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Despite the Chamber’s Claims, a Wall Street Sales Tax Would Fall on Wall Street High Rollers, Not Average Citizens

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Almost exactly 11 years ago, Wall Street’s reckless behavior crashed the nation’s economy, devastating the lives of millions. Now, the rules put in place after the financial crisis to stop bank “gambling” in the stock markets are being weakened by through deregulation and speculation is still rampant on Wall Street. Additionally, Big Banks are making record profits while the rest of the country still continues to struggle. The system is rigged, and the U.S. Chamber of Commerce would like it to stay that way.

On Monday, the Chamber released a new report taking aim at legislative proposals to implement a financial transaction tax. The report misleadingly says that ordinary Americans would suffer the brunt of its effects. As is typical of the Chamber, this argument hides its agenda of protecting wealthy and powerful interests behind hollow rhetoric of safeguarding the ‘little guy.’

The idea behind a proposed financial transaction tax or FTT (also called a Wall Street sales tax or Robin Hood tax) is to levy a small fee—just a fraction of a percent—on Wall Street trading of stocks, bonds, and derivatives. In the proposed Wall Street Tax Act of 2019 (S. 647/H.R. 1516) for instance, trades would be taxed at a rate of just 10 cents per every $100 traded.

An FTT would have the dual aims of taking a step toward having Wall Street pay its fair share of taxes, as well as curbing bad behavior on Wall Street, such as dangerous high-frequency trading. These computer programs trade thousands of stocks per second based on  algorithms and they currently account for over half of U.S. trading. High-frequency trading could lead to another financial catastrophe if not curbed—for example, they were a primary cause of the May 2010 “flash crash.” And, high-frequency trading is rightfully being blamed for worsening recent market disruptions.

There are other important arguments for a financial transaction tax as well. For one, ordinary people pay sales taxes on most kinds of goods and services, but arbitrarily, no such tax applies to purchases of financial securities. Nonpartisan research from the Joint Committee on Taxation shows that at a rate of just 10 cents per every $100 traded, such a tax would raise an estimated $777 billion over 10 years, which could be used to help rebuild Main Street and invest in programs that working families need.

The Chamber’s report claims that an FTT is “a tax on investors” and that “Main Street will pay for the tax, not Wall Street.” This claim is unfounded. As Public Citizen’s recent report shows, only about half of U.S. families would likely experience any costs at all from a WSST because only about half of U.S. families have retirement accounts. Furthermore, this report demonstrates, a WSST would be a progressive tax:

Perhaps the most deceptive argument the Chamber makes in its report is its assertion of the myth that an FTT will mostly be paid by retirement investors. The truth is that a Wall Street sales tax would only cost the average middle-income family with a retirement account about $13 a year and even among upper-income families, the tax’s effects would hardly be onerous. Further, because reduced volume would reduce mutual funds’ overhead costs, retirement investors could  potentially net savings from an FTT.

An FTT is not merely a theoretical policy, either; it has numerous tried-and-true precedents. The United States has had such taxes in the past, and even today, the Securities and Exchange Commission charges a tiny fee on securities transactions to help finance the Commission. Beyond this, 40 countries have implemented an FTT and the idea is supported by a broad range of prominent thinkers on both sides of the aisle, including Nobel-Prize-winning economists; former heads of Treasury, Federal Reserve and other agencies; financial professionals; and even billionaire business magnates.

These many benefits of taxing Wall Street trades may not persuade the U.S. Chamber of Commerce, devoted as it is to protecting the profits of corporations no matter the cost to society. But they should convince our lawmakers. We must take action today to unrig our tax code and build a society that works for all Americans, not just the wealthiest few.

Please tell your U.S. Representative and Senators to pass the Wall Street Tax Act (S. 647/H.R. 1516) and the Inclusive Prosperity Act (S. 1587/H.R. 2923).

U.S. Chamber Watch is a project of Public Citizen. If you’d like to learn more about the Chamber, you can always visit us on www.chamberofcommercewatch.org or follow us on Facebook and Twitter.

illustration of secretive figure on top of money

The U.S. Chamber of Commerce Doesn’t Want You To Know Who Owns U.S. Businesses

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Do you know who owns the corner store in your neighborhood? How about the local plumber or woodworking business? Almost certainly, the answer is that the founders of these small businesses are the owners, and they receive the money that they make in revenue. In a lot of cases, though, it’s not nearly that obvious or transparent—and the U.S. Chamber of Commerce would like to keep it that way.

