Business interests are emerging as winners in President BidenJoe Biden Former lawmakers sign brief to counter Trump’s claims of executive privilege in January 6 probe Biden appoints Sara Minkara as special adviser to the US on international rights of persons with disabilities Fox poll shows that Youngkin leads McAuliffe by 8 points among likely voters MOREThe climate and social spending plan was unveiled on Thursday.
The White House proposal to invest in clean energy, child care, education, housing, and other Democratic priorities has sparked an unprecedented lobbying barrage by American businesses and other advocates.
Across industries, business groups successfully lobbied lawmakers to make significant changes to key sections of the original $ 3.5 billion bill. His lobbying efforts revolved around Sens. Joe manchinJoe ManchinOvernight Energy & Environment – Presented by American Clean Power – Big Oil Day in Congress on Money – Progressives sign as Biden races to settle Hillicon Valley – Facebook launches rebranding campaign MORE (DW.Va.) and Kyrsten CinemaKyrsten Sinema Legislators Discuss Potential Commitment to Revive Drug Price Measure Healthcare Overnight – Presented by Altria – Drug prices outside of Biden’s framework, at least for now Progressives win again: No vote infrastructure tonight MORE (D-Ariz.), Who eventually sided with the business community on various issues.
Retailers, drug manufacturers, private insurers, and clean energy companies have become some of the top winners.
The White House plan does not raise corporate tax rates, keeping a core portion of the 2017 GOP tax cuts intact, in a surprising victory for business interests.
Business groups deployed hundreds of lobbyists on Capitol Hill and aired dozens of targeted advertising campaigns urging moderate Democrats to reject the tax increases, which they argued would harm the nation’s economic recovery.
Lobbyists expected Democrats to eventually raise corporate taxes from 21 percent to 25 percent. Those plans fell through last week after Sinema said it would not support any rate hikes.
“If you had asked most of my clients, no one was going to bet on any increase in corporate rates,” said Rich Gold, a partner at Holland & Knight, in a recent interview.
Retailers, who successfully lobbied Democrats to keep the 21 percent tax rate intact and increase IRS enforcement and implement a minimum corporate tax on businesses that avoid federal taxes, emerged as one of the biggest winners.
The Democrats’ proposed minimum tax won’t hurt most retailers, who generally don’t benefit from as many tax breaks as other industries.
“We are pleased that the President’s framework rejects a rate hike and instead focuses on the disparities in the current system that allows many highly profitable companies to not pay corporate taxes while retailers pay full freight,” said Hana Greenberg. , vice president of tax at the Retail Industry Leaders Association. “This direction represents a more equitable approach to the tax code, which is exactly what leading retailers have championed throughout the year.”
Other business groups do not support the 15 percent minimum tax, which will apply only to corporations with $ 1 billion or more in annual profits. Under the plan, the nation’s most profitable businesses will no longer be able to avoid all federal taxes by taking advantage of lucrative deductions and deferrals.
“Last year, America’s 55 most profitable corporations paid zero federal income taxes on approximately $ 40 billion in profits,” Biden said Thursday. “If they report big profits to their shareholders, they should be paying taxes, it’s that simple.”
The framework includes a 1 percent surcharge on share buybacks and a global minimum tax opposed by some large multinational corporations.
“We remain concerned that a multi-million dollar tax and spending bill will lead to higher inflation in the short term, will reverse our economic recovery, place American businesses at a competitive disadvantage and weaken future economic growth and job creation.” Neil Bradley, executive vice president and chief policy officer for the US Chamber of Commerce, said in a statement.
Pharmaceutical industry, private insurers
The initial framework does not include the Democrats’ bill to allow Medicare to negotiate drug prices, a key measure that many Democratic lawmakers campaigned on in 2018 and 2020.
The pharmaceutical industry did everything it could to defeat the proposal, airing multiple seven-figure ad campaigns and spending nearly $ 263 million on lobbying during the first three quarters of 2021, a record, according to OpenSecrets. Drug makers said the bill would hurt their ability to introduce new cures by reducing their revenues.
Multiple Democratic senators and several House Democrats in drug-laden districts opposed their party’s proposal. Those lawmakers, led by Sinema, are pushing for a more specific approach that focuses on reducing the out-of-pocket costs of drugs, namely insulin.
“We understand that this is a framework,” said Brian Newell, spokesman for Pharmaceutical Research and Manufacturers of America. “We remain prepared to work with policymakers this year to enact meaningful reforms that will reduce out-of-pocket costs of drugs for patients.”
The omission of drug prices has drawn harsh criticism from progressive lawmakers and groups representing seniors and patients.
“We are outraged that the initial framework does not lower prescription drug prices,” Nancy LeaMond, AARP’s executive vice president and director of advocacy and engagement, said in a statement. “It would be a monumental mistake if Congress failed to act on a historic opportunity to improve the lives of virtually all American families.”
The plan expands Medicare to cover hearing but not dentistry and vision, prompting the rejection of Manchin and Sinema. Private insurers, who make significant profits by providing those benefits under Medicare Advantage, lobbied against the proposal.
Rather than expanding government-run programs, the bill will expand health insurance and lower premiums by subsidizing private insurers under the Affordable Care Act, the route insurers pushed insurance companies to take. Democrats.
Clean energy, climate groups
The framework invests $ 555 billion to combat climate change, including $ 320 billion for clean energy tax credits, $ 130 billion for renewable energy development, and $ 105 billion for environmental resilience to combat extreme weather events.
Climate measures make up the largest part of the package, outpacing other huge investments in child care, preschool, housing, and child tax credits.
“If approved, the Build Back Better framework would be the largest climate investment in US history,” Evergreen Action CEO Jamal Raad said in a statement. “This package can really be transformative in tackling the climate crisis, promoting environmental justice, and creating millions of good jobs by building our clean energy future.”
The framework is a huge victory for clean energy groups, who were concerned that climate measures would fade after Manchin announced that he would not support the Democrats’ Clean Electricity Performance Program. Democrats say they can meet their climate goals without the program, which would have provided financial incentives for power companies to move away from fossil fuels.
“For the sake of our climate, the economy, and American workers, the solar industry is urging Congress to come together and pass this momentous legislation as soon as possible,” said Abigail Ross Hopper, President and CEO of the Energy Industries Association. Solar, in a statement.
Environmental groups are upset by a provision that provides grants, rebates and loans to fossil fuel companies to reduce methane emissions. The original bill would have enacted a tariff for methane emitters, but the measure was scrapped after oil and gas producers successfully lobbied Texas Democrats to oppose it.