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The business community doesn’t dislike President Joe Biden’s proposal to hike corporate taxes to pay for a massive $2 trillion-plus infrastructure plan. They detest it.
But there are some reasons to think corporate leaders are warming to Biden: They backed his Covid-19 recovery plan, which pumped billions of dollars into hard-hit industries and small businesses. They know he comes from a business-friendly state that boasts more corporations than any other. And, well, he’s not Donald Trump, whose trade wars hurt companies and whose incendiary remarks on race offended them.
Inside the White House, they are warming to corporate America, too. Biden and his team believe that while the two sides may be at loggerheads over tax rates, they can use business leaders to help move other policy priorities. They talk regularly with corporate America and the White House is considering forming an advisory group of business leaders in much the same way as other recent presidents, including Trump and Barack Obama.
“We said early on ... that we would engage the business community and we would reach out and we would have interactions,” Cedric Richmond, director of the White House Office of Public Engagement, said in an interview. “You have to realize those are major employers of probably millions of Americans. You can’t not talk to them.”
The cautious courtship between corporate America and the Biden White House could play a critical role in the president’s agenda, as he advances an infrastructure bill through Congress and pushes politically-fraught policies, including on immigration, racial justice and gun violence, without lawmakers. It also reflects a seismic shift in the political landscape, where, not too long ago, Democrats found themselves trying to tamp down opposition from business leaders rather than work with them, and generally business-friendly Republicans were aligning with corporate America rather than periodically bashing it.
“What President Biden realizes is that business is now ready to engage, and they are an important voice at the table. They’re not the only voice at the table,” said Valerie Jarrett, who served as Obama’s liaison to corporate America. “Big business isn’t simply relying on Republicans to look out for their interests. They're looking out for their own interests and getting more involved.”
Evidence of that involvement has grown in recent years. PayPal canceled plans to open a global operations center in Charlotte after North Carolina passed a law restricting transgender rights in 2016. Walmart and Dick’s Sporting Goods raised the age of gun sales after the mass shooting at a Parkland, Fla. school in 2018. But it’s become even more pronounced recently, when Delta and Coca-Cola denounced a contentious Georgia law that places new requirements on voting.
Last weekend, more than 100 business leaders held a rare online meeting to discuss what action they should take in the wake of similar voting bills being considered in states across the country. Lynn Forester de Rothschild, founder of the Coalition for Inclusive Capitalism and one of the three people who helped coordinate the meeting, urged Biden to be more vocal about his desire to work with business leaders.
“My inclination is to trust him to not be in the pockets of corporations at the expense of people and planet but he definitely wants to have a vibrant business community that takes care of our society,” she said in an interview.
Perhaps recognizing the risks, Biden has, so far, avoided the type of public engagement that Rothschild wants. Progressives in the Democratic Party, long skeptical of corporate America, have pushed the president to resist embracing business leaders and criticized some of Biden’s appointments who have corporate ties. When Biden met with corporate chief executives during the transition, there were more union leaders in the meeting than CEOs. As president, he has had just two major meetings with CEOs, according to Richmond. In the meetings, Biden met with about 25 leaders from companies including Walmart, Ford Motor Company, AT&T Communications, Gap, Lowe’s Companies, among others.
Still, Biden has given hints that he’s looking to leverage the emerging social conscious movement in corporate boardrooms. In February, at a CNN town hall, he signaled that businesses could help push policies around police reform, noting that they’d be inclined to respond to the attitudes of their consumers.
“If you want to know where the American public is, look at the money being spent in advertising,” Biden said. “Did you ever, five years ago, think every second or third ad out of five or six you’d turn on would be biracial couples?” Businesses, he added, are “thinking differently. They’re more open. And we’ve got to take advantage of it.”
A Biden adviser said the president has expressed similar feelings about businesses privately too. “I do think he has an appreciation of the role that corporate America can play in addressing what we would define as social, political and cultural issues — not the least because he understands consumer-facing businesses have an imperative to understand their market,” the adviser said.