Presently, companies are not required by federal law to disclose their “beneficial owner”— the real person who exercises control over the operations of the company or who ultimately receives the substantial economic benefits of the company. Right now, most states require more information to check out a library book than to start a corporation. And states allow corporate formation agents to fill out paperwork on behalf of secret clients, and even let shell companies form additional secret corporations like Russian nesting dolls of anonymity. The Panama Papers and Paradise Papers showed how secret companies are a global problem, but the problem is not exclusive to tropical getaways– the U.S. is a major enabler of corporate secrecy.

This lack of corporate transparency has some troubling implications. For one, nondisclosure of beneficial ownership can be a key enabler of money laundering as well as other secretive funding of criminal activities including terrorism, drug trafficking, and human trafficking. In short, the more difficult it is for authorities to track where and to whom money is flowing, and who owns particular assets, the easier it is for global and domestic bad actors to get away with criminal activity. In the United States, these anonymous shell companies have been used by criminals to carry out Medicare fraud, arms trafficking, and cheating people out of their savings using fraudulent investment schemes, all shielded from the prying eyes of law enforcement officials. So why does the Chamber oppose efforts to change federal laws mandating disclosure of beneficial ownership? According to the Chamber’s own testimony, “The Chamber and its members are committed to fighting criminals, terrorists, foreign powers, money launderers and any others who would misuse the U.S. financial system to carry out illicit schemes that harm our nation.”

But the testimony proceeded to argue that mandated disclosure of beneficial ownership is supposedly a misguided, flawed way to do that. This disclosure policy, the Chamber argues, would be “overly broad” and “unworkable” and would supposedly cause too much harm to law abiding small and medium-sized businesses.

This runs directly counter to polling of small businesses that shows strong support in favor of disclosure of beneficial ownership. And, the Chamber is putting forward flawed arguments. For one, the Chamber’s concerns that law abiding business owners would have their privacy invaded by disclosure mandates is dishonest; information the Chamber mentions, such as driver’s license numbers, would not be public domain. This information would not be released for everyone’s access, it would simply be disclosed to authorities. Second, the Chamber raises the possibility that good faith mistakes in filing the required paperwork would lead to innocent business owners being punished—but existing proposals for mandated beneficial ownership disclosure make clear that errors will only be punished if they are done “knowingly” and “willfully” (i.e. fraudulently). These proposals would hardly place an unbearable burden on legitimate businesses.

Besides, the kinds of businesses the Chamber worries would be collateral are not the kinds of companies that proposals for mandated beneficial ownership disclosure target. “Real” companies with lots of employees, shareholders, and profits are exempt from, for instance, the TITLE Act, as are companies that are registered with the U.S. Securities and Exchange Commission.

These spurious arguments on behalf of the Chamber raise serious questions about why the trade association wants to keep this information out of the hands of law enforcement officials. Certainly, very wealthy CEOs like the executives of the Chamber’s member companies may be exactly the sort of people using  shell companies to hide assets to avoid having to pay taxes on assets the federal government does not know about. The classic image we have of “tax evasion” is of money stashed in a bank in the Cayman Islands or Switzerland, but the reality is that current beneficial ownership laws make it shockingly easy for the wealthy to create anonymous shell companies to hide their assets wherever they want to.

Furthermore, the right-wing organization American Legislative Exchange Council (ALEC) has openly stated that its own opposition to beneficial ownership disclosure proposals is to protect the ability for extremely wealthy donors to influence elections and policymaking with secret money. ALEC claims that such proposals would “mak[e] it easier to attack supporters of viewpoints that are not politically correct or popular with the mainstream media”—in other words, the right-wing viewpoints of ALEC’s membership. The Chamber has extensive ties to ALEC, having sat on many of ALEC’s task forces and having pursued much of the same policy agenda. It’s likely that the similarly right-wing Chamber holds views on beneficial ownership disclosure laws as it relates to secret influence of elections similar to its friends at ALEC.

The Chamber claims to support efforts to stop human trafficking, drug trafficking, terrorism, money laundering and other crimes. But by opposing corporate beneficial ownership disclosure proposals, it ultimately stands in the way of those efforts. The Chamber may publicly claim that it’s just acting out of concern for law-abiding small businesses, but closer scrutiny reveals that their true rationale might be slightly less innocent than that.

U.S. Chamber Watch is a project of Public Citizen. If you’d like to learn more about the Chamber, you can always visit us on www.chamberofcommercewatch.org or follow us on Facebook and Twitter.

