The Chamber of Litigation – part 2
Examining the U.S. Chamber of Commerce’s involvement in
some of the most notorious civil cases of the last decade.
The Chamber of Litigation – part 1
Despite condemning civil lawsuits, the U.S. Chamber of Commerce is
itself a prodigious litigator.
The Gilded Chamber
Bigger, Richer, and (Still) Undisclosed.
Sacrificing the Pawns
How the U.S. Chamber of Commerce Recruits Small
Business Owners to Lobby Against Their Own Self-Interest.
Latest Blog Posts
- Civil Justice
- Human Rights
- Money in Politics
- Workers' Rights
Political rhetoric blaming government regulations for stifled small business growth is at an all-time high, and it’s no surprise that the U.S. Chamber of Commerce is behind most of it. The Chamber has a long history of opposing regulations under the guise of being a voice for small business. Whether it’s 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, the Chamber has yet to meet a regulation it didn’t want rolled back.
The Chamber also called for the repeal of the Affordable Care Act (ACA), supporting the American Health Care Act, despite the 24 million who would lose health care. But it doesn’t stop there. Tom Donohue and his big business allies would also like to see a repeal of 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 and has vowed to fight against the fiduciary rule, which protects retirement savers from dishonest investment advisors.
Not only has the Chamber come out in favor or nearly every CRA challenge we’ve seen since Trump took office, it is also a strong supporter of the Regulatory Accountability Act, which 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 essentially come to a halt. Just last week, the Chamber released two video ads, targeting Senators Heitkamp and McCaskill, urging them to support the RAA.
All of this, under the clever, yet dishonest PR scheme that regulations hurt, and never help, small businesses. It makes perfect sense- if the Chamber and big business want to accomplish the corporate windfall that would result from a deregulatory agenda, the best way to do so is to tout themselves as the advocate of Main Street.
However, many of the regulations that Donohue mentions don’t even apply to small businesses, and others, like the Clean Water Rule and the CFPB actually help small businesses.
While these conservative talking points often misleadingly focus on the burdens that regulations place on small business, surveys and poll data show that the very owners of these small businesses generally do not agree with their alleged advocates. According to a poll by Small Business Majority, 86% of small business owners agree some regulation of business is necessary for a modern economy, and 93% of them agree their business can live with some regulation if it is fair, manageable and reasonable. What’s more, 78% of small employers agree regulations are important in protecting small businesses from unfair competition and to level the playing field with big business. Another 79% of small business owners support having clean air and water in their community in order to keep their family, employees and customers healthy, and 61% support standards that move the country towards energy efficiency and clean energy. This runs directly contradictory to the Chamber’s lobbying for the repeal of Stream Protection rule, and the Oil Anti-corruption rule, which would leaving communities susceptible to water pollution by coal miners, and enable oil tycoons to avoid transparency.
Regulations do help small businesses and a lack of regulation can have detrimental effects. Just yesterday, a small business owner testified before the House Small Business Committee and urged lawmakers to ensure that public protections are in place to give his catering business fundamental confidence that the food and water they serve and consume is safe. Regulations provide the market with a basic level of certainty to ensure we are protected from tainted food, unsafe drugs, poisoned water, and polluted air.
There are other regulations, such as anti-trust laws that address price discrimination and price fixing, that help small business owners by leveling the playing field against larger businesses. The Chamber also fails to mention the many regulations enforced under the Small Business Administration that small businesses are prioritized for a certain set of government contracts.
When regulations don’t exist, it is typically small businesses who suffer most. The Deepwater Horizon explosion in the Gulf of Mexico devastated small businesses in the tourism and fishing industry, and not surprisingly it was the U.S. Chamber of Commerce who went to court on behalf of British Petroleum and sought to keep the local small businesses out of court, all the while claiming to be the voice of Main Street.
While the Chamber is spending big bucks to lobby against commonsense protections, it is crucial to remember that clean air, clean water, and regulation of Wall Street protect the public. Clear rules protect small businesses and manufacturers from powerful interests who use their financial advantage to try to rig the system in their favor.
