Business pivots to wages after midterms

Business groups are speaking a new language after last week’s elections, talking more explicitly than ever about how their priorities can help the middle class — and their paychecks.

 The business lobby has long sold corporate-friendly policies like tax reform and increased trade opportunities as good for both their own bottom line and for jobs and the country’s economic growth.

 But after voters made clear last week that they feel skipped over by the economic recovery, the corporate community is stressing what its proposals can do to increase middle-class wages, with a message that emphasizes paychecks over grand deficit bargains.

 

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For example, the Alliance for Competitive Taxation (ACT), a coalition of more than three-dozen corporations, played down the U.S.’s high corporate tax rate in a statement last week, concentrating instead on how tax reform “can usher in a new wave of American business investment that will directly benefit the middle-class through increased wages and more opportunities.”

 The National Association of Manufacturers, seeking extensions of tax incentives for business investment, argues that the economy was plodding along below its full potential. “The real story is about jobs, people and communities,” the group said.

 The U.S. Chamber of Commerce pounded a similar theme this week, as it pushed for policies that it believes could give the economy a needed spark.

 “The reality of America’s current and forecasted growth is both a struggling middle class with limited opportunity and job creation and a federal government that continues to record immense annual deficits,” said U.S. Chamber of Commerce Foundation President John McKernan.

 In one sense, it shouldn’t be a surprise that K Street has internalized the lessons from last week’s exit polls. But the shift in tone also underscores that the business community realizes popular support is going to be needed for policies like tax reform to get enacted in a still-divided Washington that is all too aware of another tough election season in 2016.

“Politicians and business leaders really have to change the tone, and make sure they do a good job convincing the average run-of-the-mill voter or employee that they benefit from things like free trade and tax reform,” said Chad Moutray, chief economist at the NAM. “We have really stepped up in a big way, trying to make sure that, certainly leading up to the election, that our members really communicated with their employees.”

The overall U.S. economy has seen steady growth and a falling unemployment rate for most of 2014, and the stock market has surged to record highs. But with wages stagnant, many of those who headed to the polls last week remain sour over the state of the economy, and they slammed President Obama and his party with their votes.

Republicans ready to take control of Congress have emphasized a middle-class message since the election. The business community, hoping to gain traction for long-stalled initiatives like tax reform, is doing the same.

The shift acknowledges a growing gap among the electorate. While wealthier people in the country are enjoying the boost that comes with rising stocks and home prices, less affluent people that rely mainly on wages feel stuck.

“The election results make it very clear that the American people want Congress and the president to focus on improving their economic situation, growing middle-class jobs and wages,” a spokesman for ACT told The Hill. “Tax reform is one of the best tools in the toolbox to do just that.”

The Reforming America’s Taxes Equitably, or RATE, coalition has also started to make more overt references to how tax reform could help the “stagnant wages” hurting U.S. workers. 

Nike, UPS and Wal-Mart are among the corporations in both tax reform coalitions.

 Still, there are lots of q`uestions about whether the business lobby’s recalibrated message can actually help broader issues gain traction.

 Lawmakers and aides already acknowledge that it will be difficult to revamp the tax code in the next Congress. On top of that, Democrats made pocketbook issues like increasing the federal minimum wage the centerpiece of their 2014 campaign. In the end, Democrats had little success convincing voters to back them — or convincing Republicans to support their policy prescriptions.

 Some business lobbyists argue that the message isn’t different, Republicans are just more receptive to their pitch.

“The message hasn’t changed, it’s that the audience has changed a little bit,” said Jack Howard, senior vice president of congressional and public affairs for the Chamber.

Organized labor, which has long pushed for better wages among workers, argues that Republicans and business allies successfully seized on voter discontent over earnings during the midterm campaign — and that Democrats dropped the ball.

“Their strategy was to tap into the discontent people have about wage stagnation, but then turn around and put the blame on Obama and government overreach,” said Mike Podhorzer, political director of the AFL-CIO. “They will masquerade in whatever rhetoric is in vogue at the moment. No matter which way the economy is going, the answer is more tax cuts and less regulation.”

There’s also the question of how much business advocates can stir up support for their priorities outside of the Beltway. Still, one K Street operative who used to work on Capitol Hill said the business lobby was smart to reorient its message toward the middle class, arguing that lawmakers would be more likely to tune out the corporate world if it wasn’t offering solutions for their constituents.

“The question for the business community is, how do you bring your argument home?” the lobbyist said. “You can’t just talk about tax policy as cold facts.”