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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.

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Epic fail: The five best responses to the Chamber’s report on the EPA greenhouse gas proposal

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A week before the U.S. Environmental Protection Agency (EPA) released its new greenhouse gas emission rule for existing power plants, the U.S. Chamber of Commerce released a report attempting to pre-empt it, relying on a number of assumptions that turned out to be inaccurate – then interpreting its findings with strong doses of hyperbole.

We rounded up the best responses to the Chamber as it tried to block progress in this historic moment for taking action on climate change.

1. Even before it came out that the Chamber overestimated how ambitious the EPA rules would be, the New York Times’ Paul Krugman noted that the Chamber report actually proved that the cost of action is small.

“So the Chamber is telling us that we can achieve major reductions in greenhouse gases at a cost of 0.2 percent of GDP,” he wrote in a blog post. “That’s cheap!”

“You might ask why the Chamber of Commerce is so fiercely opposed to action against global warming, if the cost of action is so small,” he wrote in an op-ed the next day. “The answer, of course, is that the chamber is serving special interests, notably the coal industry — what’s good for America isn’t good for the Koch brothers, and vice versa — and also catering to the ever more powerful anti-science sentiments of the Republican Party.”

2. At New York magazine, Jonathan Chait noticed the same. In his piece “Business Lobby Tries to Frighten America About Clean Energy, Fails Utterly,” he explains how the Chamber fudged numbers and still managed to show that “we hardly have anything to fear.”

Absurdities litter the Chamber’s report, which Chait writes is “generated as attack-ad fodder.” The Chamber predicted yearly increase in energy demand through 2030 will be double what it’s been since 2000. (The increase in demand has held steady at 0.7 percent per year since 2000; the Chamber predicts 1.4 percent per year, while the U.S. Energy Information Administration predicts 0.9 percent through 2040). It assumed the EPA would call for a 42 percent reduction by 2030, though the administration has suggested a range of less ambitious targets over the last few years (and ended up this week calling for a 30 percent reduction by 2030). It predicts costs of energy 15 years out, not taking into account how technologies adapt and develop to meet requirements like these. And, Chait writes, “the study’s bad faith is made abundantly clear in its conclusion,” in which the Chamber pretends that the U.S. would be alone in reducing its emissions, ignoring the geopolitical reality that no other major country will act until we do. (Indeed, the day after the EPA proposal came out China began to make noises about following suit.)

3. The EPA, too, gave an unusually strong rebuttal to the Chamber as soon as the Chamber’s report came out, using descriptors like “unfounded” and “irresponsible speculation,” and saying, “the Chamber is using the same tired play from the same special interest playbook that is engineered to continue polluting and stall progress.”

The EPA’s blog post details two major areas in which the Chamber overestimates the costs of a proposal it hadn’t yet seen. One is that it assumed states would be required to build new natural gas power plants with carbon capture and sequestration (CCS) technology, and made that three-fourths of its cost estimate – but the EPA has indicated frequently that CCS would not be considered for existing power plants. The piece also noted that the Chamber made no mention of the huge costs of climate change that the EPA proposal attempts to avert – in 2012, for example, the U.S. had its second costliest year of natural disasters ever.

4. In “Chamber of Commerce Blasts EPA Rule That Doesn’t Exist,” ThinkProgress noted another benefit conveniently ignored by the Chamber (despite the ostentatious banners that drape its building): jobs.
The Chamber predicts a loss of 224,000 jobs by2030 due to the rule – which is about how many jobs the U.S. adds every couple months. Also, as the article notes: “The Chamber fails to account for jobs that would be created building wind turbines, solar panels, and other sources of renewable power,” said David Hawkins, NRDC’s director of climate programs. The Chamber also left out “the jobs to be created making our homes and businesses more efficient; and the jobs of cleaning up our dirty power plants.”

5. Given how thoroughly the Chamber has been delegitimized on this issue, it may not be entirely surprising that a number of major companies are distancing themselves from the Chamber’s opinion on it. Josh Israel of ThinkProgress reported that companies including Intel, UPS, Verizon, Coca-Cola, 3M, Lockheed Martin, MGM Resorts and Prudential ranged from supporting the EPA’s plan to saying they had no position on it or that the Chamber did not speak for them.

The article noted that a number of major utilities have said much more forward-thinking things about clean energy than the Chamber has (Ben Adler at Grist reported the same). It quoted me saying, “It’s another case of the Chamber not doing what’s best for the economy or the American people and not representing the full range of businesses in the economy.”

While the Chamber has been roundly criticized for its falsehoods and fear-mongering, the criticism alone may not be enough to keep it from moving the final EPA rule closer toward the coal industry’s goals. As Glenn Kessler of The Washington Post wrote, Republican lawmakers are using the Chamber’s hyperbolic findings despite their widespread debunking – he gives their use of the talking points four out of four Pinocchios. And the Chamber is following up, planning an ad buy in six to eight states, putting its misleading report on repeat. Other conservative groups will be mobilizing members to call their politicians about the issue, using “a bunch of doom-and-gloom price-hike figures,” as our Tyson Slocum says.

With the Chamber representing Big Coal and seeing truth as no obstacle, those of us who want a livable planet for current and future generations have our work cut out for us.

Sam Jewler is the communications officer for Public Citizen’s Chamber Watch program.