'Wrong for Arizona': Business groups and Ducey blast Democrats' Build Back Better plan

Arizona business leaders Thursday came out against President Biden's expansive social spending and climate change plan that they say could stoke inflation, raise taxes and give unfair advantages to manufacturers that rely on union workforces.

Republican Arizona Gov. Doug Ducey also voiced his opposition to Biden's Build Back Better agenda in a separate event hosted by Marc Short, former Vice President Mike Pence’s chief of staff who previously worked as President Trump’s legislative director.

"This bill is wrong for Arizona,” Ducey said during a speech in which he touted Arizona’s strong economy, the state surplus and his so-called flat tax, which is facing a legal challenge and is slated to go before voters next fall. The event was held at a Tempe warehouse owned by 21st Century, a vitamins and supplements company with over 550 employees in Arizona.

Separately, leaders representing four Chambers of Commerce blasted the legislation being crafted by Democrats for not reflecting bipartisan views and for lacking transparency. "It's highly unlikely that any senator has actually read it," said Danny Seiden, president and CEO of the Arizona Chamber of Commerce and Industry.

"The devil is in the details, and the details are many," added Julie Pastrick, president and CEO of the Greater Flagstaff Chamber of Commerce.

The show of opposition to the proposal in Arizona comes as advocates for children and others ramp up their efforts in support of the plan.

Biden on Thursday acknowledged that the proposal, which is stalled in the Senate where it faces unanimous Republican opposition, is unlikely to pass before the end of the year and said Democrats would continue to work on it "over the days and weeks ahead."

Safety net, climate change are focus

The legislation modeled after President Biden's Build Back Better agenda would support an array of Democrat-favored safety-net programs such as expanding the child tax credit, adding a child care subsidy, making pre-kindergarten care universal and enhancing health-care coverage, while encouraging efforts to slow climate change.

A majority of Arizonans are opposed to the bill because of tax increases, according to a recent survey cited by the business leaders, without providing specific details. They said slightly more Arizonans expressed concern over inflationary aspects.

However, Arizona also could see increased retail sales and employment gains in sectors including construction and social-assistance programs centered around child and elderly care, according to a report released in September by the Arizona State University-affiliated L. William Seidman Institute in Tempe.

Arizona could benefit to the tune of around $83.6 billion in direct spending and the addition of perhaps 900,000 jobs over the next decade, according to the study.

Plus, some of the environmental and social benefits from the legislation aren't easily quantified but nevertheless could be compelling, the report said. These include reduced hospitalizations from asthma as vehicle emissions decline and reduced child- and elder-care burdens if more family caregivers are able to enter the mainstream workforce.

The study looked at Biden’s entire $3.5 trillion social policy proposal, which was ultimately broken up into two parts — an infrastructure bill that became law in November and the social spending bill that Democrats are now negotiating.

The social spending package is largely paid for via taxes on high earners, though the Congressional Budget Office has estimated it could increase the federal deficit by $160 billion over a decade.

Ducey challenges study

Short is a leader of the Coalition to Protect American Workers, a GOP group that opposes Biden’s tax agenda and is hosting events in several states urging moderate Senators to oppose the Build Back Better Act.

The coalition also is spending on advertising encouraging those federal lawmakers to oppose the social spending bill.

On Thursday, he hosted Ducey in Tempe, where the governor took aim at both the legislation and the ASU-linked report.

“It sounds like these experts have created a report to make astrologers look credible," Ducey said of the Seidman report. “How could they have any idea what the future is going to look like over the next 10 years on something that they can't even describe what's in the bill yet, because it hasn’t passed one of the two chambers?”

But Ducey also offered a long-term forecast, predicting that Arizona is poised to add 700,000 jobs over the next decade without the bill.

Ducey said he feared Biden's bill would increase inflation, and said a tax deduction provision would unfairly benefit progressive states, mainly those in the Northeast and on the West coast, that have higher property taxes. The provision would allow more generous deductions for SALT or state and local taxes that are currently capped at $10,000.

The Biden administration has negotiated with key Democratic lawmakers to pass his plan. The House passed the bill in November following contentious debate that is now playing out among Senate Democrats.

Senate Democratic leaders hope to approve the bill through a reconciliation process, meaning they need all 50 Democrats to support the measure, and putting the spotlight on moderates like Arizona Democratic Sens. Kyrsten Sinema and Mark Kelly.

Sinema, who balked at Biden’s $3.5 trillion price tag and has become the target of progressives since, helped to broker the smaller infrastructure package.

Controversial union support

Pro-union incentives in the legislation are another contentious area cited by the Chamber of Commerce representatives, with Pastrick complaining that small businesses could face penalties for not having union workers.

Arizona, a right-to-work state, has emerged as a hub for producing electric vehicles. The legislation would provide a special tax credit for electric cars and trucks built by union workforces in other states, but not here.

"None of our Arizona manufacturers would be eligible," said Todd Sanders, president and CEO of the Greater Phoenix Chamber.

Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, said the reconciliation bill doesn't have the same bipartisan input that characterized the infrastructure bill that Biden signed into law in November. That $1 trillion legislation included investments in roads, bridges, broadband internet, electricity distribution and other areas.

"This $2 trillion Build Back Better bill is being written entirely by one party," he said.

The Chamber of Commerce representatives also criticized the legislation as potentially inflationary at a time when consumer prices levels have reached a 39-year high. They praised Sinema for withholding support, along with Sen. Joe Manchin, D-W. Va.

"It's a bill that's bad for Arizona and bad for the nation," Bradley said.

Reach the reporters at russ.wiles@arizonarepublic.com and stacey.barchenger@arizonarepublic.com.

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This article originally appeared on Arizona Republic: Arizona business groups, Ducey take aim at Build Back Better proposal