Why Many CEOs Still Support Biden Over Trump

Why Many CEOs Still Support Biden Over Trump

When White House Chief of Staff Jeffrey Zients met with dozens of top executives in Washington this month, he came across a familiar list of corporate complaints about President Biden.

Leaders of the Business Roundtable, a group that represents some of the country’s largest companies, rejected Mr. Biden’s tax hike proposals. They questioned the lack of business representation in the cabinet. They were outraged by what they called over-regulation by federal agencies.

While the meeting was not hostile, it was a sign of three and a half years of senior leadership complaining about Mr. Biden. Business leaders have criticized his comments about “corporate greed” and his appearance at a union demonstration. They resent the actions of officials he appointed – particularly Federal Trade Commission head Lina Khan, who has tried to block a series of corporate mergers.

A number of prominent figures in Silicon Valley and Wall Street – including venture capitalists David Sacks and Marc Andreessen and hedge fund magnate Kenneth Griffin – voiced increasingly loud criticism of Mr Biden and praised former President Donald J. Trump or both.

Still, this shift largely reflects movements among leaders who already supported Republican politicians but had not previously spoken out in favor of Trump. There is little sign that leadership loyalty has changed from Mr. Biden to Mr. Trump.

Jeffrey Sonnenfeld, a professor at the Yale School of Management who is in frequent contact with business leaders, said most of the business leaders he spoke with preferred Mr. Biden to Mr. Trump, “some of them enthusiastic, some of them biting.” Lip and kept her voice. “Nose.”

Executives who have donated to Democrats in the past generally continue to do so: Documents released by the Federal Election Commission last week showed that business leaders such as former Yahoo CEO Marissa Mayer and Microsoft’s Brad Smith contributed to Mr Donations have been made to Biden President – ​​both recently hosted Biden fundraisers – and from Mark Cuban, the technology investor.

And despite subtle signs of waning enthusiasm among business elites for Mr. Biden, neither the White House nor the Biden campaign appear particularly concerned. They view their tax and regulatory policies as effective and generally popular. And they point to record corporate profits under Mr. Biden’s presidency.

Still, the government has taken steps to improve its relations with business leaders. In February, a team including Mr. Zients and Treasury Secretary Janet L. Yellen compiled a list of more than 100 business leaders to contact, White House officials said. In May, the president met with business leaders, including executives from Marriott, United Airlines and Xerox.

Administration officials say feedback from leaders has led to policy changes, such as when the Environmental Protection Agency softened new requirements to reduce car and truck emissions after hearing from automakers.

“We won’t agree with companies on everything, but we will talk to them,” Wally Adeyemo, the deputy finance minister who frequently meets with business leaders, said in an interview .

The business community’s frustration with Mr. Biden is partly due to style and rhetoric. Mr. Biden has accused companies of “ripping people off” by raising prices and shrinking product portions, and he has reprimanded chief executives over lavish pay packages. He has aligned himself with organized labor more frequently and more explicitly than previous Democratic presidents.

Mr. Biden’s rhetoric has angered even some otherwise sympathetic business leaders. Mr. Sonnenfeld, of Yale, called it “needlessly repulsive” and “self-destructive.” But it could resonate with the public. In polls, Americans regularly blame big business for inflation, and majorities in both parties say they view big business negatively overall.

Beyond the atmosphere, a series of Biden administration actions have weighed on business leaders. Mr. Biden has proposed raising the corporate tax rate from 21 percent to 28 percent (though still below the 35 percent that applied before Mr. Trump’s tax cuts were signed) and eliminating various industry-specific tax breaks. He has also proposed raising taxes on wealthy individuals – a group that includes many executives and their biggest investors. And his government has enacted or proposed stricter rules on environmental protection, worker safety and consumer rights.

Many of these measures are not surprising for a Democratic president — nor are the complaints they are drawing from business leaders. Research published in 2022 found that about 70 percent of top executives at S&P 500 companies identified themselves as Republicans.

But in some areas, the Biden White House and its regulatory appointees have been more aggressive than other recent Democratic administrations.

“I think the regulatory agenda that we’ve seen in some areas of the current administration has been concerning,” said Brad Close, president of the National Federation of Independent Business, a small business advocacy group, echoing concerns privately expressed by many Companies, both large and small.