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By Supporting the Bank Lobbyist Act, the U.S. Chamber Puts Wall Street Profits Before Taxpayers

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After the financial industry’s crash in 2008, taxpayers footed a bill for hundreds of billions of dollars for bank bailouts. In the wake of the crash, the U.S. government failed to prosecute any of the top bankers responsible for it. And, last December, the G.O.P. passed a tax cut that showered more wealth on bankers than any other sector. In so many ways, the sector responsible for a global economic meltdown has been rewarded, not punished, for their misconduct.

Apparently, this lack of consequences isn’t good enough for the U.S. Chamber of Commerce. After the U.S. House of Representatives passed S. 2155, dubbed the “Bank Lobbyist Act” by Sen. Elizabeth Warren, on May 22, the Chamber released a statement applauding the passage of the banking deregulatory bill (which was subsequently signed into law by the president). The Chamber pushed hard for this bill: it issued key letters to both the Senate and House, and hosted an event earlier in the year with acting CFPB director Mick Mulvaney and Small Business Administrator Linda McMahon calling for “bank relief.” S. 2155, which reduces oversight over many banks and rolls back a number of the consumer protections enacted in the Dodd-Frank Act’s reforms, is just the sort of giveaway to Wall Street that the Chamber has consistently advocated for.

As is the Chamber’s M.O., advocating for this bill was couched in the language of “restoring small business lending” and abolishing “one-size-fits-all regulations” that were supposedly hampering small community banks. The problem is that that’s not an accurate reflection of the country’s economic landscape prior to the bill’s passage, nor is it a good description of what the bill actually does.

The reality is that the “Bank Lobbyist Act” reduces oversight on 25 of the 38 biggest banks. It strips away many critical consumer protections, including provisions to prevent racial discrimination in lending. It removes many of the guidelines keeping banks from engaging in the same sort of risky gambling activity that led to the crash just ten years ago. And, of course, when banks gamble with their deposits, those are funds that are not being used for the loans people need to buy a home or start a business. Allowing this sort of risky banking practices is setting up American taxpayers to potentially be on the hook for another bailout on their dime should the financial sector crash again.

As for those supposedly hamstrung banks the Chamber is supposedly selflessly looking out for? They were already doing just fine before the bill passed. The industry reaped a record $56 billion in net income in the first quarter of 2018. Even the small banks, whose financial wellness the Chamber prioritizes in its PR materials, were hardly suffering; loan balances at community banks rose significantly more in 2017 than across all banks. And the Chamber claims that small business owners have been hobbled by a lack of availability of credit in recent years, but according to the Federal Reserve’s September 2017 report, credit availability for small businesses has greatly improved in recent years and reached a stable point. It seems community banks and small businesses are just a smokescreen to make this Wall Street giveaway, the true goal of the bill, more palatable.

After the 2008 crisis, bankers did just fine. It’s the American people who suffered, losing countless jobs, savings, and homes. For the U.S. Chamber, it looks like risking a repeat of the Great Recession is worth it for the sake of Wall Street lining its pockets.

U.S. Chamber Watch is a project of Public Citizen. If you’d like to learn more about the Chamber, you can always visit us on www.chamberofcommercewatch.org or follow us on Facebook and Twitter.

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US Chamber CFPB Featured Image

The U.S. Chamber’s Plans to Defang the CFPB

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The U.S. Chamber of Commerce really, really does not like the idea of an independent and effective Consumer Financial Protection bureau (CFPB).

That’s the key takeaway from its recently-released CFPB “reform” agenda. The agenda’s preamble claims that the Chamber’s proposed restructuring is “an effort to support the agency’s mission to protect consumers,” but a look into their proposals shows that this is mere smoke and mirrors. The Chamber’s true goal is to defang the CFPB and roll back consumer protections.

The Chamber’s recommendations would drastically change the way the bureau does its work—mainly by stripping the agency of its independent leadership and funding. And, other proposed changes would threaten the public’s access to information, weaken the bureau’s system for citizens to make complaints about specific companies, and would put less emphasis on enforcement.

Currently, the CFPB’s funding is handled by the Federal Reserve. That was deliberate in design; the CFPB must be independent from Congress in order to ensure that it represents consumers first and can’t be guided toward partisan ends. The Chamber’s proposal would put Congress in charge of the CFPB’s purse strings, allowing the congressional majority to control the bureau’s funding in a way that will effectively keep it from issuing safeguards to protect consumers.