In a previous piece, we wrote about the U.S. Chamber of Commerce’s very busy litigation practice, the issues the Chamber litigates most frequently, the government agencies it most often opposes, and the giant multinational corporations its litigation most often supports.
In a newly-released report, we examine a few dozen of the most egregious cases the Chamber has litigated. From financial crisis-related litigation to cases stemming from BP’s Deepwater Horizon oil spill to Keystone XL to fracking to the Clean Power Plan to a case involving the Buckyball magnetic toy that injured over 1,700 children, the Chamber has been actively involved in some of the most notorious civil cases of recent years. Some of the lowlights of the Chamber’s litigation include:
- Litigation related to the Deepwater Horizon oil spill in the Gulf of Mexico.The Chamber filed an amicus brief on behalf of BP on 4 separate occasions, arguing for legal technicalities that would eliminate or reduce civil fines and penalties that government agencies sought to impose upon BP as well as obstruct class action litigation brought by small businesses against BP.
- Litigation related to the Buckyball magnetic toy responsible for injuring thousands of children. The Chamber filed an amicus brief in support of the CEO of the company that sold Buckyballs, a toy that injured over 1,700 young children. It argued that he should not be personally liable for recall costs in spite of the fact that he had had ample warning of the danger posed by the toy and had indeed fought recall efforts, resulting in a delay that led to further sales—and further injuries.
- Litigation related to for-profit Corinthian Colleges’ fraudulently misleading students. The Chamber filed an amicus brief in support of Corinthian Colleges’ effort to prevent former students from suing it in court for fraud despite the fact that Corinthian was already the subject of multiple investigations targeting similar conduct and had already settled a previous fraud case involving similar allegations.
- Litigation related to the Keystone XL pipeline. The Chamber sided with the Canadian energy giant behind the pipeline over American ranchers and farmers who didn’t want the pipeline being routed through their land.
- Fracking Litigation. The Chamber fought to strike down municipal zoning ordinances to prevent fracking.
- The Clean Power Plan. The Chamber sued the EPA to block President Obama’s signature initiative to reduce greenhouse gas emissions at power plants.
- Minimum Wage Litigation. The Chamber fought to strike down Seattle’s law raising the minimum wage to $15 an hour, claiming that it would be bad for workers.
- GMO Labeling Litigation. The Chamber filed an amicus brief opposing Vermont’s GMO labeling law, arguing that it did not advance a legitimate state interest and impinged upon corporations’ free speech rights.
- Alien Tort Statute Litigation. The Chamber filed amicus briefs in cases involving Nigerian and Papua New Guinean plaintiffs who alleged that foreign multinationals had been complicit in gross human rights abuses including rape, pillage, and aerial bombardment of civilians. In both cases, public protests against the industrial sites in question were brutally repressed by the government, allegedly at the behest of and assisted by the corporate defendants.
- Walmart Gun Sales Litigation. The Chamber filed an amicus brief supporting Walmart’s effort to prevent shareholders from voting on a proxy resolution calling for the company’s board to examine its sale of high capacity firearms.
- Labor Rights for Gig Economy Workers. The Chamber sued the city of Seattle to block its law allowing Uber and Lyft drivers to unionize.
- Litigation against Goldman Sachs for fraudulently misleading investors. The Chamber filed an amicus brief supporting Goldman Sachs in its efforts to make it more difficult for defrauded investors including pension funds to sue as a result of huge losses they suffered during the financial crisis.
Taken as a whole, the Chamber’s legal filings show it to be attempting to advance an exceptionally dangerous agenda via the courts. This agenda includes:
- Invalidating important regulations protecting workers, consumers, and the environment, including rules promoting clean air, clean water, greater information, and prudent banking practices. The Chamber’s opposition to regulation is almost blanket, even extending to cases where the rule at issue would correct obvious market failures.
