Fortune magazine's perceptive journalist Geoff Colvin has listed five policy changes President-elect Joe Biden will make that will be most significant for C-suite business leaders, whom he argues are going to be positive about most of these changes.
But what about average Americans? That's a nontrivial question, given that Americans' opinions will, at least in part, ultimately percolate up and affect the votes of their elected representatives. Business leaders recognize, or should recognize, that new policies are going to have a much higher probability of becoming law if they match with prevailing public sentiment.
The Biden changes outlined by Colvin involve five policy areas -- taxes, unions, healthcare, infrastructure and government regulation -- and it seems to me that three will be just fine with average Americans. Two will be more problematic. In the weeks to come, I will look at public opinion on these and other policy areas that are going to be a part of the initial Biden agenda in more detail. But here is a brief overview of where the public stands on the five Colvin outlines.
1. "Raise taxes on companies." Biden will almost certainly begin his administration with efforts to pull back many provisions of the 2017 tax cut law, including the one that basically reduced the top corporate tax rate from 35% to 21%. I think this should create little pushback from average Americans. Gallup and Pew Research updates show the 2017 tax law is far from sacrosanct; in fact, more Americans have a retrospectively negative than positive view of the law. Research has also shown that Americans think the law primarily benefited the wealthy and corporations more than average people. Given that less than 20% of Americans have confidence in big business, and a similarly small number give business executives a high honesty and ethics rating, there is going to be little love lost if corporations have to pay more in taxes. Plus, and most importantly, almost seven in 10 Americans say that corporations currently pay too little in taxes.
Biden should have relatively little public opposition to this proposal.
2. "Strengthen labor unions." Biden proposes to "grow a stronger, more inclusive middle class -- the backbone of the American economy -- by strengthening public and private sector unions." There is a lot of room for growth when it comes to union membership, certainly, given that only 7% of Americans are members of labor unions according to Gallup's latest estimate. At the same time, 65% of Americans say they approve of labor unions, tied as the highest reading since 1999.
Approval of unions in concept does not necessarily mean approval of their becoming stronger, however. Gallup research from 2018 shows that well under half of Americans (39%) want labor unions to have more influence than they have today. The rest either say unions' influence should remain the same or that they should have less influence.
Gallup research does show that Americans believe unions help workers who are members, and a 2018 Pew Research survey found that Americans were more likely to say the reduction in union representation since the early 1980s has been mostly bad rather than mostly good for working people. But, at the same time, Gallup polling shows Americans are less positive that unions are helpful to the U.S. economy overall.
My conclusion: There's residual positive sentiment about unions among Americans, but Biden needs to tread carefully in his efforts to strengthen their influence.
3. "Impose new regulations." The idea of ratcheting up regulations on American business represents a public opinion challenge for Biden. As I have discussed in a number of articles in recent years, Americans have a distinct love-hate relationship with their federal government. Americans recognize that government performs many positive functions but are leery of government gaining too much power. Thus, Biden's efforts to clamp down on business with more regulations is not necessarily going to be greeted with universal public approbation.
An important Gallup trend question gives Americans three alternatives relating to government regulation, and 36% say there is too much government regulation of business and industry, 27% say there is too little, and 36% say it is about right. One way to look at this: Over seven in 10 Americans believe there is either too much or the right amount of regulation. This is not a ringing endorsement of increasing regulation of business, even though the "too much" percentage has edged down in Donald Trump's administration concomitant with Trump's cutback in regulations.
Plus, 56% of Americans say the federal government has too much power, also not a welcoming public opinion context for efforts to increase government regulation of business and industry.
At the same time, adding to the complexity, Gallup's September update found a new high of 54% of Americans telling us that government should do more to solve problems rather than leaving that task to individuals and businesses. It is not clear if "doing more" means imposing more regulations on business and industry, but that certainly is one possible interpretation. And, when it comes to specific examples, we found in 2019 that about six in 10 Americans believe the government is doing too little in terms of protecting the environment -- or, in other words, not regulating enough.
All of this highlights the tightrope Biden is going to have to walk when he approaches the idea of using the government to clamp down on business. As I said recently, "The appropriate role of the federal government in our lives was a core issue as the Founders argued over the framework of the nation to be embodied in the Constitution, and it remains a core issue today."
4. "Add a public option to Obamacare." Recent polling by Gallup shows that over half of Americans continue to approve of the Affordable Care Act. Kaiser Family Foundation research finds that 69% of Americans favor "a government-administered health plan that would compete with private health insurance plans and be available to all Americans" -- a higher percentage than favor a "Medicare for All" plan (53%).
So I think Biden is on relatively safe ground with at least the majority of the American public when he pushes the idea of adding a public option to the Affordable Care Act.
Colvin also reminds us that Biden plans to attack the issue of drug prices, allowing Medicare to negotiate with drug makers and, according to Biden, "allowing consumers to buy prescription drugs from other countries." These proposals are anathema to pharmaceutical companies. (As Colvin puts it, "The U.S. healthcare industry -- America's largest industry, accounting for 18% of the entire economy -- generally hates those proposals.")
But protests from the drug companies will not be falling on highly receptive ears. Americans have very low opinions of the pharmaceutical industry (24th out of 25 business and industry sectors measured in our 2020 update, after moving up from dead last in 2019); little love lost there. (Interestingly, pharmacists themselves -- the people who dispense the drugs -- are given high ratings in terms of their honesty and ethics.)
And Kaiser research shows strong public approval for the types of things Biden is proposing, including 88% who favor allowing the government to negotiate with drug companies to get lower prices for Medicare-reimbursed drugs, 78% who favor allowing Americans to buy drugs imported from Canada and 62% who favor lowering what Medicare pays for drugs based on amounts paid in other countries.
5. "Increase infrastructure spending by $2.4 trillion." Colvin says this is "a change business in general would love." Actually, as far as I can tell, this is a change that everyone would love. I have written a number of times over the past years about the public's strong agreement with the idea of spending federal dollars to improve the nation's infrastructure. Most elected officials agree in principle. The problem is that our elected officials cannot seem to figure out a way to get it done. Trump, for example, made infrastructure one of his major focus points in his 2016 campaign. Yet, four years later, nothing major has been accomplished. As I noted in a recent review, "It remains to be seen if a new administration will have more success than the last in actually overcoming partisan bickering and doing something about the issue." But there is little doubt that, as I titled the piece, "Infrastructure Action Should Be a No-Brainer."