The Chamber’s agenda also recommends changing the structure of the CFPB to be run by a bipartisan commission, so that, like other commissions, partisan fighting could stop the bureau from implementing new protections. The current structure has worked well and has been upheld by the courts—a federal appeals court ruled in January that the single-director structure of the bureau is constitutional and that the director cannot be fired by the president without cause. As with bringing the bureau’s funding under congressional control, this measure is designed to allow the Chamber’s friends in the GOP to prevent the bureau from exercising meaningful regulation of financial institutions involved in predatory or abusive practices.

Critically, the Chamber’s stance on the CFPB very closely mirrors that of the Trump administration. Recently, the CFPB released its semi-annual report, the first under Acting Director Mick Mulvaney, a Trump loyalist and House Freedom Caucus co-founder who has previously called the bureau a “sad, sick joke.” As Public Citizen has documented, Mulvaney’s report is essentially a roadmap for the dismantling of the CFPB that Mulvaney has desired for a long time. The CFPB’s report includes Mulvaney’s four recommendations for Congress to gut the bureau and render it ineffective. Like the Chamber’s recommendations, Mulvaney’s proposal includes provisions to make the CFPB’s budget subject to appropriations from Congress. As Lisa Gilbert, Public Citizen’s vice president of legislative affairs, put it, Mulvaney’s proposals are a “knife in the heart” of the CFPB.

Throughout its agenda, the Chamber hides its intentions behind PR-friendly buzzwords like “access,” “choice,” and “reform.” But scrutiny of the Chamber’s proposals makes it clear that what they really want is to let corporations escape oversight and accountability, and to let an overly partisan and corporate captured Congress keep the CFPB from making real advancements for consumers.

The value of the CFPB to American consumers cannot be overstated. As of early 2017, the bureau had secured nearly $12 billion in relief for nearly 30 million consumers. It had also handled over 1 million complaints, and fielded questions from the 13 million unique visitors to its Ask CFPB tool.

But the bureau’s independence from Congress and partisan politics is essential to its effectiveness. Only free from Congress’ control can the CFPB put the needs of the American people ahead of interference from an uncooperative majority focused on putting the needs of their corporate donors first.

Rather than allow the CFPB to continue its essential work to protect consumers, the U.S. Chamber of Commerce would instead like for its Big Bank friends have what they’ve been clamoring for: an end to the bureau’s independence and control over its actions. After all, when you represent predatory Wall Street banks, you can’t just let some watchdog agency stop you from lining your own pockets, no matter how much harm you do to consumers.

But, we will continue to work to stop the Chamber and the Trump administration from getting their way. We’ll defend the CFPB against restructuring that would prevent it from doing its job: to ensure people, not bank profits, are protected. Take action today to stand with us.

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Fourth of July or Christmas in July? Policy Riders are Big Gift to the U.S. Chamber of Commerce

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Just before Congress escaped town for the Fourth of July recess, the U.S. House Appropriations Committee released its draft fiscal year 2018 Financial Services and General Government (FSGG) Appropriations bill. The FSGG appropriations bill provides annual funding for the U.S. Treasury Department, the Internal Revenue Service (IRS), the U.S. Securities and Exchange Commission (SEC), the U.S. Consumer Financial Protection Bureau (CFPB), the Federal Communications Commission (FCC), the Consumer Product Safety Commission (CPSC), and many other important agencies.

This year, however, the bill is packed chock full of ideological policy riders that have nothing to with funding the agencies the bill is supposed to provide for, and everything to do with pleasing the House majority’s corporate masters at the U.S. Chamber of Commerce. By tucking these policy riders into must-pass legislation, the House leadership ensures that they have a better chance of becoming law than they would if they were forced to stand on their own (highly dubious) merits.

It may be the Fourth of July holiday week, but the release of the draft FSGG appropriations bill is likely to have been celebrated like Christmas in July in the marble hallways of the Chamber. The draft bill provides the Chamber with a veritable avalanche of presents, probably in response to the avalanche of money the Chamber has bestowed upon GOP candidates for Congress.

The biggest gift of all to the Chamber is the provision of the draft bill that would prevent the SEC from developing a rule that would require publicly traded companies to disclose their political spending to investors, including donations to politically active trade associations like the Chamber. The secrecy-obsessed Chamber has long lobbiedagainst such a rule. It has even reached out to member companies to urge them against voluntarily disclosing such information despite the fact that more than 1.2 million investors (retail and institutional) and members of the public have called for it.