- Making it harder to hold corporations accountable. The Chamber seeks to make it more difficult for consumers and small businesses harmed by corporate malfeasance to go to court. It also argues for more limited corporate prosecutions and for smaller penalties. Finally, it argues against U.S. jurisdiction in cases where corporations are accused of human rights abuses overseas. The Chamber’s ultimate goal in these cases is the same: corporate accountability should be minimized and/or eliminated.
- Putting profits before people. The Chamber takes a very robber baron view of business. Whether defending Wall Street speculation or Big Pharma price gouging or appalling fast food labor practices or new economy exploitation of gig economy workers, the Chamber is unconcerned with how dubious business practices harm workers and consumers.
- Favoring Big Business over small businesses. While the Chamber claims to be the voice of small businesses in Washington, when it comes to its litigation practice, it can be relied upon to favor the giant multinational corporations that fund it. Whether it’s by arguing for reduced access to the courts, opposing stricter supervision of Wall Street banks designed to reduce the risk of future financial crises, fighting for Big Oil against emissions controls, or supporting Big Pharma’s schemes to keep drug prices sky high, the Chamber always comes down on the side of its deep-pocketed Big Business patrons, ignoring the impact on small businesses.
The Chamber’s use of the courts to advance its Big Business-friendly, anti-consumer, anti-worker, anti-environmental agenda is important in considering the future of the Supreme Court. Some of these cases reached the Supreme Court; others may yet reach the Supreme Court. Progressives should demand that any future justice recognize the tremendous importance of regulations that protect workers, consumers, and the environment and refuse to put profits before people as the Chamber so often argues our courts should do.
The U.S. Chamber of Commerce’s war on workers was dealt a significant blow when fast food king Andy Puzder’s nomination to be Secretary of Labor collapsed. As we detailed three weeks ago, Puzder and the Chamber were simpatico on many issues of concern to labor. However, it didn’t take the Chamber long to pick itself back up and open the next front in its war on workers. We’re only midway through the week but the Chamber has already both supported Republicans in Congress who are using the Congressional Review Act (CRA) to push to undo a commonsense worker protection regulation and released a report outlining pro-worker Obama-era policies at the National Labor Relations Board that it wants reversed.
First, a little background: The CRA allows Congress, by simple majority vote in both chambers, with very little debate and no possibility of a filibuster, to undo recently issued rules so long as the president does not veto the legislation (see Samantha Bee for our favorite explainer yet). Already, the Stream Protection Rule, Social Security Administration Rule, and the Oil and Gas Industry Anti-Corruption Rule have been repealed via the CRA, leaving communities susceptible to water pollution by coal miners, enabling oil tycoons to avoid transparency, and allowing those with severe mental illness to purchase guns . Congress is threatening to hold CRA votes on dozens of other important rules, which may result in Americans losing critical health, safety, and environmental protections.
The Chamber’s main labor attack this week is focused on rolling back an important worker protection rule known as the Volks rule, which clarifies an employer’s ongoing obligation to maintain records occupational injuries or illnesses for five years. The Chamber-backed CRA challenge, H.J. Res. 83, was introduced by Rep. Bradley Byrne (R-AL) and is expected to be voted on in the House this week. It comes as no surprise that the Chamber donated to Byrne in both 2014 and 2016, and is avidly working to lobby for his resolution and drum up employer support.
Just yesterday, the Chamber sent a “Key Vote Alert” to House members, making note that it “will consider including votes related to it in [its] 2017 How They Voted scorecard.” (With the amount of money the Chamber spends supporting Republican candidates, we’re sure this got members’ attention).
The five year record keeping requirement formalized by the Volks rule is not new. The Occupational Safety and Health Administration (OSHA) had been holding employers accountable to this standard for 40 years prior to 2012, when the U.S. Court of Appeals for the D.C. Circuit overturned this decades-long precedent in AKM LLC (Volks) v. Secretary of Labor. This hindered OSHA’s ability to cite employers for recordkeeping violations and in response, OSHA issued the Volks rule on December 19, 2016 to reaffirm its procedures in advance of any other federal courts reviewing OSHA’s recordkeeping regulations.
