The fact that the US presidential election has featured remarkably little content is not because Hillary Clinton has failed to put forward an array of substantive policy ideas. There are many sensible proposals on the Democratic nominee’s website — and unfortunately they are likely to remain there even if she wins.
Mrs Clinton’s policy proposals would make the tax code noticeably more progressive by raising the top marginal tax rate; increase access to free public higher education; raise the federal minimum wage; expand access to Medicare; and guarantee up to 12 weeks of paid family and medical leave. None of which has a remote chance of attracting a majority of Republicans in the House of Representatives, who are likely to retain control even if Mrs Clinton wins.
So, barring a Democratic landslide, the real question then becomes what a President Clinton could get done with House Speaker Paul Ryan.
Some items are vital to keep the government functioning. The federal debt limit, for example, will need to be lifted again by the middle of 2017. The discretionary part of the budget, which funds everything other than programmes such as Medicare, Medicaid and Social Security, requires legislation each year to avoid government shutdowns. Other items are more challenging. Funding for the Children’s Health Insurance Program, which provides coverage to 6m children a month, expires next year. And some legislative amendments are necessary for the Affordable Care Act.
What, then, are the prospects for new initiatives in a Clinton administration? Perhaps the most promising is large-scale infrastructure investment. The case is strong: interest rates are low; airports, roads and bridges need to be maintained and upgraded; and the spending could boost sluggish growth.
Mrs Clinton has therefore proposed $275bn in new infrastructure spending over five years, $250bn in direct federal spending and $25bn to set up an infrastructure bank. The question is how to finance this spending.
Deficit financing may be sensible but is anathema to House Republicans. So additional revenue from corporate income tax is commonly proposed. And that is where things become difficult.
There is some bipartisan agreement — for example, that profits already accumulated overseas by US companies should be subject to a tax rate well below the statutory 35 per cent, regardless of whether those profits are repatriated. But there is little consensus on whether such a tax should also apply in future and what the rate should be.
Reaching agreements acceptable to both House Republicans and members of her own party, though not impossible, will not be easy. Indeed, when I recently asked him, Mr Ryan seemed uninterested in additional infrastructure spending, arguing Congress had just enacted legislation to extend funding for highways. And Democrats would not accept a tax rate in single digits, let alone zero, on future foreign corporate profits.
To create room for the necessary compromises, Mrs Clinton would do well to avoid too many fights with her own party about whom she appoints to her administration. Some senior congressional Democrats on the left are already preparing to oppose “hell no” candidates who have worked in finance. If Mrs Clinton largely defers to them, however misguided their approach, she may end up with more flexibility to negotiate later with a Republican Congress.
Beyond an infrastructure push, a President Clinton will probably have the most success where she can proceed without new legislation. Companies would thus be wise to read her comments about antitrust enforcement closely. Most of Mrs Clinton’s other policies, whatever their merits, are likely to remain mere talking points.
The writer is vice-chairman of investment banking at Lazard
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