Biden largely leaves the White House’s corporate outreach to his team, led by Richmond, who has ties to big oil and gas firms, and Brian Deese, who worked at BlackRock, the world's largest investment manager, and is now director of the National Economic Council. Sometimes, chief of staff Ron Klain and Steve Ricchetti, counselor to the president, will make a call too.
Gina Raimondo, a former venture capitalist who clashed with unions as she cut taxes and eliminated regulations to support businesses as governor of Rhode Island, is also playing a leading role in talking to the business community, especially about the infrastructure proposal, aka the American Jobs Plan. She’s spoken to 100 business leaders and labor leaders on several issues, including Covid-19, infrastructure, manufacturing and broadband, according to her office.
“When you look at the outreach we’re doing it’s almost equivalent to an all hands on deck type situation,” Richmond said. “Some CEOs and a lot of businesses get multiple touches from many people.”
In the backdrop of all the outreach is the fraying relationship between corporate America and members of the Republican Party.
Top companies have begun dialing back donations to Republicans, in many cases withholding money to elected officials in Congress who voted against certifying the November election. And as CEOs wade into voting rights battles, Republicans have responded by going harder at them.
Sen. Josh Hawley (R-Mo.) promised a sustained effort to defeat “woke capitalists,” whom he accused of waging a war of “retaliation and suppression” against “anyone who stands for election integrity.” Last week, Senate Minority Leader Mitch McConnell threatened “serious consequences” for corporations that retaliate against state Republican bills on voting laws. “My warning, if you will, corporate America is to stay out of politics,” he said. “It’s not what you’re designed for.”
Though the White House has looked to leverage the fallout between Republicans and corporate leaders, officials there remain cautious of not upsetting progressives and union allies. In recent weeks, Biden took the unusual step of encouraging an unsuccessful bid by Amazon employees in Alabama to form a union. And weeks later, when discussing corporations that paid little or no federal taxes, the president singled out Amazon by name — though largely as an indictment of the current tax system. Amazon CEO Jeff Bezos responded by saying he supported some higher taxes.
“He’s kept our big and restive [Democratic] coalition together without turning off the CEOs,” Matt Bennett of the center-left group Third Way said of Biden’s approach. “He hasn’t bashed anybody or tried to play one off against the other, which is smart.”
Biden’s ambitious infrastructure package could test his ability to keep that coalition together. CEOs and business groups, including the Chamber of Commerce and the Business Roundtable, which represents leaders of more than 200 companies, have largely rejected the American Jobs Plan, criticizing the proposed corporate tax hikes that would pay for the projects. The Business Roundtable, which is running digital and radio ads against it, declined to offer an official to be interviewed for this story. “We have an open line of communication and good engagement with the administration,” is all the group would say in a statement. The Chamber of Commerce, similarly, did not make an official available.
Some of the CEOs and business organizations have grumbled about a lack of outreach from the administration. But the White House says such complaints are misplaced. They note that Richmond and Deese met with the heads of Bank of America, State Street, Wells Fargo and Goldman Sachs in a session organized by the Financial Services Forum and briefed 25 CEOs members of the Business Roundtable on the infrastructure plan. On Tuesday, more than 4,000 small businesses RSVP'd to attend a virtual event on the American Jobs Plan, according to the White House.
The White House provided a list of nearly 60 companies and business groups that have been supportive of the proposal.
"This isn’t a matter of being cozy” with corporations, said Jarrett. “It’s a matter of appreciating the importance of the impact they have on the economy and that it isn’t an ‘either or,’ having a relationship with business or labor. It’s ‘both and.’ ”
Robert Diamond, who served as director of private engagement in the Obama White House and is now a lobbyist, said corporate America is generally supportive of Biden’s top three priorities: combating the pandemic, infrastructure investment — though not the corporate tax hikes — and tackling climate change. In that sense, the political stars have aligned for the current administration, giving them an agenda that appeals to big business while maintaining credibility with their Democratic base.
“It’s a unique situation in that three of the big things the administration’s coming out of the gate with, I think there’s really broad support for in the business community,” Diamond said.
Theodoric Meyer contributed to this report.