The Chamber asserts that the Volks rule “will improperly subject millions of American businesses to citations for paperwork violations, while doing nothing to improve worker health and safety.” What it isn’t mentioned, of course, is that by inspecting accurate data from employer records over a period of several years, OSHA is able to effectively enforce its recordkeeping policies, ensuring employers keep accurate records of employee injuries. With accurate data, OSHA can more effectively identify and target the hazards putting workers at the greatest risk. Likewise, employers can proactively use the records to keep their own worksites safe.
If employers do not keep accurate injury logs, even greater numbers of American workers are likely to suffer preventable fatalities and injuries on the job. The Chamber fails to recognize that this issue is quite literally a life or death matter. Already, about 4,800 people die on the job every year from injuries, (but an estimated 50,000 people die each year from occupational illnesses they contracted from work, like silicosis and chronic beryllium disease), and about 3 million people are injured at work annually. The requirement that employers keep years’ worth of records has allowed OSHA to better enforce the law and ensure companies maintain accurate records of employee injuries. With accuracy, OSHA can understand where these deaths and injuries are occurring, under what circumstances, and how they can be prevented.
Undoing the Volks rule will set us back more than four decades, undoing much of the tremendous progress that has been made in improving workplace safety. By supporting this CRA, the Chamber and its GOP allies are once again pushing the interests of big business instead of pushing efforts to improve workplace safety. It’s yet another example of the Chamber and the GOP placing profits before people.
This week, the New York Times wrote a less than optimistic piece on the future of Social Security, Medicare, and Medicaid. The article named the usual suspects aiming to slash these critical public safeguards– most notably, Mick Mulvaney, Tom Price and members of the House Freedom Caucus. But, the article left out one important player: The U.S. Chamber of Commerce, which has been one of the staunchest opponents of these critical programs it dismisses as “the main driver of deficits” and has been working to oppose them for decades.
The trade association’s war on Social Security dates back to the program’s very beginning, when the Chamber was a steadfast opponent of President Franklin Delano Roosevelt’s New Deal agenda, arguing that Roosevelt was attempting to “Sovietize America.” The Chamber lost its battle against the New Deal and Social Security became law.
Not only did America remain a capitalist stronghold even after Social Security became law, Americans secured additional safety net protections like Medicare, guaranteed medical care for the aged or disabled. Roughly 1 in 5 Americans receive health care coverage through Medicare; in 2015, Medicare provided health insurance coverage to 55.3 million Americans.
Despite the overwhelming success of these programs in reducing poverty and providing health care more affordably than private insurance, the Chamber never misses an opportunity to call for their demise. In 2005, the Chamber supported President George W. Bush’s attempt to privatize Social Security by joining the business-funded and misleadingly-named Coalition for the Modernization and Protection of America’s Social Security (COMPASS). Despite the fact that Bush and the Chamber pushed aggressively for privatization, their efforts were ultimately unsuccessful, as the cuts to these vital protections was widely unpopular with the American public, and still is according to polling.
Undeterred, the Chamber continued its crusade against America’s social safety net. In 2013, Bruce Josten, the Chamber’s then top lobbyist, delivered a speech to Chamber board members outlining the “10 truths about America’s entitlement program.” In today’s political parlance, we would call these “10 truths” “alternative facts”.
We’ll spare you the pain of myth busting each of the Chamber’s ten “truths,” because in one way or another, the Chamber’s arguments all stem from the same place. Anyone who’s ever walked through an airport or waiting room while Fox and Friends was airing has heard the same old tired talking points: entitlement programs are large, expensive, and will only continue to become larger and more expensive, and something must be done now. The Chamber never mentions all of the people who benefit from social insurance programs. 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.
Moreover, when the Chamber repeatedly stated in 2013 that “the cost to make these programs financially solvent for the next 75 years is almost $40 trillion,” it ignores the fact that unless the Chamber has been given a crystal ball that we’re unaware of, it is nearly impossible to know what the fiscal landscape will be in 2088. Nor does the Chamber mention that it would be very easy to put Social Security and Medicare on firm fiscal ground simply by looking at the multitude of policies that could provide more revenue for these programs.
