It must be obvious to all but the most obtuse among us that we live in a corporate state. The evidence, if more were actually needed, is scattered throughout the 2,000 pages of the tentative Build Back Better Act, which is larded with gifts, large and small, to the corporate establishment. What corporations and their owners want, it’s clear, they get. And what they don’t want, conversely, never sees the light of day.
Big business wanted continued access to public largesse earmarked for various corporate sectors; this they got and then some. Healthcare, for example, is now a major profit center for the insurance industry, partly as a result of the Affordable Care Act (ACA) and its private marketplaces. Build Back Better does not include an ACA public option as originally proposed, which would have threatened corporate profits, but it does include a $130 billion outlay to subsidize the payment of healthcare premiums for nine million ACA users (or customers) — money that ultimately goes into corporate coffers.
Or, consider subsidies to the fossil-fuel industry in the form of tax breaks for the oil and natural-gas companies that were supposedly slated for repeal under Build Back Better, but are alive and well at this writing. These corporate gifts that keep on giving include deductions for the cost of drilling new wells, for using as-yet-uneconomic drilling processes, and for keeping money-losing marginal wells up and running. Altogether, these subsidies will amount to $35 billion over 10 years, according to government estimates.
Then, there are the new programs and spending enhancements detrimental to corporate interests that were stripped from the reconciliation package. One is paid family leave, a missing piece of America’s social safety net. Paid leave doesn’t threaten the welfare of any one corporate interest; instead, it threatens corporate America as a whole, the reason being the inclusion of the word ”paid” in the proposal.
Our existing national family-leave law (the Family and Medical Leave Act of 1993), a typical Clinton-era reform granting workers 12 weeks without pay, is no threat to company bottom lines. The Build Back Better proposal, however, would have been funded by a payroll tax or some other corporate levy and therefore had to go. It was first reduced by two-thirds in the just-enacted House version of the bill to a four-week program and, if latest reports are accurate, is likely to be completely scuttled in the final Senate version.
Also a threat to corporate America at large was, of course, potential repeal of the Trump tax cuts, mainly the corporate-income tax that was reduced in 2017 from 35% to 21% and, in the case of income repatriated from overseas tax havens, to 10.5%. In order to help finance new spending, Build Back Better would have raised it part way back — a levy of 26.5% was the last figure bandied about — but even that number (less than the extremely modest Biden proposal of 28%) was judged too much. At corporate favorite Kyrsten Sinema’s insistence, consideration of an increase was entirely dropped, and a 15% corporate minimum tax (along with a tiny 1% tax on corporate stock buybacks) was substituted to ensure untaxed corporations paid at least something after write-offs.
This leaves us with three egregious instances of deletions from the law benefiting specific business sectors, beginning with the energy industry. In lieu of a rejected “cap and trade” plan to reduce fossil-fuel emissions of greenhouse gases, Build Back Better was supposed to include a Clean Energy Performance Program to reward power companies increasing their use of renewables by a firm 4% per year — or penalize those falling short. Instead, bending to corporate power, Democrats fell back on a time-honored nonsolution: tax credits. Using tax credits to encourage (but not require) good behavior will leave it to the power companies to shift at their own discretion to clean energy.
The next example concerns the practice of dentistry, no longer a hang-out-your-shingle profession, but increasingly a full-fledged corporate interest alarmed by Bernie Sanders’ plan to add Medicare dental, hearing and vision services to the reconciliation legislation. Corporate dentistry, typified by so-called dental-support organizations like Aspen Dental (830 practices in 42 states), fears the price competition of a Medicare dental benefit because Medicare reimbursements would undercut market rates.
Led by their lobby, the 161,000-member American Dental Association, the dental chains have succeeded in protecting their profits by removing any Medicare dental benefit from the Build Back Better plan. Needless to say, the health-insurance companies, whose Medicare Advantage plans sometimes offer dental coverage, are pleased as well.
Remaining is perhaps the single worst illustration of narrowly focused corporate influence over the shape of the pending social-infrastructure legislation: the virtual elimination of mandatory drug-price negotiations between the Medicare program and the pharmaceutical industry, something supported by 85% of seniors, according to the Alliance for Retired Americans. I say virtual elimination because a pending compromise between congressional conferees does allow for some minimal price negotiations.
The scaled-back drug “reform” finally allowed into the bill empowers the Department of Health and Human Services to identify 100 of the most expensive drugs and select 10 for negotiated price reductions by 2025. More drugs may be gradually added to the negotiable list in ensuing years. The catch? Only older, less scientifically advanced drugs no longer under monopolistic patent protection (that is, more than nine to 13 years on the market), or those identified as the unique remedy for a specific health problem, are eligible. Furthermore, negotiated prices will be permitted to drop only very slowly over several years’ time.
The foregoing examples of corporate sway over the final Build Back Better product didn’t come about by accident; they’re the result of intense corporate lobbying and copious amounts of corporate cash. Investigations by the watchdog group Open Secrets indicate that 4,000 paid business lobbyists have been busily working on aspects of Build Back Better over recent months, 1,500 of them representing the drug industry alone; that’s three for every member of Congress.
Here are the unsettling money figures, also courtesy of Open Secrets: Ten major industries have spent $700 million on lobbying in 2021, including $15 million by drug companies to stop Medicare price negotiations. That doesn’t include campaign donations. In the unkindest cut of all (if you’re progressive), 60% of Big Pharma’s 2021 political funding, or $106 million, has gone to cooperative Democrats. Corporate America has become, in a word, bipartisan.
Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.
From The Progressive Populist, December 15, 2021
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