Corporate America will spend millions to keep McConnell in charge of the Senate
The U.S. Chamber of Commerce, the nation's largest corporate lobbying group, will spend $2 million on a TV ad supporting Senators David Perdue (R-GA) and Kelly Loeffler (R-GA). Perdue and Loeffler both face run-off elections on January 5. If either wins, Republicans will maintain control of the Senate.
The ad avoids expressly advocating their reelection. Instead, it urges voters to "thank" Perdue and Loeffler for "fighting" for pandemic relief for small businesses. This technical distinction allows the ads to be paid for through one of the Chamber's non-profit vehicles.
Most major American corporations are members of the Chamber and pay dues. That means they are financing ads with the goal of keeping Republicans in charge of the Senate. But spending money to keep Republicans in charge, however, conflicts with the stated values of many major corporations.
For example, Amazon's official position is that "[h]uman-induced climate change is real, serious, and action is needed from the public and private sectors." Biden has an ambitious agenda to reduce carbon emissions — a goal that Amazon says it enthusiastically supports. But if Republicans maintain their control of the Senate, it is hard to imagine there will be any serious legislative action to combat climate change for the next two years.
Yes, Amazon is investing "$2 billion to support the development of technologies and services that reduce carbon emissions." But tackling climate change requires collective action that Majority Leader Mitch McConnell (R-KY) and most other Republicans oppose. If Amazon is really committed to climate action, why isn't it putting its considerable resources behind Democratic challengers Jon Ossoff and Raphael Warnock instead of supporting the Republican incumbents through the Chamber?
The disconnect between stated corporate values and political action facilitated by the Chamber is not limited to Amazon. Nike, for example, says that in "the race against climate change, there isn’t a moment to lose" because "climate change is already affecting the athletes we serve and poses challenges to the future of sport." But Nike, through its membership in the Chamber, is helping finance ads that make aggressive climate action in the United States less likely over the next two years.
Nike resigned its seat on the Chamber’s board of directors in 2009 over a dispute about climate change. It objected to the Chamber challenging an Obama-era EPA regulation. But the company said it would “continue our membership” because “[we] believe that we can better influence policy by being part of the conversation.” More than a decade later, the Chamber is continuing to take action to undermine climate action.
Similarly, Capital One says it "accepts the scientific consensus that climate change is real and that the environmental and societal impacts of these changes will be severe if these trends continue." The company says "collectively, we must decarbonize the economy and remove CO2 from the atmosphere." Rapid decarbonization in the United States will not happen if McConnell remains in charge of the Senate. But Capital One is helping make that happen through its membership in the Chamber.
Are Loeffler and Perdue champions for pandemic relief for small businesses?
The Chamber's ad claims that "in the midst of the pandemic, Perdue and Loeffler fought to secure billions in relief for small businesses." Both Perdue and Loeffler did support the CARES Act, which included money for small businesses. But that legislation passed 96-0.
After that, Perdue was skeptical of additional pandemic relief, including additional money to support small businesses, citing concern about the deficit. The Hill reported on Perdue's unease with spending more money in July:
A group of Senate Republicans are raising red flags over the rapid expansion of the Federal Reserve’s balance sheet…
Perdue, the former CEO of Reebok and Dollar General, said he’s raised his concerns with Treasury Secretary Steven Mnuchin and National Economic Director Larry Kudlow.
“We’ve gone from $23 [trillion] to $26 trillion in debt,” he said. “I’m really worried about the potential impact here of another $1 trillion or whatever we end up with.”
Loeffler also opposed additional pandemic relief proposed by Democrats because it included money for state and local governments, which Loeffler derided as "blue state bailouts." Loeffler maintained that position even though Georgia House Speaker David Ralston (R) urged her to support hundreds of millions in state and local funding. Ralston said that, without the additional aid, there could be mass furloughs of government workers and cuts to K-12 education.
If Loeffler or Perdue is victorious, no additional relief will move forward without the consent of McConnell. And for months, McConnell has delayed consideration of relief or argued that Democratic proposals were too large.
The Chamber's true motivations
Despite the claims in its TV ad, it seems unlikely that the Chamber is supporting Perdue and Loeffler because it supports relief for small businesses. The election of either Perdue or Loeffler would make additional relief for small businesses less likely.
Rather, after endorsing a handful of moderate Democrats in the 2020 election the Chamber is under pressure from Republican leaders. House Minority Leader Kevin McCarthy (R-CA) said in September he didn't want the Chamber's endorsement because the organization "sold out."
I don’t want the U.S. Chamber’s endorsement because they have sold out...It is hypocrisy that the U.S. Chamber of Commerce would endorse the Democrats that are part of this socialist agenda that is driving this country out, and it's fighting this president,” the leader said. “Remember, these are the people that are voting for impeachment. When this president has done so much for this nation ... built us the strongest economy ever.”
So providing an influx of cash in support of Loeffler and Perdue is a way for the Chamber to reestablish its Republican bonafides.
But perhaps more importantly, a Republican-controlled Senate would lock in the current corporate tax policy. Biden has proposed increasing the corporate tax rate from 21% to 28% and imposing "a minimum tax to ensure no U.S. corporation can avoid paying income taxes." This would still be substantially lower than the 35% corporate tax rate when Trump took office. But the U.S. Chamber — and its corporate members — don't want any increase.