In July of 2016, the Chamber signaled support for the deceptively-named Save Our Social Security (S.O.S.) Act legislation that would raise the full retirement age from age 67 to 69, beginning in 2022. Then in August of 2016, the Chamber addressed an open letter to presidential debate host Lester Holt suggesting that spending on Social Security, Medicare, and Medicaid was out of control and urging him to question the candidates about their plans for these programs.
While the Chamber and the GOP appear to agree on nearly every issue, it seemed to rub the Chamber the wrong way that Donald Trump, the GOP presidential standard-bearer, had promised on 13 separate occasions to not cut Social Security, Medicare, or Medicaid.
Which brings us to present.
Since the election, President Trump has adopted most of the Chamber’s agenda, and he’s even walked back his promise to protect Medicaid. He hasn’t, however, said a word about Social Security or Medicare. Meanwhile, U.S. House Speaker Paul Ryan has made it very clear that he intends to move full steam ahead on destroying Medicare. He will without a doubt have the Chamber as an ally in that fight.
In Tom Donohue’s 2017 State of American Business address, he once again reaffirmed the Chamber’s commitment to playing a leading role in gutting these programs. “It is simple that there can be no solution to the nation’s long-term fiscal imbalances and our exploding national debt that does not involve reforming Social Security, Medicare, and for the state budgets, Medicaid,” he said. In Chamber-speak, “reforming” means “cutting.”
The simple fact is this: The Chamber has a long history of leading the charge to destroy America’s social safety net. And while we have yet to see whether or not Trump will keep his promises to protect Social Security and Medicare, so far the signs are not promising. With Speaker Ryan, the Republican-controlled Congress, OMB Director Mick Mulvaney, who referred to Social Security as a “Ponzi scheme,” and Tom Price, as the Health and Human Services Secretary who wants to privatize Medicare all in favor of gutting social insurance programs, 2017 may unfortunately be the Chamber’s likeliest opportunity to win its decades-long battle against Social Security and Medicare.
It’s great to see the impact of the loud and clear pushback lawmakers are getting in townhalls in districts across the country, and that average citizens are making sure their voices are being heard. The upcoming war over protecting Social Security and Medicare and Medicaid is going to be a another case where American voters are not going to sit back quietly and watch the hard-won, essential protections that keep their families safe and healthy be stripped away so that huge corporations can make millions more in profit.
Now it’s time for the Chamber (and the companies that fund the lobbying behemoth) to get some of this much-deserved flak as well.
It comes as no surprise that the U.S. Chamber of Commerce is feeling “optimistic” about Donald Trump’s pick for Secretary of Labor, fast food baron Andy Puzder. Puzder is the CEO of CKE Restaurants, the parent company of the Carl’s Jr. and Hardee’s burger chains.
While we can’t say exactly when the Chamber first fell for Puzder, we can trace their meet-cute back to at least 2015, when Puzder participated in a U.S. Chamber of Commerce panel criticizing the Obama administration’s policy that would allow parent companies to be held liable for franchisee misconduct.
The Chamber’s relationship with Puzder can be defined entirely by shared interests, whether it’s fighting against the Affordable Care Act (ACA), sparring with the National Labor Relations Board (NLRB), opposing the overtime rule, or resisting any efforts to increase the minimum wage.
Puzder has indeed stolen the Chamber’s heart, but unfortunately, that’s not the only thing he’s apparently stolen. Throughout his tenure as CEO, Carl’s Jr. and Hardee’s restaurants have been accused of over 1,000 wage and hour violations. A recent survey of workers at Carl’s Jr. and Hardee’s revealed that nearly one-third of workers reported that they were not paid overtime to which they were legally entitled.