If the policy rider prohibiting the development of a political spending disclosure rule qualifies as the proverbial new car in the garage on Christmas morning, then the rider eliminating the financial independence of the CFPB qualifies as the proverbial first class tickets to Paris for the Chamber and its friends on Wall Street. Fighting the existence of a strong, independent CFPB has been a lodestar for the Chamber. Why does the Chamber hate the CFPB so much? Probably because the CFBP is doing its job, working to protect consumers from unscrupulous and sometimes illegal behavior by the big financial institutions whose interests the Chamber represents. Indeed, the CFPB has obtained $11.8 billion in relief for over 29 million consumers. That’s $11.8 billion that wasn’t available for executive bonuses and stock buy-backs.

Unfortunately, bringing the CFPB under the heal of the very politicians who are most dependent upon corporate cash for their reelections isn’t the only policy rider in the draft FSGG appropriations bill that’s a giveaway to the Chamber’s Wall Street patrons. The draft bill contains a separate rider that would repeal the Volcker Rule. The Volcker Rule prevents banks from engaging in speculative trading with depositors’ money, thereby reducing the chances of another financial crisis. Of course, the Chamber and the Big Banks don’t like the Volcker Rule because it limits Wall Street’s ability to make short term profits that in turn produce big bonuses for executives.

As if all this weren’t enough, the draft FSGG appropriations bill contains another yuge gift for the Chamber and its financial services industry backers. The draft bill contains a rider which would halt a CFPB rule restricting the use of forced arbitration clauses buried in the fine print of consumer financial contracts. The Chamber has long campaigned against limits on this “rip-off” clause. Blocking this rule would essentially allow corporations to rip off consumers with impunity, as the Wells Fargo fake account scandal litigation has shown.

While it is undoubtedly depressing that our elected officials, who are supposed to represent the people, are instead finding new and ever more creative opportunities to shower gifts on their corporate benefactors, we still have time to make our voices heard. The House FSGG appropriations bill hasn’t yet passed through the full appropriations committee. So call your congressperson and tell him or her that you object to all of these harmful policy riders whose only purpose is to please the Chamber and the giant corporations intent upon buying our democracy.

Because if we don’t stand up and make our voices heard, then they very well may wind up singing some rather special Christmas carols at the Chamber this summer.

If you’d like to learn more about the Chamber and its reactionary agenda, you can always visit us on www.chamberofcommercewatch.org or follow us on Facebook and Twitter.

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Who’s Behind Trump Tax Reform? The U.S. Chamber of Commerce

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Tax reform has been a hot topic since Donald Trump was elected president. Big corporations and the wealthy have been salivating over the prospect of a major tax cut ever since Trump released his “Tax reform that will make America Great Again” (or for short #TRTWMAGA) plan during the campaign and another plan in April. Both of these plans are long on harmful policy ideas while being short on details, but they contain key assumptions that underpin Trump’s budget proposal released on May 23.  The House Republicans put forward a more comprehensive, but just as problematic, blueprint for tax reform in June of last year.

Last week, the House Ways and Means committee held its first hearing of the year on comprehensive tax reform. It should come as no surprise that the U.S. Chamber of Commerce has been driving much of the narrative surrounding the GOP’s reform blueprint since it was so heavily skewed in favor of Big Business at the expense of average taxpayers. Prior to the hearing, in a letter to Chairman Brady, the U.S. Chamber noted that “significant rate reductions for corporations and pass-through entities, expensing of capital purchases, an internationally competitive system for taxing foreign earnings, and simplification” are  meant by “tax reform” though all of those policies would damage, rather than reform our system.

While the tax reform plan Trump campaigned on would give trillions in tax breaks to the rich and large corporations, it is only briefly mentioned in his recent budget proposal, though it supplies much of the funding tradeoffs that “balance” the budget over 10 years. The components that are mentioned in the budget, however, stem from policy proposals championed by the Chamber, and can also be found in House Ways and Means Committee Chairman Kevin Brady’s and Speaker Ryan’s tax reform blueprint. So, the GOP tax reform plan is really the Chamber’s tax reform plan, and it is designed to benefit its membership, which is made up of some of the richest corporations and individuals in our country.

