OFF TO THE RACES

Business Endures a Love-Hate Relationship With Trump

Executives recoil at his impulsive decisions and threats of trade sanctions, but they welcome the way he’s rolling back federal regulations.

President Trump and Chinese President Xi Jinping walk together at Mar-a-Lago in Palm Beach, Fla., on April 7.
AP Photo/Alex Brandon
Charlie Cook
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Charlie Cook
Oct. 16, 2017, 8 p.m.

Talking with the head lobbyist of a large corporation the other day, it occurred to me how ambivalent big business feels toward President Trump and his administration.

For many in the corporate world, free trade is virtually a religion. They view as little less than heresy Trump’s decision to drop out of the Trans-Pacific Partnership; to renegotiate, if not abandon, the North American Free Trade Agreement; and to threaten trade sanctions against China and other countries. These are the kinds of things they would fear from a liberal Democratic president, not from a president from the historically pro-business and pro-trade GOP.

They worry that much of the administration’s bluster and tough talk could lead to trade wars, or at least trade skirmishes. In the last month, the Commerce Department announced an 80 percent tariff on top of a 219 percent tariff announced in previous weeks on aircraft made by Canada’s Bombardier, charging unfair government subsidies. There are fears that Britain and Canada may reciprocate by putting tariffs on U.S.-made goods.

While corporate America was not necessarily at the vanguard of the climate-change movement, a broad swath of big companies, including oil companies, opposed dropping out of the Paris Climate Accord. Similarly, while many companies were not enthusiastic about the Affordable Care Act, they have spent substantial amounts of money coming into compliance with it.

Now they’re deeply concerned about the possible collapse of the health insurance market as a result of the president’s decision to end cost-sharing-reduction subsidies to insurers to help pay premiums for low-income policyholders, as well as an executive order opening the door for cut-rate health insurance policies that virtually invite young, healthy people to drop out of Obamacare health exchanges. A fundamental precept of insurance is the creation of a pool to spread risk. In this case, the premiums of healthy, generally younger people are used to offset the cost of people who have health problems. Siphoning off the premiums of healthy people drives up the costs of premiums for people who have health problems and need insurance.

Other corporate leaders worry about the president’s foreign policy moves and lack of a clear ideological framework. Business leaders want stability and predictability that allow them to make product decisions and investments for the future. Policy changes that come out of the blue, especially dramatic ones, wreak havoc on their planning. Trump’s policy shifts often seem random or impulsive.

But as troubled as many corporate executives are about the administration’s haphazard course, many welcome relief from what they saw as President Obama’s onerous federal regulation and overly aggressive and unreasonable enforcement of rules already on the books. According to Douglas Holtz-Eakin, who served as a senior staff economist at the Council of Economic Advisers under President George H.W. Bush and later director of the Congressional Budget Office, the cost of government regulation over the last four years of George W. Bush’s presidency averaged $41 billion a year, compared to $109 billion a year during Obama’s administration.

A report last week by CNN showed that through Oct. 13, Trump had issued 49 executive orders, a pace that exceeded every president from Richard Nixon until Obama. Many of those orders effectively reversed Obama-era policies. An Aug. 29 study by the Pew Research Center found that Congress, by Labor Day, had passed 55 measures that had been signed into law—46 of them “substantive,” not merely ceremonial. This total tied the 110th Congress (2007-2009) for the most laws signed by a first-year president in 16 years. According to the Pew study, 14 of those 46 had the sole purpose of overturning various rules adopted by the Obama administration.

For business lobbyists, this means shifting attention somewhat away from Congress to various Cabinet departments and agencies that can provide regulatory relief or more lenient enforcement. Many lobbyists privately report considerable success and predict even greater headway in coming years.

The chaos that often surrounds the Trump administration is something that business leaders find dispiriting. The Obama administration was often hostile to or even unsympathetic to business, but despite their disagreements, corporate leaders appreciated the competent way the Democrats handled matters that affected the business community. One Washington corporate office head said that the Obama people would at least listen carefully and politely to corporate views, even if they more often than not came to opposite conclusions.

The bottom line is that the relationship between Trump and his administration and the corporate world is complicated, and not likely to get any simpler.

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