Hours before delivering his State of the Union address last month, President Biden called the chief executives of General Motors and Cisco Systems to ask for advice on the state of the American economy and share how he planned to talk about it. .
He then headed to the Capitol, where he promised in a speech to increase the rate of the new minimum tax his administration is imposing on large corporations, “so that ultimately all large corporations pay their fair share.” We will start.''
“I also want to end tax cuts for Big Pharma, Big Oil, private jets, and huge executive salaries,” Biden continued, adding, “Stop it now.”
The move is emblematic of Biden's cozy and combative relationship with America's business leaders, which extends to the nation's economy, federal policy and now his 2024 White House campaign. It's spreading.
The president has sought re-election this fall by flattering and shaming American companies. Business leaders have made record profits on his watch and enjoyed open channels with his administration, but they have pushed back against some of his biggest policy decisions.
Many of Biden's economic policies have a certain symbiotic relationship with corporate leaders. His industrial policy efforts rely heavily on corporate tax breaks, which he endorses at ribbon cuttings across the country. The Climate Change and Advanced Manufacturing Act, which Biden signed into law in 2022, features significant tax breaks for companies that invest in the production of semiconductors and solar panels. Other strategic supplies. Republicans deride these incentives as “corporate welfare.”
Mr. Biden frequently seeks advice from executives on a range of economic issues, including supply chain disruptions, infrastructure investment and worker training. Last fall, he impressed Calvin Butler, chief executive of utility giant Exelon, during a two-hour meeting with his top executives in the Oval Office.
“He was working on it, and that's all I can say,” Butler said in an interview. “At about the hour mark, they kept hitting him and saying, 'Hey, look, we've got other things to do.' But he wanted to keep doing it. He kept talking. I wanted to continue.”
But Biden, who is seeking re-election, is leaning heavily into populist attacks on the executives and companies involved. He loves talking about raising corporate taxes. He also blamed large corporations by name for raising the prices of some essential goods. He blamed others for reducing the quantities of snack foods such as candy bars without lowering their prices.
Mr. Biden also introduced into his administration an economic philosophy that relies heavily on federal intervention in private markets. This includes investments in infrastructure and industry that business leaders generally support.
However, it also includes environmental, financial and other regulations aimed at reducing market risks. Businesses oppose these efforts in addition to the government's aggressive antitrust enforcement and other efforts aimed at promoting competition.
As a result, Mr. Biden's relationship with American companies is “complicated,” said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, a large business lobbying group in Washington. said.
Mr. Bradley said Mr. Biden and his economic team have been open and thorough in their outreach to business groups, but he is dissatisfied with their policy choices. House officials estimate that federal agencies under Mr. (defined as having an impact on US dollars).
This is in contrast to the Trump administration, which adopted less consistent relief measures and moved chaotically from crisis to crisis. Mr. Bradley said his executives are struggling with which combination they prefer.
“While the Trump administration can be seen as more uncertain, the direction of regulatory efforts was to reduce regulatory costs,” he said. “Here in the Biden administration, we have a pretty good idea of where they're going to go. How catastrophic will it be from a regulatory level standpoint? And interestingly, 'chaos is better. There are a lot of people who say it's good.”
Biden regularly meets with leaders of large and small businesses, visiting dozens of them during his time in office. Executives who have spoken to the president and his top aides said Mr. Biden and his team are listening intently to companies' concerns, even when they have clear disagreements on the policy issues at hand.
Exelon's Mr. Butler said he asked Mr. Biden at the White House to quickly clear permitting issues and other hurdles for building new energy infrastructure. Mark Cuban, a prominent investor and founder of Cost Plus Drugs, said in an email that his conversations with Biden focused primarily on health care, including negotiating Medicare. It also included what he called the “great job” the president did above. Lower prescription drug prices.
Microsoft CEO Brad Smith said in an interview that he and Biden discussed regulation of artificial intelligence, as well as implementation of the infrastructure bill and the CHIPS/Science Act. He praised Biden's efforts to strengthen cybersecurity, saying that Biden “has done more during his presidency than any previous president” on this issue.
Smith added that Biden's staff has “a wide range of expertise that is applied at a deep level.” Under Mr. Trump, “the staff has gotten leaner,” he said. “Many important jobs didn't have that many people.”
Other executives have also criticized all or some of Biden's policies. Oil and gas industry executives have criticized the government for suspending permits for new natural gas export terminals. JPMorgan Chase CEO Jamie Dimon called Biden's climate change law and other green energy initiatives “inflationary” in an interview with CNBC earlier this year.
Ken Griffin, the founder of financial firm Citadel and a major Republican donor, sharply criticized Biden's economic pitch in a November interview with Bloomberg. “Whoever told him to run for Bidennomics doesn't know how to read an economics textbook,” Griffin said.
Mr. Biden's outreach to executives is similar to the approach taken by President Barack Obama and his team, according to business leaders and administration officials who also served under Mr. Obama.
But Mr. Biden differs from Mr. Obama and Mr. Trump in several ways. Executives who spoke with him say the president made it clear in their conversations that part of the measure of economic success is “workers,” measured by the creation of high-wage union jobs. . He has embraced intense federal scrutiny of mergers and other antitrust issues to a degree that even Mr. Obama did not.
He also has deeper entanglements with policy and corporate behavior. Biden's climate policy combines corporate tax breaks for domestic production with a set of tough regulations aimed at rapidly reducing fossil fuel emissions. In some cases, agencies under Mr. Biden's administration have finally eased some proposed regulations, apparently to address business concerns, administration officials say. .
Lael Brainard, who heads the White House National Economic Council, said in an interview that the president's corporate tax cut would “promote a across-the-board tax cut for companies, regardless of whether they have investments or not.” He said it was deviating from his ideals. It's good for America, creates jobs, and supports the transition to clean energy. ”
Democratic pollsters are encouraging Biden to amplify that message in his re-election campaign. They want to highlight plans to increase taxes on big business, while criticizing companies that raise prices to inflate profits and charge customers “junk fees” such as concert tickets. Their data suggests that corporate taxation is a key vulnerability this fall for Trump, who cut corporate tax rates during his tenure and is set to face Biden in a 2020 rematch.
Voters “want to feel like the president is on their side against people they think are oppressing them,” said Evan Ross Smith, chief pollster at the Democratic group Blueprint. talk. “Voters currently have no sympathy for big business,” he added.
Bradley, of the U.S. Chamber of Commerce, said many executives were outraged by the language, particularly the way Biden called out companies for asking for price hikes and cutbacks. But some executives have dismissed or downplayed Biden's tax proposals and repeated calls for businesses to pay their “fair share” as campaign pitches.
“Recognizing how D.C. works and recognizing that this is political season, I tend not to be too high or too low on any point,” Butler said.
Microsoft's Smith said this is an area of disagreement regarding his good relationship with the president.
“We're not going to be the first company to agree to a tax increase,” he said. But, he later added, “tax rates in our country are high enough that our first reaction is typically that he's talking about someone else.”