Below we detail some of the main ways in which the Chamber’s tax reform proposals would result in a major payday for wealthy individuals and corporations:

Death and Taxes: Both the Chamber and Trump wish to abolish the estate tax, which would represent a massive tax cut for the heirs of the very wealthiest families, and would cost $174 billion over the course of 10 years. While we haven’t seen Trump’s tax returns and likely never will, we can safely assume that Trump’s heirs could gain hundreds of millions or even perhaps billions of dollars if the estate tax were to be repealed. The Chamber has been a staunch opponent of the estate tax for years, claiming that it harms family businesses, though that’s plainly not true. In 2016, the individual exemption was $5.45 million, a pretty penny to inherit tax-free, and the Tax Policy Center Tax Policy Center estimates that “only 120 farms and small business, where at least half the assets are in farm or business assets, had to pay the estate tax in 2013”.

The Trump Loophole: Big businesses oftentimes masquerade as small businesses by organizing themselves as pass-through entities, a tactic used by hedge funds and real estate companies (See, Trump Organization LLC) to reduce their tax bills, costing the U.S. Treasury billions.  Trump’s proposed tax plan lowers the tax rate for business income from 35% to 15%, (referred to as the “Trump Loophole”) and would reduce taxes paid by wealthy recipients of “pass-through” business income by $2 trillion over the course of 10 years. Reducing the tax rate on business income is something the Chamber is championing.  

Reverse Robin Hood Health Care: The Chamber has long lead the fight to repeal the Affordable Care Act (ACA), and has been a proponent of the GOP’s (American Health Care Act) AHCA . If the ACA is repealed, manufactures of prescription drugs and medical devices would see a decrease in taxes levied on their products, thus pharma supports repealing the ACA, despite the fact that with its expanded coverage more people will be able to afford care including drugs and devices. So repeal of the ACA, yet again, results in tax cuts for the wealthy, at the expense of everyday Americans. The Joint Committee on Taxation estimates that repeal of the ACA would deliver roughly $144 billion over the coming decade to those with incomes of $1 million or more.

Conspicuously missing in the Chamber-Trump tax reform proposal? Any proposals that help average taxpayers by making corporations and wealthy pay their fair share: Eliminating a $4 billion tax preference that oil and gas companies receive (for which the Chamber lobbies), repealing a loophole that allows corporations to deduct unlimited amounts of CEO-pay from their taxable income, supporting real corporate tax reform that would require profitable multinational companies like Apple to pay taxes on offshore profits, or instituting progressive new taxes like on Wall Street trades.

The tax reform proposals championed by the Chamber and largely adopted by Trump, much like his newly released budget, are rigged for billionaires and big corporations- they constitute comprehensive tax giveaway to the superrich and a payback scheme for big business. The Chamber states that it “will be at the table throughout the process—because anyone who isn’t at the table risks ending up on the menu.” If the Chamber can help it, average tax payers, many of whom voted for Donald Trump because they believed his promises to stand up for working people, will most definitely not be getting a seat at the table.

Unfortunately, as Trump’s tax reform proposals yet again prove, it’s not the people’s agenda that he’s intent on implementing, but rather the Chamber’s agenda.

Chamber Resolutions

New Year, Same Chamber

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While many Americans are signing up for a gym membership or vowing to read for fun, the U.S. Chamber of Commerce is at it again with a slew of resolutions for the new year that, while they may line the pockets of Big Business and the very rich, promise nothing but trouble for the rest of us and the planet we call home. Without further ado, our list of the Chamber’s new year’s resolutions for 2017:

  1. Shed those last few pounds regulations

Now that several Chamber-alums are occupying key spots on the transition team, the Chamber has set its sights on kicking off the new year with a rollback of federal regulations. The Chamber will continue to flex its dark money-fueled muscle in the hard-fought battle to pass the Midnight Rules Relieve Act (MRAA). The MRAA would allow Congress to revoke a plethora of public protections under the Congressional Review Act with just one vote. This would have severe consequences for our health, safety and economic security and the Chamber’s support of the MRAA demonstrates once again that it sides with big corporations’ bottom lines over people’s well being. Also making the top of their resolution list is the passage of the Regulatory Accountability Act (RAA) which would add dozens of new requirements to the regulatory process and would allow non-expert judges to second-guess the decisions made by an agency’s technical experts, thereby giving industry additional opportunities to attack public protections. New year, same deceptively named legislation!

  1.  Get Outdoors While You Still Can

While we don’t know if 2017 will finally be the year the Chamber makes up its mind on the science of climate change, we do know that their list of resolutions includes killing the Clean Power Plan, the Obama administration’s signature initiative to reduce greenhouse gas emissions from power plants. The Chamber is also advocating to undo the Clean Water Rule, designed to protect streams and wetlands, and by extension, our drinking water. And if that wasn’t enough, the Chamber is also fighting to reverse President Obama’s decision to close much of the Atlantic and Arctic basins to offshore drilling. If the Chamber gets its wish, the great outdoors may not be so great anymore.

