While the media has been focusing much of its attention over the past few weeks on the inauguration, protests to the aforementioned inauguration, and a slew of alternative facts, Chamber Watch did not fail to tune into U.S. Chamber of Commerce President Tom Donohue’s annual State of American Business address.
Over the past 10 years, with Democrats controlling either Congress, the White House, or both, this annual speech has served as little more than a corporate wish list, with slim to no chance of wishes coming to policy fruition. But this year, with a Republican Congress that the Chamber spent big to elect and a Republican President almost completely devoid of policy ideas, much on Donohue’s wish list has a decent chance of becoming vital to the Trump/Ryan agenda. So if you want to get a handle on where Trump and the new Congress may be intending to steer the country, there’s no better place to start than with Donohue’s speech. However, on the off chance you don’t have the time or desire to listen, we’ve outlined his top priorities below:
1. Cutting Social Security and Medicare.
Despite seeing #LetsGrow emblazoned on the lectern and across our TweetDeck, the Chamber isn’t actually concerned about growth, or at least certainly not when it comes to growing the incomes of working Americans. If the Chamber was concerned with growing Americans’ incomes and the American economy, it would understand that consumer spending represents almost 70% of GDP. Of course, a lot of those consumers are seniors who receive Social Security benefits. In 2012, 57 million Americans received almost $800 billion in Social Security benefits. Economists estimate that Social Security benefits in turn generate approximately $1.4 trillion in economic output and more than 9.2 million jobs. Would the Chamber forgo this economic output and these jobs? The answer appears to be a thinly veiled yes.
2. Rolling back Regs
Next up on Donohue’s agenda is rolling back regulations. Among his top rollback priorities are the overtime rule that would provide overtime pay to millions of middle income Americans, the clean water rule to protect our streams and rivers, the Clean Power Plan to limit power plant emissions of greenhouse gases, and the open internet rules to preserve net neutrality. He also called for the repeal of the Affordable Care Act (ACA) and the Dodd-Frank Act, and specifically condemned the Volcker Rule to limit speculative trades by banks of the kind that led to the 2008 Financial Crisis.
But Donohue’s anti-regulatory tirade didn’t end there. He also touted the deceptively-named Regulatory Accountability Act that would hamstring future efforts to protect consumers, workers, and the environment by layering on so many additional process requirements that rulemaking to protect the public would grind to a halt. He demanded that regulations limiting fossil fuel production be revoked. He renewed his vow to fight against the fiduciary rule which would protect retirement savers from unscrupulous investment advisors. He criticized the Consumer Financial Protection Bureau (CFPB) despite the fact that it has returned $11.4 billion to consumers harmed by the illegal practices of financial services corporations. And lastly, he vowed to defend forced arbitration from regulatory action just as the CFPB and other agencies are beginning to crack down on these abusive rip-off clauses that harm consumers and small businesses.
Amazingly and yet not surprisingly, Donohue justified killing all of these important and beneficial protections by claiming that they are harming small businesses. However, many of the regulations that Donohue mentions don’t even apply to small businesses. This is the case for the overtime rule, the ACA, and many provisions of the Dodd-Frank Act. Others, like the clean water rule and the CFPB actually help small businesses. Just like consumers, small businesses are often victimized by the shady lending practices of big financial services corporations, making the Chamber’s desire to gut the CFPB and defend forced arbitration completely inconsistent with their claims to defend small businesses.
3. Cutting the Corporate Income Tax
Donohue complained that the U.S. statutory rate is among the highest in the world, but what he didn’t say is that the effective corporate income tax rate is actually far below the average effective rate for industrialized countries. The Chamber’s agenda has nothing to do with growth or with expanding incomes for working Americans or with defending small businesses from alleged regulatory overreach and everything to do with putting more money in the pockets of big corporations and the extremely rich executives who run them. This trickle down agenda will not produce the GDP growth the Chamber claims. Even the International Monetary Fund has recognized that increasing income inequality is a drag on growth.
Donohue’s address was ostensibly all about increasing economic growth, but left unsaid was the critical question: growth for whom? While Donohue included some throwaway lines about “sound, long term economic growth,” “expand[ing] incomes,” and the importance of small business, the core of his speech focused on three things: cutting Medicare and Social Security, rolling back important laws and regulations that protect workers, consumers, and the environment, and cutting taxes on big corporations. Donald Trump may have campaigned as a populist, claiming that he would stand up to special interests and fight for the interests of working people, but if Tom Donohue’s State of American Business address is anything to go by, Trump and the Republican Congress will pursue an agenda that puts Big Business and the wealthy first and everyone else last.