A Year After Ending Her Presidential Bid, Warren Wields Soft Power in Washington

WASHINGTON — At Adewale Adeyemo’s confirmation hearing last month, Senator Elizabeth Warren pressed the deputy Treasury secretary nominee to commit to using the department’s regulatory powers to scrutinize the private equity industry, which she said posed a risk to low-income communities when buyout firms strip companies of assets, load them with debt and fire workers.

Ms. Warren, a progressive Democrat from Massachusetts, has been a mentor to Mr. Adeyemo, who served as her chief of staff when she was establishing the Consumer Financial Protection Bureau a decade ago. But when he gave a noncommittal answer, she did not let him off the hook.

“I don’t think you should waver about this,” Ms. Warren said emphatically. “Treasury should not be a bystander in this.”

The exchange underscored Ms. Warren’s role in the new Washington, where the Biden administration and congressional Democrats control the levers of power. A year after ending her own presidential bid, and with her aspirations of becoming Treasury secretary unfulfilled, Ms. Warren now wields influence in her own way. She has shepherded a pipeline of progressive former staff members into powerful jobs across the government, and she releases a steady stream of legislative proposals that have kept her progressive ideas at the forefront of the policy conversation.

Two months into the Biden presidency, it is not yet clear how much Ms. Warren’s sway will yield in terms of policy results. But many of her ideas for raising trillions of dollars of revenue by taxing the wealthy and big corporations will soon take center stage as the Biden administration and Congress consider ways to pay for the multitrillion-dollar infrastructure plan that they hope to pass this year.

Marcus Stanley, the policy director of Americans for Financial Reform, an advocacy group, said the upcoming infrastructure and jobs legislation would be a real test of Ms. Warren’s influence.

“We probably have a big bill coming up in the next couple of months, so when you talk about winning the policy fights, we’re going to see there,” Mr. Stanley said.

If personnel is policy, as Ms. Warren likes to say, then she is winning so far. Many of the top officials and senior staff members at the nation’s most powerful economic policymaking and regulatory agencies are ideological allies who have been groomed by Ms. Warren.

In addition to Mr. Adeyemo at the Treasury Department, Ms. Warren has worked closely in the past with Bharat Ramamurti, the deputy director of the National Economic Council, and Rohit Chopra, President Biden’s nominee to lead the Consumer Financial Protection Bureau.

The impact of the hires can be seen in the progressive tilt of the $1.9 trillion economic relief law, which dismissed concerns about deficits and focused heavily on poverty reduction. Ms. Warren and her allies hope that having strong advocates for progressive views within the administration will help those ideas find purchase in a White House that thus far has been more open to tacking to the left than previous Democratic administrations.

But it remains to be seen how far the Biden White House is willing to go, particularly with regard to tax increases, which is an area where the two former candidates disagreed.

Although she has been off the campaign trail for more than a year, Ms. Warren has been reviving proposals that she promoted in Iowa and New Hampshire.

This month, Ms. Warren and two House Democrats introduced legislation for an “ultra-millionaire tax” that is modeled after what she proposed as a candidate. The 2 percent annual wealth tax on the net worth of households and trusts valued at $50 million to $1 billion was unveiled with polling data to back up its popularity and letters supporting its constitutionality.

This week, Ms. Warren plans to pitch new legislation to increase taxes on big companies. Her “real corporate income tax,” which was also part of her campaign platform, would require the most profitable companies to pay a 7 percent tax on their annual book value — the earnings that they report to their investors but not the Internal Revenue Service — above $100 million. The idea, which is similar to a proposal that Mr. Biden put forward during his campaign, is intended to stop companies from using accounting loopholes to lower their tax bills.

When it appeared that Democrats were likely to lose the Senate after the 2020 election, some industry groups were relieved that Ms. Warren would not become the Treasury secretary. These days, however, they acknowledge that they are watching her moves closely.

“Senator Warren is certainly well positioned to have an outsized influence in the Senate and the administration,” said James Maloney, a managing partner of Tiger Hill Partners, a public affairs firm focused on financial services. “Every item that she’s focused on should be a focus area for the industries whose policies can potentially be impacted.”

Mr. Maloney, whose firm represents some private equity companies, noted that allies of Ms. Warren were spread across the Biden administration. He said businesses were closely watching the letters that Ms. Warren sends to regulatory agencies and the responses she receives.

Mr. Biden has so far not been persuaded by her argument for using executive authority to waive student debt. And the White House has given mixed signals on Ms. Warren’s wealth tax.

Treasury Secretary Janet L. Yellen, whose nomination Ms. Warren supported, has expressed skepticism about the feasibility of putting a wealth tax in place. Ms. Yellen’s recent hiring of Natasha Sarin, a protégé of Lawrence H. Summers who has been skeptical about how much revenue a wealth tax would generate, to join her economic policy team raised eyebrows among some in Ms. Warren’s orbit.

In an interview, Ms. Warren said she was heartened by the early returns of the Biden era after four years of President Donald J. Trump’s deregulation and tax cuts.

“People like progressive ideas and want to see them enacted,” Ms. Warren said. “That’s going to happen. Washington is beginning to catch up.”

She said she planned to have a private conversation with Ms. Yellen about how to establish the tax.

“If that’s her biggest problem then we’re good,” Ms. Warren said. “It’s easy to implement. We just need to sit down and talk about it.”

Ms. Warren acknowledged that helping to seed federal agencies with progressives was part of her strategy of making her policies happen. She said she made her staffing recommendations to the White House privately and repeated her refrain that “personnel is policy.”

During the 2020 primary campaign, Ms. Warren and Mr. Biden appeared to be at opposite ends of the Democratic Party’s ideological spectrum. But their shared interest in uplifting the middle class and reducing income inequality has helped forge a strong working relationship.

Jeff Hauser, the director of the Revolving Door Project, suggested that Ms. Warren’s ties to former Senator Ted Kaufman, Mr. Biden’s longtime Senate chief of staff who led his presidential transition team, had helped her steer many of her acolytes to important jobs. In 2008, when Ms. Warren was a Harvard Law School professor, she was appointed to join a congressional panel that was overseeing the $700 billion Troubled Asset Relief Program. When she left that job to stand up the consumer protection bureau, Mr. Kaufman replaced her and continued her rigorous oversight work.

Allies of Ms. Warren say she is playing the long game with policy proposals such as the wealth tax, nudging them from European fringe ideas to the political mainstream in hopes that Democrats will have the votes to pass such legislation sooner rather than later.

“She’s doing what she always does, which is going person by person in the Senate, person by person in the administration, explaining policy advantages, explaining the political advantages, making the case,” said Mike Lux, a Democratic political strategist and a friend of Ms. Warren’s.

In the meantime, Ms. Warren feels a sense of relief after four years of being on defense. On the day she voted to advance Mr. Chopra’s nomination to lead the consumer bureau, she reflected on how different his tenure would be from that of Mick Mulvaney, whom Mr. Trump appointed to neuter the agency in 2017.

Mr. Chopra helped Ms. Warren establish the bureau and worked for five years as its assistant director and student loan ombudsman. Mr. Mulvaney tried to cut its funding and scrambled its acronym out of spite.

“Mick Mulvaney was doing everything he could to try to undercut the consumer agency, and he made no secret about that,” Ms. Warren said. “Now there’s someone who will be in charge of the C.F.P.B. who sees the need for a level playing field and a fair set of rules and who has the backbone to get in there and make it happen.”