  1. Spend Less Money…On Workers

The Chamber has yet again resolved to stand up for the interests of very wealthy individuals at the expense of hardworking Americans. The Chamber will continue to oppose an increase in the minimum wage and implementation of the overtime rule that would make millions of middle income Americans eligible for overtime pay. The Chamber also intends to stiff hardworking Americans by asking for a repeal of several other Obama administration Executive Orders, including (but certainly not limited to!) the Establishing Paid Sick Leave for Federal Contractors EO, which provide workers at companies doing business with the federal government the opportunity to earn up to 7 days of paid sick leave per year. New year, but no new money in your paycheck!

  1. Get Organized Unorganized

Just like some of us resolve every year to spend less money eating out or to stop smoking, the Chamber resolves every year to weaken unions and the protections they offer workers. In 2017, the Chamber has resolved to continue pushing laws weakening unions, seeking to build on “victories” in states such as Wisconsin, Michigan, and Indiana. New year, same war against unions!

  1. Party Like it’s 2007

Ain’t no party like a financial crisis party! In keeping with its role as a lobbyist for Wall Street, the Chamber will continue its fight to roll back the Dodd-Frank Act,  passed in the wake of the financial crisis as a way to prevent future financial crises. Dodd-Frank instituted a host of consumer protections as well as limits on reckless risk taking by banks. One important part of Dodd-Frank that the Chamber adamantly opposes is the Volcker Rule which prohibits big banks from using depositors’ funds for proprietary bets. The Chamber will also continue to oppose the Consumer Financial Protection Bureau’s efforts to combat unfair forced arbitration clauses and class action bans.  These “rip-off” clauses prevent consumers from having their day in court and offer big corporations another way to avoid accountability for corporate wrongdoing as the recent Wells Fargo scandal has shown. Another safeguard that the Chamber seeks to eliminate in 2017 is the fiduciary rule, which protects retirement savers from greedy financial advisors. New year, same defense of Wall Street greed!

So while many of us are wondering if we can really make it to the weekend without a drink or just how far into February our other resolutions will last, we should be more concerned that the Chamber is working to strip us of public protections, all while destroying the only planet we’ve got. Perhaps we should add a resolution to our list: oppose the U.S. Chamber’s harmful agenda.

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Behind The Curtain: How Tom Donohue Says One Thing About Regulations but the Chamber Does Another

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By David King, Intern at U.S. Chamber Watch

 On June 22, 2016, U.S. Chamber of Commerce President Thomas J. Donohue gave a speech entitled “Financing America’s Economic Growth: How Robust Capital Markets Can Help Revitalize Our Economy” at the Nasdaq MarketSite in New York City. He began this speech by recalling that he previously spoke at Nasdaq in 2007, in the months before the Financial Crisis. He claimed that his advice then went unheeded. One is left to wonder exactly to what advice he is referring, as the Chamber has been a longstanding advocate of the type of deregulation that helped lead to the 2008 financial crisis. However, despite his dubious claims of prescience, Donohue offered us a second chance to dissect his well-worn platitudes that mask the Chamber’s aggressive deregulatory agenda.

Claim #1: “We want smart regulation.”

While Donohue may claim to seek “smart” regulations, the reality is that the Chamber almost never supports any new regulations. The Chamber does, however, spend its vast resources fighting against regulations intended to safeguard the American public. Most recently, the Chamber has opposed the Department of Labor’s fiduciary rule requiring money managers to act in their clients’ best interests as well as the Overtime Rule requiring that more salaried workers be paid for any overtime hours they work. Not to mention the Chamber’s epic fight against implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act, including the Volcker rule banning commercial banks from engaging in proprietary trading activity with depositors’ money and rules proposed by the Consumer Financial Protection Bureau (CFPB), like limiting the use of forced arbitration clauses. Claiming that you’re for “smart” regulation when you almost never propose any is nothing more than a smoke screen to hide the Chamber’s reactionary, anti-regulatory agenda.

Claim #2: “If we take away the right to fail, we take away the right to succeed.”

Donohue’s defense of Wall Street ignores the fact that the new regulations born of the financial crisis do not take away the right for banks to fail; they merely attempt to eliminate the right to be too big to fail and therefore require taxpayer dollars for bailouts. While Donohue claims that these newly enacted regulations harm Main Street, the reality is that they shield Main Street from the enormous collateral damage that occurs when Wall Street’s casino games blow up as they did during the financial crisis. Credit for Main Street dries up when banks’ speculative activities run amok, something Donohue tries to gloss over in his speech.

