Monday, September 27News That Matters

How Corporate America Views President Biden

In the waning days of the Trump administration, the schism between big business and the Republican Party burst into the open.

While corporate America notched real gains over the last four years, including lower taxes and a looser regulatory environment, President Donald J. Trump routinely upset major chief executives. The Jan. 6 riot at the Capitol and the refusal of Mr. Trump and many congressional Republicans to recognize the election result was the breaking point, culminating in many large companies condemning Mr. Trump and cutting off support for his allies in Congress.

But just because big business is at odds with the Republican Party doesn’t mean it’s ready to embrace every aspect of the Democratic agenda. With President Biden seeking to undo much of Mr. Trump’s legacy, including some initiatives championed by big business, chief executives are approaching the new administration with a mix of optimism and apprehension.

At the most fundamental level, many executives appear grateful to move on from the Trump administration, which routinely surprised companies with abrupt changes to trade policy, immigration rules and more.

“Business hates uncertainty, and we’ve had chaotic uncertainty now for some time,” said Andrew Liveris, who stepped down as chief executive of DowDuPont in 2018 and is now a board member at IBM. “Trying to navigate through it as a company has been very tough.”

But the prospect of higher corporate taxes and new regulations that might curtail profits is unlikely to sit well with a business community struggling to recover from the pandemic. “The rubber will hit the road when we get around to things like taxes and climate tariffs,” Mr. Liveris said.

Mr. Biden began putting his policy agenda to work on Inauguration Day, signing 17 executive orders and actions in the Oval Office.

One recommitted the United States to the Paris climate accord, a move that was met with praise from business leaders, many of whom objected to Mr. Trump’s withdrawal from the pact in 2017. On Twitter, the Microsoft co-founder Bill Gates cheered the move, saying that “the United States also has the opportunity to lead the world in avoiding a climate disaster.”

Other orders shielded “Dreamers” from deportation and named an official response coordinator for the pandemic.

Sundar Pichai, the chief executive of Alphabet, applauded on Twitter the “quick action on Covid relief, the Paris Climate Accord, and immigration reform,” and said his company looked forward “to working with the new administration to help the US recover from the pandemic + grow our economy.”

But at least one early move by Mr. Biden — his revoking of a permit for the Keystone XL pipeline — was met with swift condemnation from some business leaders.

Jay Timmons of the National Association of Manufacturers, a group that just weeks ago called on the cabinet to consider removing Mr. Trump from office, criticized the move, arguing that the pipeline would have created 10,000 union jobs.

The Chamber of Commerce, another pro-business group that took an increasingly hard line with Mr. Trump in the last weeks of his presidency, also opposed the move, calling it “a politically motivated decision that is not grounded in science.”

“It will harm consumers and put thousands of Americans in the building trades out of work,” said Marty Durbin, an executive at the chamber.

More skirmishes may be on the horizon. Mr. Biden has signaled that he is open to raising taxes on corporations.

“I’m sure there will be conflict on the tax issue for corporations,” said Richard A. Gephardt, a Democrat and former House majority leader.

The prospect of higher individual taxes is also likely to face pushback from wealthy executives. In New York, Gov. Andrew M. Cuomo recently floated a tax increase on high earners. Should the federal income tax rate go up, too, it could result in an effective tax rate of more than 60 percent for some well-paid New Yorkers.

“That’s pretty onerous,” said Kathy Wylde, chief executive of the Partnership for New York City, a trade group that represents many large employers.

Ms. Wylde added that potential changes to taxes on real estate, which Mr. Trump cut, could also be a cause for concern among executives. “There’s probably nervousness in the real estate community,” she said.

But an increase in the corporate tax rate is a price companies may be willing to pay in exchange for an administration with more predictable stances on critical issues like trade and tariffs.

Frequently Asked Questions About the New Stimulus Package

The stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more.

Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read more

This credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.

There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.

The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.

“They may like the Biden administration more on trade than they did Trump, because he jerked things around so much,” Mr. Gephardt said.

For the moment, there is a palpable sense of relief in board rooms across the country, with executives exhaling after four years during which Mr. Trump’s unpredictable outbursts led to abrupt changes in policies, and sometimes targeted companies.

“The markets are relieved to be on the other side of all the tumult and uncertainty that was Donald Trump,” said Brad Karp, chairman of the law firm Paul, Weiss. “You woke up in the morning and saw the president imposing tariffs, or closing borders, or retaliating against a company. Business needs predictability and certainty.”

And as Mr. Biden works to get the coronavirus under control, companies large and small will be rooting for the new administration. The pandemic has decimated the economy, sapping businesses of sales and leading to mass unemployment. Measures the Biden administration is considering, including a new stimulus package and a large government infrastructure program, could help bolster an economic recovery.

“Getting Covid under control will be good for business,” Mr. Karp said. “A stimulus plan will be good for the economic recovery. Infrastructure spending will be good for the economy.”

Immigration is another issue where big companies have cause for optimism. Mr. Trump curtailed immigration and put caps on the H1-B visa program, which allows foreigners to work in the United States, a shift that caused headaches for many companies.

“America-first policies don’t work for global business,” Ms. Wylde said. “Those will not be missed.”

Mr. Biden signed an executive order mandating the wearing of masks on federal property. By contrast, Mr. Trump politicized mask wearing, further disillusioning business leaders who watched, dismayed, as arguments about masks erupted in their stores.

“Trump lost a lot of the business community on the mask stuff,” Ms. Wylde said. “Without a mask mandate, the enforcement agents became the business. That was a major issue for retailers.”

Already, some executives who spoke approvingly of Mr. Trump’s policies are welcoming the Biden administration. Nick Pinchuk, the chief executive of Snap-on, a tool company based in Kenosha, Wis., said he was hopeful that the federal government would support efforts to bolster the working class, such as retraining efforts and investments in education.

“It remains to be seen, but it looks like this administration could prioritize those things,” Mr. Pinchuk said. While not all of his employees were pleased with the election result, he said, they largely disapproved of Mr. Trump’s meddling with the democratic process and seemed willing to give Mr. Biden a chance.

“The business world wants the Biden administration to be successful,” said Blair Effron, a co-founder of Centerview Partners, an advisory firm that works with many large companies. “People understand the urgency of the moment for this country, politically, economically, healthwise and socially.”