Under the Obama Administration, the Department of Labor (DOL) was able to secure nearly $1.6 billion in back pay for over 1.7 million workers whose employers ignored wage and overtime laws. If confirmed, what guarantees do we have that Puzder would continue this important work given CKE’s checkered past in this domain? What’s more, Puzder would almost certainly oppose the implementation of the overtime rule which would make millions of Americans newly eligible for overtime pay. He argues that what workers lose in wages by being exempted from overtime, they “gain in stature and sense of accomplishment.” Of course, the thousands of poorly paid workers at Carl’s Jr. and Hardee’s might disagree with Puzder’s platitudes. In any event, the Chamber and its beau are on the same wavelength when it comes to overtime. The Chamber has led the fight against the overtime rule, including by filing a lawsuit in Texas to challenge the rule’s implementation.
If Puzder and the Chamber are on the same wavelength when it comes to overtime, it’s a mind meld when it comes to the minimum wage. In a report published by the Senate Committee on Health, Education, Labor & Pensions, employees of Puzder’s fast-food chains share their stories of being paid barely livable wages. Even more damning, Puzder has stated that, “[s]ome jobs don’t produce enough economic value to bear the increase [to the minimum wage].” Just like its main man, the Chamber also refuses to acknowledge that an increase in the shamefully low minimum wage is not only good for workers, but good for businesses too and has vowed to oppose any significant increase as part of its 2017 priorities.
Puzder’s record as CEO of CKE Restaurants has been defined by a shocking number of alleged violations, both in the aforementioned wage and hour theft, but also in safety protections for employees. Unfortunately, these are the very worker protections he would be charged with enforcing if confirmed. Under his leadership, Carl’s Jr. and Hardee’s restaurants racked up numerous alleged OSHA violations, including employees requiring hospitalization because of serious burns. If confirmed, Puzder, whose actions seem to indicate that he opposes the DOL core functions of regulating and enforcing workplace health and safety, could roll back important safety protections for workers.
As if these serious safety violations weren’t bad enough, CKE Restaurants was also accused of stopping contributions to the 401(k) retirement plans of 130 employees at its corporate headquarters, and a shockingly high percentage of Carl’s Jr. and Hardee’s workers reported experiencing sexual harassment and discrimination on the job. Not surprisingly, eliminating workplace protections (even those as simple as a notice of their employees’ rights, protection from retaliation, and job safety) are included in the Chamber’s efforts to push so-called “right to work” laws in the states and we don’t doubt that it would enjoy having a Labor secretary who is similarly opposed to worker protections.
Perhaps most shockingly of all, Puzder has been quoted saying that he would like to replace his employees with robots, as machines are “always polite, they always upsell, they never take a vacation, they never show up late, there is never a slip-and-fall, or an age, sex or race discrimination case.” As if these two weren’t already nuts (and bolts) about each other, it looks like the Chamber may be able to help with this too!
Both Puzder and the Chamber have voiced ardent opposition to the Affordable Care Act, which, if repealed, would leave nearly 30 million Americans without health insurance coverage. The Chamber has worked tirelessly to undermine efforts to expand access to healthcare and to reduce industry profiteering. From spending $86 million to oppose the ACA in 2009 to undermining the funding sources of the law in 2014, the Chamber consistently sides with health insurers and Big Pharma against providing quality affordable health care for average Americans. Puzder, echoing the Chamber, claimed that “Obamacare is the craziest thing in the world and does not make sense.” What really doesn’t make sense is that Puzder, who opposes mandatory sick leave policies for workers and wants to abolish the Affordable Care Act, apparently enjoyed huge reimbursement checks from his company for medical and dental costs. According to a report by the Restaurant Opportunity Centers, in just one year, Puzder’s reimbursements totaled $61,000; in contrast, only 9 percent of CKE non-managerial staff have access to health-care through their employer. This begs the question, does hypocrisy count as a pre-existing condition?
The Labor Department was created “to foster, promote, and develop the welfare of the wage earners of the United States, to improve their working conditions, and to advance their opportunities for profitable employment.” It appears that with help from Big Business, the anti-Labor secretary will do just the opposite.
So there we have it, a modern day robber baron bromance rooted in destroying worker protections, preventing employees from accessing healthcare, and wage theft. As a millennial might say, the Chamber would swipe right on Puzder faster than you can say, “Fight for 15!”
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.