Individual industries have their own complaints. Airlines are angered by Mr. Biden’s efforts to crack down on “junk fees” and demand refunds for delayed flights. Drug companies have filed lawsuits to block government efforts to negotiate lower drug prices for older adults. Non-union construction companies are angry about rules that require agreements between contractors and unions on major federal projects.

“This is a spear in our hearts,” said Milton Graugnard, executive vice president at Cajun Industries, an industrial construction company in Baton Rouge, La. “It is devastating and damaging to our industry,” added Mr. Graugnard, a past Trump donor, “and I know it will drive up costs.”

Still, other industries have praised the government, particularly for the hundreds of billions of dollars in investments in infrastructure, green energy and domestic manufacturing that resulted from the legislation it helped pass.

“Our relationship with the Biden administration is very productive, particularly around shared policy priorities,” said Kip Eideberg, senior vice president of government relations at the Equipment Manufacturers Association, which represents companies that make construction and agricultural equipment.

Mr. Eideberg criticized the administration on other issues, such as trade policy, where Mr. Biden has maintained tariffs first imposed under Mr. Trump that make imported parts and materials more expensive. But he said the Biden administration has been far more open to consultation than the Obama administration, which he said appears to have “very little interest in working proactively with the business community.”

The Biden administration argues that companies appear to be supporting Mr. Biden in a far more important way: with investments, no matter what various industries say about their policies.

The quarterly increase in investment under Mr. Biden was comparable to the trend under Mr. Trump before the pandemic — although the Federal Reserve raised interest rates by five percentage points during Mr. Biden’s presidency, a move that typically depresses investment.

Some of Mr. Biden’s supporters in the business world cite a more fundamental reason for their support: Mr. Trump’s presidency has been marked by frequent policy shifts and near-constant uncertainty, they say. Many are also concerned about his approach to immigration and trade and the possibility that Mr. Trump could try to undermine the Federal Reserve’s independence.

At the session with Business Roundtable leaders who met with Mr. Trump the same day, Mr. Zients emphasized Mr. Biden’s commitment to stability and the rule of law.

“Many of them – and I work with this every day, work with CEOs of large companies – see this as a choice between predictability and clarity on the one hand and unpredictability and chaos on the other,” said Roger Altman, senior chairman of the investment bank Evercore, who held Treasury Department positions under Presidents Jimmy Carter and Bill Clinton.

Trump campaign communications director Steven Cheung responded: “President Trump continues to be warmly welcomed by the business community and praised for his policy proposals on deregulation and tax cuts.” The stark contrast is a pro-growth economy that has benefited all Americans under President Trump, unlike Joe Biden’s failed record of skyrocketing inflation and business-destroying mandates.”

The business community’s strongest anger at the current administration is often directed at regulators, particularly Gary Gensler, the chairman of the Securities and Exchange Commission, and Ms. Khan of the Federal Trade Commission.

Vinod Khosla, a prominent venture capitalist who hosted Mr. Biden at a Silicon Valley fundraiser last month, condemned Ms. Khan as “not a rational human being” at a conference this month.

But Mr Khosla is not abandoning his support for Mr Biden.

“Lina is not the most important part of the Biden presidency,” he said in an email. “And Trump is far worse than Lina in ten dimensions.”

Keith Rabois, Mr. Khosla’s colleague at Khosla Ventures, sees things differently. Mr. Rabois, a longtime entrepreneur and investor, is a conservative, but he did not support Mr. Trump in 2016 or 2020. Now he is doing so, partly because of Ms. Khan’s approach, but mostly because of what he saw as Mr. Biden’s lackluster support for Israel and Jewish students on college campuses.

The different conclusions of Mr. Khosla and Mr. Rabois – despite their shared criticisms – reflect a larger pattern. Business leaders who have supported Mr. Biden in the past mostly still do so, although some more quietly or with more reservations than before. And some Republican leaders who were once skeptical of Mr. Trump or tacitly supported him are becoming more vocal in their support.

Charles Elson, the founding director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, said that many of those who still favored Mr. Biden had declined in their support — not necessarily because of his policies, but because of an ego the feeling that Mr. Trump could win.

“They just stopped talking,” Mr. Elson said. “That’s all. They realized that it’s too close to call, it’s better not to say anything. You can never be attacked for what you didn’t say.”

Reid J. Epstein contributed reporting.

Source link

2024-06-24 15:49:22