American workers moving forward.”30 Its control over its investment capital made it the more powerful partner in the deal.
Other companies quickly followed suit, promising investment in exchange for pro-business reforms from government. Corporate tax cuts remained a central demand. In January 2017 the CEO of AT&T vowed to “step up our investment levels” in exchange for a reduced corporate tax rate. AT&T was not holding back on US investments for lack of capital: it was posting over $1 billion a month in profits. It had also received $38.1 billion in special tax breaks from the government since 2008, more than any other company. But it still was not confident enough.31 Even after Congress slashed the top corporate tax rate from 35 percent to 21 percent in December 2017, the fate of the hoarded cash remained far from certain. Corporations did start to repatriate their overseas money, but spent most of it on stock buybacks and dividends rather than productive investments or wage increases for workers. Business investment levels in 2018 were still much weaker than during the second half of the twentieth century.32
The Trump presidency has thus exhibited the same basic patterns as its predecessors. Corporate representatives have been directly involved in making policy, even more blatantly than in the past.33 Quid-pro-quo deals have traded government handouts to corporations for new investment in the economy, asking government to trust that business leaders will follow through. And the negotiating relationship in those deals has remained asymmetrical, with capitalists free to renege on their pledges. Trump’s own billionaire status and unabashedly pro-business rhetoric mark a partial difference from Obama, but he has remained subject to the same basic parameters and constraints.
Capital and the Origins of Progressive Legislation
Major legislation that challenges corporate profits or power might seem to be a different story, initiated despite business wishes rather than because of them. Many observers regard the signature legislative achievements of the Obama presidency as a reflection of Obama’s electoral mandate and, by extension, the tide of public opinion. And, indeed, insofar as they sought to protect the public from business, the ACA, Dodd-Frank, and climate reform all coincided with majority opinion. However, while Obama’s 2008 election victory and strong public backing played some role, it’s unlikely that any of these bills would have been introduced without at least some support among business leaders.
Healthcare Reform: Setting the Table, Limiting the Menu
The healthcare reform process began in that way. In human terms, the existing system was a catastrophe: 47 million people lacked health insurance and 45,000 died each year as a result. Per-capita healthcare costs were about twice as high as in other industrialized countries yet health outcomes were much worse. A large majority of the public thought the government should ensure universal coverage.34 However, the key impetus for national reform was not mortality rates or public opinion, but business costs. Top corporate leaders outside the healthcare sector had long sought a way to contain the cost of healthcare provision and insurance. They had tried various ways of offloading the rising costs onto their workers: capping benefits, hiring part-timers and subcontractors, or simply slashing coverage.35 But these strategies were insufficient. In the 2000s, health costs galloped far ahead of the overall inflation rate, meaning higher and higher costs for employers. Between 2000 and 2007, employer spending on healthcare rose 87 percent, leading the majority of executives in the Business Roundtable to cite healthcare costs as “the biggest economic challenge they face.”36
As a result, long before the Obama election or even the Democratic victories in the 2006 midterms, the business press was already noting “an ever-louder complaint from U.S. businesses that they can’t compete in a global economy when companies from other countries don’t have to pay for health care,” leading to “the business community’s heightened interest in sweeping change” at the level of government policy.37 Several prominent business-led coalitions centered on health reform were either formed or stepped up their work. The National Business Coalition on Health (NBCH) and the business-dominated National Coalition on Health Care (NCHC) became more visible.38 The business press from the mid-2000s was full of corporate complaints about health costs. Figure 1 shows the number of articles mentioning “health care” in three of the top business magazines in the years 1995 through 2008. The annual average rose from 58 articles in 1995–1999, to 102 in 2000–2004, to 123 in 2005–2008. As with the 2009 stimulus, many business voices called for more aggressive action than what policymakers were proposing. “We don’t see anything in the national debate now that’s big enough or ambitious enough to address the problem,” said the NCHC president in 2004.39
Figure 1 Articles mentioning healthcare, 1995–2008
Source: Based on Business Source Complete database searches for “health care,” excluding duplicates and corrections.
By the mid-2000s the mounting concern over healthcare costs had become a steady complaint among manufacturing and commercial corporations. With increasing frequency, companies threatened to drop workers’ coverage or move jobs to other labor markets. The number of US businesses offering health insurance to their workers was already declining, from 69 percent in 2000 to 60 percent in 2007. Initial government responses came primarily at the state level, with roughly a dozen state legislatures debating major reforms around this time. Business confidence was the major justification. Pennsylvania governor Ed Rendell, for instance, argued for reform by stressing the costs indirectly imposed on business by the large number of uninsured people in the state: “It is a tremendous deterrent for businesses that are considering locating in Pennsylvania to know that in addition to paying for their own employees’ health coverage, they will be subsidizing the costs of the uninsured,” whom emergency rooms could not legally turn away.40
By George W. Bush’s second term, these threats had developed into formal demands for government action. Deere & Company CEO Robert Lane conveyed the demand when he warned Congress that rising costs could lead to the “limiting of covered services, loss of employer-provided health care … and even a loss of American jobs, both in the manufacturing and service sectors.” Bush’s January 2006 State of the Union address emphasized healthcare, which, as the Wall Street Journal noted, was “rare for a Republican.” The reason was not public opinion but business opinion. Providers were being pushed to find “more efficient ways of delivering services,” not by consumers but by other business sectors: the providers were “under pressure from health-insurance providers, who are themselves under pressure from large corporations.”41
The presidential campaigning of 2007–08 led to increased talk of reform in Washington, but not merely to appeal to voters. In early 2008, Senate Finance Committee chair Max Baucus, whose staff would play the central role in crafting what became the ACA, committed to advancing a healthcare reform in 2009 regardless of the election’s outcome. At that moment, he rehired former staffer Liz Fowler, fresh from a stint at the nation’s top health insurer, who would write much of the bill herself. In June he and other members of Congress hosted a healthcare summit featuring top business executives.42
The industrial and commercial corporations with the largest and most expensive health plans were the foremost proponents of reform. But many health industry sectors also had grievances with the status quo. Health insurers in California, for