April 12, 2024

Biden and corporate America? It’s complicated.’

In the days before delivering his State of the Union address last month, President Biden called the CEOs of General Motors and Cisco Systems to ask for their advice on the state of the U.S. economy and how he planned to talk about it .

He then drove to Capitol Hill and promised in his speech to raise the rate of a new minimum tax his administration has imposed on big corporations “so that every big company finally starts paying its fair share.”

“I also want to end the tax breaks for Big Pharma, Big Oil, private jets and the massive executive salaries,” Mr. Biden continued, adding, “End it now.”

The series epitomizes Mr. Biden’s alternately cozy and combative relationship with America’s business leaders, which has permeated the national economy, federal policy and now the 2024 campaign for the White House.

The president has both courted and pilloried corporate America as he sought re-election this fall. Business leaders have made record profits under his watch and had an open connection with his administration, but they have resisted some of his biggest policy decisions.

There is a certain symbiosis with business leaders in much of Mr. Biden’s economic agenda. His industrial policy initiatives rely heavily on corporate tax incentives, which he is defending nationally through ribbon cuttings: The climate and advanced manufacturing laws that Mr. Biden signed in 2022 provide major tax cuts for companies investing in semiconductor and solar panel manufacturing . and other strategic goods. Republicans have derisively called these incentives “corporate welfare.”

Mr. Biden regularly seeks advice from executives on a wide range of economic issues, including supply chain issues, infrastructure investments and worker training. He impressed Calvin Butler, the CEO of utility Exelon, during a two-hour meeting with executives in the Oval Office last fall.

“He was working on it, and I can tell you this,” Mr. Butler said in an interview. “Around the hour mark, they kept tapping him to say, ‘Hey, you know, we have other things to do.’ But he wanted to continue it. He wanted to keep talking.”

As he seeks re-election, however, Mr. Biden has leaned heavily on populist attacks on the executives and companies he has implicated. He likes to talk about raising corporate taxes. He has also blamed big companies, sometimes by name, for raising the prices of certain consumer goods. He condemns others for reducing portion sizes of snacks, such as candy bars, without lowering their prices.

Mr. Biden has also brought to power an economic philosophy that relies heavily on federal government intervention in private markets. That includes investments in infrastructure and industries, which business leaders generally support.

But it also includes environmental, financial and other regulations intended to reduce risks in the marketplace. Companies are resisting these efforts, as well as the government’s aggressive antitrust enforcement and other initiatives designed to boost competition.

As a result, Biden’s relationship with corporate America is “complicated,” said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, a major business lobbying group in Washington.

Mr. Biden and his economic team have been open and thorough in their outreach to business groups, Mr. Bradley said, but frustrating in their policy choices. Chamber officials calculate that federal agencies under Mr. Biden have issued about twice as many regulations deemed “economically significant” — currently defined as having an annual impact of at least $200 million on the economy — as they did under President Donald J. Trump.

It’s a stark contrast to Mr. Trump, whose administration was less consistent in its outreach and moved chaotically from crisis to crisis, business leaders say. Mr Bradley said executives were unsure about the combination they preferred.

“You can look at a Trump administration with a lot more uncertainty, but in the direction of regulation, the effort has been to alleviate regulatory costs,” he said. “Here in the Biden administration, we have a pretty good idea where they’re going — it’s just how crushing is it going to be in terms of the level of regulation? And so, interestingly enough, there are a lot of people who say, “The chaos is better.”

Mr. Biden speaks regularly with leaders of major corporations and small businesses, and he has visited dozens of companies during his time in office. Executives who have spoken with the president and his aides say they are listening seriously to companies’ concerns, even as Mr. Biden and his team make clear they disagree on the policy issue at hand.

Exelon’s Mr. Butler said he had urged Mr. Biden in the White House to take faster action to resolve permitting issues and other hurdles to building new energy infrastructure. Mark Cuban, the famed investor and founder of Cost Plus Drugs, said in an email that his conversations with Mr. Biden focused largely on health care, including what he called the “great job” the president had done to bring Medicare to to negotiate. lower prices for prescription drugs.

Microsoft CEO Brad Smith said in an interview that he had spoken with Mr. Biden about implementing his infrastructure bill and the CHIPS and Science Act, along with regulating artificial intelligence. He praised Mr. Biden’s efforts to strengthen cybersecurity, saying he has “done more during his presidency than any president has ever done” in this area.

Mr. Biden’s staff, Mr. Smith added, “has broad expertise that is applied at a deep level.” Under Trump, “the staff was leaner,” he said. “There weren’t that many people in many important jobs.”

Other executives have criticized Biden’s policies in whole or in part. Oil and gas company executives have denounced a government pause on licensing new natural gas export terminals. Jamie Dimon, the CEO of JPMorgan Chase, called Mr. Biden’s climate law and other green energy initiatives “inflationary” in an interview with CNBC this year.

Ken Griffin, the founder of the financial firm Citadel and a major Republican donor, ridiculed Biden’s economic tone in a Bloomberg interview in November. “Whoever told him to use Bidenomics has no idea how to read an economics textbook,” Mr. Griffin said.

Biden’s outreach to executives is similar to the approach taken by President Barack Obama and his team, according to business leaders and government officials who also served under Mr. Obama.

But Mr. Biden differs from Mr. Obama — and Mr. Trump — in several ways. Executives who have spoken with him say the president makes clear in conversations that he is a “blue-collar man” who measures economic success in part by creating well-paying union jobs. He has embraced robust federal oversight of mergers and other antitrust issues to a degree that even Mr. Obama did not.

He also has deeper policy entanglements with corporate behavior. Biden’s climate agenda combines corporate tax softeners on domestic manufacturing with a strict wave of regulations intended to rapidly reduce fossil fuel emissions. In some cases, agencies under Biden have softened some regulatory proposals in their final form — explicitly, administration officials say, to address industry concerns.

Lael Brainard, leader of the White House National Economic Council, said in an interview that the president’s targeted corporate tax breaks depart from a Republican philosophy that “encouraged blanket tax breaks for companies regardless of whether they made investments.” that are good for America, generate jobs and help with a clean energy transition.”

Democratic pollsters are encouraging Biden to amplify that message in his re-election campaign. They want him to emphasize his plans to raise taxes on big corporations, while calling on companies to raise prices to boost profits and saddle customers with “junk fees” for things like concert tickets. Their data suggests that corporate taxes are a key vulnerability this fall for Mr. Trump, who cut corporate tax rates while in office and will face Mr. Biden in a rematch in 2020.

Voters “want to feel like the president is on their side against people they think are pressuring them,” said Evan Roth Smith, the chief researcher for the Democratic group Blueprint. “Voters have no sympathy for big business right now,” he added.

Mr. Bradley of the U.S. Chamber of Commerce said many executives were annoyed by that language, and in particular by Mr. Biden’s practice of calling out companies by name for raising prices or reducing portions. But some executives dismiss or downplay Biden’s tax proposals — and repeated calls for companies to pay their “fair share” — as campaign bluster.

“When I realize how DC works, and that we are in a political season, I tend not to go too high or too low on that,” Mr. Butler said.

Microsoft’s Mr. Smith said this was a point of contention in an otherwise positive relationship with the president.

“We won’t be the first company to agree to tax increases,” he said. But, he later added, “I think our tax rate is so high that our first reaction is usually that he’s talking about someone else.”

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