Chamber of Commerce urges Congress to fight California’s regulatory push
The leader of the U.S. Chamber of Commerce said the powerful business group will fight to reverse worker-classification, privacy and other policies being pushed in California and by some Democratic candidates for president.
“We will lead the opposition to policies that undermine the job creators, that penalize the innovators and that target the wealth-creators,” Chief Executive Tom Donohue said Thursday in his annual State of American Business speech.
While he said his group, one of the highest-spending lobbying bodies in Washington and a major advocate for pro-business policies, will not engage “directly in presidential politics” and could fault both parties, he criticized progressive ideas such as “Medicare for All,” redistributive taxation, corporate breakups and policies that would give part-time workers greater benefits from their employers.
For California businesses, 2020 will be a year of reckoning. Sweeping new laws curbing long-time employment practices take effect, aimed at reducing economic inequality and giving workers more power in their jobs.
“The business community must not, and will not, stand on the sidelines,” Donohue said. He didn’t name any candidates, but some policies he cited, such as Medicare for All, are favored by Democratic presidential candidates Bernie Sanders and Elizabeth Warren.
Donohue, who has led the chamber for 22 years, criticized plans that he described as “the federalization of American business and hospitals,” as well as “major redistributions of wealth to pay for programs that would put the government in charge of many more aspects of our life.” He said that anyone — Republican or Democrat — seeking to break up big companies should focus on increasing competition rather than adding “more government intervention.”
He repeatedly took aim at laws adopted in California. Donohue slammed a statute that could force a wide swath of industry — including technology companies, trucking firms and service outfits — to reclassify workers as employees rather than contractors, and thus guarantee employment protections such as a minimum wage and overtime.
“The business model that has revolutionized an entire section of the economy will be seriously challenged and could screech to a halt,” Donohue said. “The same is true for the innovations that we are seeing from home-repair tasks to the grocery-delivery business.”
The labor law dictates that workers can generally only be considered contractors if they perform work outside the usual scope of a company’s business. He said the chamber will be engaging in a “hell of a fight” over the California measure. “The chamber will bring the full weight of our resources and federation of state and local chambers to reform or defeat these proposals,” he said.
He also urged Congress to end legislative gridlock and take on issues such as the worker-classification law, as well as privacy, where California and other states have already adopted laws opposed by business.
“Washington’s inability to make progress on data privacy is resulting in a patchwork of state rules and regulations that will stifle the free flow of goods and services across state borders,” Donohue said. “Can you imagine running a company when you have 50 different state sets of standards to comply with?”
A new law that will let you opt out of the online data economy goes into effect on Jan. 1 — assuming businesses can figure out how to make that happen in time.
Like an array of business groups, the chamber has pushed Congress to pass a privacy law overruling state laws in order to smooth compliance and extend protections across the United States. Many consumer groups worry, though, any law that gets bipartisan support in Washington would fail to provide the robust protections available in individual states.
California’s new privacy law took effect Jan. 1. Lawmakers on key congressional committees released a number of proposals for privacy legislation at the end of 2019, which revealed divisions between Democrats and Republicans over the role of state laws.
In his speech, Donohue also rejected the conventional Washington wisdom that Congress rarely passes major legislation in election years, saying it was urgent that gridlock not take hold.
The address comes at a moment of transition for the chamber. Long associated with Republicans and a reliable source of campaign funds for conservative politicians, the group in recent years has expressed frustration with partisan gridlock that stalled its ambitions on issues such as infrastructure. It has also objected to the trade-skeptic mood that has taken hold in the capital and in the administration of President Trump.
Donohue, 81, who announced last year that his group would evaluate lawmakers’ bipartisanship while still emphasizing a pro-business agenda, is planning to step down after 2022. He took over the organization in 1997.
In addition to regulatory issues, Donohue said trade is a key focus. The group worked for months to secure congressional passage of Trump’s revamped North American Free Trade Agreement, known as the U.S.-Mexico-Canada Agreement. The chamber, which steered a coalition backing the deal, said in December that it had held more than 1,000 meetings with lawmakers and congressional staff.
The agreement passed the House in December after Democrats negotiated to strengthen labor, environment, drug patent and enforcement provisions. A Senate vote may not come before next week.
Trump has said he will sign the first phase of a trade deal with China on Jan. 15. In that agreement, China would increase purchases of farm goods in exchange for lower tariffs on some products. Donohue said he is looking ahead to a second-phase deal between Washington and Beijing.
“There’s still a long way to go,” he said.
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