge the administration’s increasingly ambitious rulemaking.

In the Energy and Chemicals sectors, we expect Biden would renew the push for permitting reform to maximize the tax credits for clean energy deployment. We believe the administration would focus on implementing new drinking water standards for PFAS, the so-called “forever chemicals.”

We believe the Financial Services sector would see tighter bank regulation, enforcement of the effort to protect retirement savers known as the “fiduciary rule,” a revamped consumer protection agenda, and efforts to reduce mortgage closing costs. Most notably for large banks, we believe a second Biden term would mean the Basel III Endgame would likely be implemented, increasing large bank capital requirements by as much as 20%.

The Healthcare sector would continue to see pressure on providers, continuing the current pressure from the Centers for Medicare and Medicaid Services (CMS) and other regulators. We also foresee more pain for Medicare Advantage (MA) insurers, implementation and expansion of the drug pricing provisions in the Inflation Reduction Act (IRA), and likely extension and/or enhancement of the Affordable Care Act (ACA) subsidies.

In the Technology, Media, and Telecommunications (TMT) sector, we believe a second Biden term would see increased Federal Communications Commission (FCC) enforcement, a revamped antitrust push from the Federal Trade Commission (FTC), a focus on children’s online well-being, and more ambitious crypto enforcement efforts.

Democrats have an uphill battle in maintaining Senate control…Unified control of Congress could make more sweeping legislative changes possible.

The scope of what can be done will be heavily influenced by the control of Congress. Democrats have an uphill battle in maintaining Senate control, which means that “Biden 2.0” could have to grapple with split control of Congress. In such a scenario, Biden would have to lean on administrative reforms through the regulatory agencies, as has often been the strategy in his first term. Many of these rules will face legal challenges. Unified control of Congress could make more sweeping legislative changes possible.

As always, the devil will be in the details. The interplay between the various political dynamics shouldn’t be taken for granted. At Capstone, we will continue to closely analyze how a second term for President Biden would drive US policy, and its implications across sectors.

---