The first real changing of the guard is underway in the Biden administration. In the whirlwind span of a single weekend, rumors began to emerge that the president’s chief of staff, Ron Klain, would be leaving the White House. Hours later, Jeffrey Zients had been announced as his replacement.
Chief of staff can be a grueling job, and it’s not uncommon for a change to follow a midterm election. But Klain is by far the highest-profile departure in the upper levels of a Biden White House that has remained surprisingly intact as it enters its third year. He is also the person in the president’s inner sanctum that progressives most feared losing.
Is it a personnel change or a change in philosophy? That remains unclear. But there are plenty of clues in Zients’ background that would indicate he’d take a colder approach to working with progressive groups. He is certainly far from an obvious ally of some of the administration’s top legislative and political priorities.
Zients ascends to the position after a short stint as the White House’s COVID czar. Beltway publications, in hyping Zients’ appointment, have celebrated his handling of the vaccine rollout and his successful resurrection of healthcare.gov from its botched introduction in 2013.
But Zients has also won a number of impassioned critics for his work on the administration’s coronavirus response, including its lack of readiness during the Delta and Omicron waves; muddled and confused messaging on testing and boosters; and a failure to pursue funding for sustained COVID prevention campaigns. Zients left the role after only a year.
Other aspects of Zients’ background make the decision more ponderous. Zients amassed a personal fortune of between $90 million and $440 million working in the private equity world, a sector that the Biden administration has made one of its top opponents, both rhetorically and legislatively, during two years in office. On everything from drug pricing to monopolization to tax policy, the administration has locked horns with the financier class; now the top office will be held by one of the industry’s very own.
And Zients’ record in the private equity sector was not without issue. As the American Prospect reported, Zients’ investment fund, Portfolio Logic, featured multiple firms that paid out multimillion-dollar settlements in cases brought by the Department of Justice alleging the defrauding of Medicare. In 2015, Portfolio Logic “agreed to pay almost $7 million to resolve allegations of fraudulent Medicare and Medicaid billing, involving a subsidiary (Pediatric Services of America Healthcare, or PSA) that it purchased in 2007.” Another Portfolio Logic holding, Amedisys, “settled a similar Medicare and Medicaid fraud suit one year earlier for $150 million.”
That history seriously complicates the supposedly comforting, fast-circulating logic regarding Zients’ tenure—that it will “be much more about implementing [than passing] legislation,” as Semafor put it. Much of the policy that Zients will oversee the implementation of is supposed to curtail the power and profitability of his former colleagues.
The other problem with that framework is that there remains critical, Biden-backed legislation that has yet to pass. One White House–supported bill that looks viable in a Republican-run House is the big-tech antitrust package, which passed the House with bipartisan support last September. Democrats in the Senate and White House were criticized for dragging their feet on the package during the lame-duck session, which they countered by saying they could pick it back up in the new Congress.
Zients’ background, again, does not make him an obvious ally to this legislation. In May 2018, two months after the Cambridge Analytica scandal broke, Zients agreed to join the Facebook board of directors. He served a two-year term before stepping down in 2020.
The final, and perhaps most significant, concern with Zients is his public-sector background from his time with the Obama administration. Zients served as acting Office of Management and Budget director from 2012 to 2013, spearheading the Obama administration’s negotiations over the “fiscal cliff,” when Republicans were threatening a debt ceiling breach.
Around that time, the Wall Street Journal reported that Zients had become “ambassador to the business community,” and “one CEO thought he was a Republican.” The Obama administration’s handling of the fiscal cliff, coincidentally, resulted in huge, unnecessary giveaways to Republicans, and remains widely seen as one of the administration’s lowest moments. Zients’ brinkmanship was right at the center of that disaster.
As Republicans threaten yet another breach of the debt ceiling, the Biden administration has so far refused to negotiate, claiming to have learned its lesson from before. That’s a hopeful sign for Democrats, and perhaps Zients will join the chorus of Obama-Biden veterans pledging not to make the same mistake twice. Another plus: Anonymous sources have praised his project management skills.
The short list that Zients was chosen from for the role exclusively featured the usual suspects of Bidenworld, including lobbyists, bundlers, and advisers who have battled with progressives in the past. Regardless of whether this decision augurs a change in policy, it’s a reminder of what hasn’t changed for the president. “At the very least, it’s a real failure to think outside of the box,” Jeff Hauser, founder of the Revolving Door Project, which has been among Zients’ most vocal critics, told me.