Claim #3: “Too often rules are decided in the backrooms of Washington”

Talk about chutzpah. The Chamber is the nation’s largest lobbyist and is a habitué of Washington backroom deals. What’s more, Donohue has the audacity to demand greater transparency at various regulatory agencies despite the fact that the Chamber itself is quite opaque, refusing to disclose where its own money comes from. The Chamber received nearly $170 million in 2012 from just 1,500 donors. Not a single donor was disclosed. The Chamber’s very own head lobbyist, Bruce Josten, has stated “We never disclose funding or what we’re going to do.” If Donohue is serious about bringing transparency to Washington, then he should start with his own organization.

Claim #4: “I know a thing or two about the Post Office… Having it launch a banking operation is as dumb an idea as I have heard in Washington, a town full of dumb ideas.”

Postal banks are a fixture in many industrialized nations. The U.S. also historically had postal banking. Allowing the Post Office to expand its product line would provide much needed financial services to those who would normally go unbanked. This would be a great thing for consumers, particularly poor consumers who would benefit immensely from being able to avoid payday lenders and their astronomical interest rates. Of course, a Post Office bank would be a terrible thing for payday lenders, so naturally, the Chamber is against it.

Claim #5: “We’re not looking to pick winners and losers.”

Au contraire! Donohue and the Chamber’s agenda is very much looking to pick winners, and the winners in this speech, delivered in the heart of Wall Street are, not surprisingly, Wall Street banks as well as the rest of the financial services industry– the payday lenders, insurance companies, credit card issuers, and student loan issuers. Donohue’s agenda also creates losers, starting with small businesses and consumers who are harmed when the financial services sector is deregulated as Donohue wishes it to be.

Donohue famously stated that he wanted to turn the Chamber into “the biggest gorilla in this town.” When it comes to the Chamber’s anti-regulatory agenda, Donohue is not so candid. While he may claim to support transparency and regulations and to act in the best interests of Main Street, that could not be further from the truth. Donohue and the Chamber’s M.O. should by now be clear: say one thing, do another.

Credit Cards

Arbitration, Part Deux: The Chamber’s Free Market Fail

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Last time, I wrote about how the U.S. Chamber of Commerce’s arguments in favor of forced arbitration fell apart during a U.S. Senate Banking Committee hearing on the Consumer Financial Protection Bureau(CFPB). And this, despite the fact that the hearing was actually more akin to a show trial, stacked with witnesses opposed to the CFPB.

As I pointed out, there’s something very inconsistent and illogical about defending forced arbitration while simultaneously (and erroneously) claiming that arbitration provides better outcomes for consumers. But not only is the Chamber’s argument internally inconsistent, it’s also completely inconsistent with the “free market” economic theory that the Chamber claims to champion.

In order to better understand what I’m getting at here, let’s take a journey back to Economics 101. Free Market economic theory is based upon the assumption of individual rational actors, that is, consumers, workers, managers, and investors who each act in their own individual best interests. Indeed, Adam Smith, the founder of free market economic theory, relied on the concept of individual rational actors as the basis for his famous invisible hand metaphor, beloved by capitalists the world over.

If one accepts free market economic theory, as the Chamber claims to do, then consumers are rational actors, and as rational actors, they would therefore choose arbitration over the court system if arbitration were actually better for them. But the Chamber is defending forced arbitration, suggesting that it actually believes that either consumers aren’t rational or that arbitration isn’t actually a better option for them.

The Chamber’s defense of forced arbitration puts it in a tough spot. While the Chamber likes to think of itself as an avatar of American free market capitalism, its defense of forced arbitration runs counter to the foundations of the very free market economic theory it claims to cherish. In short, it finds itself confronted with the following dilemma: either commit heresy against the gospel of capitalism or admit that forced arbitration is in the best interests of Corporate America and the Big Banks and not of consumers whose power of choice it eliminates.

It is all too fitting that the Chamber appears to have strayed from its faith in free market economic theory at a show trial masquerading as a hearing. Show trials were of course one of the hallmarks of Soviet communist rule, so what better occasion to break from capitalist orthodoxy?   As for which the Chamber ultimately renounces—capitalism or the Big Banks that have been pushing forced arbitration on their customers—the smart money says never bet against the banks.

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