Home News Shell endorsement of Democratic bill exposes growing GOP-big business rift

Shell endorsement of Democratic bill exposes growing GOP-big business rift

by Atlanta Business Journal

Republican congressional leadership is fuming over a recent move by BP and Shell to endorse Democrats’ healthcare and clean energy legislation — just the latest strain in relations between big business and the GOP.

Republicans are in full-throated opposition to the legislation brokered by Senate Majority Leader Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV), dubbed the Inflation Reduction Act. The bill would raise taxes on businesses by implementing a 15% tax on the adjusted financial statement income of big corporations and by imposing an excise tax on stock buybacks.

Still, despite the tax hikes, several companies, including oil giants BP and Shell, signed on to a letter advocating the proposal. Republicans, traditionally the strongest allies of big business and the corporate world, are upset because they see the companies as working against pro-commerce policy to curry favor with Democrats and win subsidies.

“As some CEO’s rush to support tax hikes & government price setting in Manchin-Schumer, House Republicans are asking: Why defend a pro-growth business climate that businesses & associations themselves won’t defend — or will eagerly sacrifice for a favorite tax subsidy?” Rep. Kevin Brady (R-TX) wondered in a statement to the Washington Examiner, which is based on a tweet he posted last week.

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Brady chairs the powerful Ways and Means Committee and was instrumental in passing the Republican tax cuts back in 2017. His thoughts echo those of Republican leadership, according to a senior GOP leadership aide familiar with the party’s thinking.

“More than ever, I deeply respect CEO’s with the strength & vision who understand when Big Government, Big Labor & Big Business are politically indistinguishable, America suffers. Their leadership and moral authority is needed to speak for limited government, earned success, free enterprise,” Brady added.

The senior aide told the Washington Examiner that leadership recognizes there are certain “bad actors” in the corporate world that are advocating the legislation despite policies within it that run in direct contradiction to their sector’s interest. They are doing so in the hope of appeasing and “virtue-signaling” to Democratic lawmakers and maybe getting a subsidy here or there, the aide said.

Shell and BP were part of a group of more than three dozen companies, including other giants such as Lyft and Ford Motor Company, that signed a letter calling on Congress “to quickly pass the Inflation Reduction Act to deliver the investments and incentives Americans need today and to power the economy of tomorrow.”

“It is past time to invest in our country’s shift to a clean energy economy and to confront the threat of climate change,” they said in a statement. “The investments in the [bill] would reduce climate-related risks across the economy while combating inflation, reducing costs for families, and improving energy security. While these investments must be paid for, the economic benefits outweigh the costs.”

The senior aide said BP and Shell took the position on the legislation despite it being deleterious for corporate America and job creation.

The Washington Examiner contacted both BP and Shell for comment, and both pointed to statements in support of the bill. A spokesman at Shell declined to comment about the political dynamics between the company’s endorsement of the legislation and GOP leadership.

“As for the IRA, Shell is encouraged by the actions of lawmakers to pass legislation that would help diversify lower-carbon energy supply and secure domestic energy production,” the spokesman said in an email. “Transforming the energy system relies on collaboration that includes sound and effective policy, and we will continue working closely with policymakers to help accelerate the energy transition.”

The legislation is but the latest example of tension between the GOP and some aspects of the corporate world. Among other grievances, the party has clashed with businesses over corporate social liberalism and the embrace of environmental, social, and governance, or ESG, goals.

“Sadly, just like the Democratic Party, the majority of corporate and Wall Street executives care more about wokeness than they care about their workers,” said Rep. Jim Banks (R-IN), chairman of the conservative Republican Study Caucus. “If ESG-obsessed corporate leaders are more interested in promoting a radical social agenda than pro-growth, pro-worker policies, don’t come asking Republicans for help in 2023.”

Most of the acrimony from GOP leadership has been directed at the nation’s largest business group, the U.S. Chamber of Commerce.

The tiff began when the chamber endorsed several Democratic House candidates in the 2020 election. Those who ended up becoming lawmakers all voted for President Joe Biden’s now-defunct Build Back Better legislation, which is an amped-up version of the reconciliation legislation being considered now — despite chamber opposition.

Given that more than a dozen of the chamber-endorsed candidates won election in 2020 and Democrats wrested control of the House by a smaller margin than that, Republicans were enraged by what they saw as the chamber’s betrayal of the party and pro-business policies.

House Minority Leader Kevin McCarthy (CA), who is likely to become speaker should Republicans take the House in the midterm elections, has been dismissive of the chamber since its slate of Democratic endorsements.

“I didn’t even know the chamber was around anymore,” he quipped to Punchbowl News last October.

McCarthy has vowed not to allow the chamber to wield the same measure of influence among Republicans it has enjoyed in the past.

The senior aide insisted to the Washington Examiner that those comments are not hollow threats.

The aide said the situation has left the chamber with few allies given that the group is no longer in the good graces of GOP leadership in the House and is not tight with the Democratic Party because the latter opposes many of the chamber’s positions on taxes and other priorities.

“The contrast is clear. House Republicans stand with the American people against Democrats’ half-trillion-dollar tax-and-spend bill,” Mark Bednar, McCarthy’s spokesman, told the Washington Examiner. “Meanwhile, the Chamber of Commerce, who says it does not support the bill, supports the Democrats who provide the votes to pass it, and the president of its Global Energy Institute supports the bill’s energy mandates and taxes.”

The reference was to Marty Durbin, president of the chamber’s Global Energy Institute. Durbin highlighted the differences between the current legislation and Build Back Better to Politico.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

“This looks a lot different than what we saw in the original Build Back Better bill,” Durbin said. “What ended up being included was very close to policies that have had very strong bipartisan support in Congress.”

The Washington Examiner contacted the chamber for comment ahead of this story but did not receive a response.

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