U.S. business leaders urged Congress on Thursday to reduce its reliance on federal agencies to set regulations.
A slew of major laws in the past decade that relied heavily on the executive branch to implement the bulk of their provisions have led to enforcement practices that vary depending on the political party in power. The Department of Health and Human Services, for example, has immense authority over the execution of Obamacare, a reality that critics say the Trump administration has capitalized on to undermine former President Barack Obama’s signature domestic achievement.
The recent GOP-led tax law, meanwhile, put the onus on the Treasury Department to write guidance and regulations, some of which have yet to be finalized just months before the deadline for filing taxes.
“We made regulators legislators,” AT&T CEO Randall Stephenson said at a forum organized by Business Roundtable, a group representing the 200 largest American businesses. “Depending on who’s in office at a particular moment of time,” he added, “the rules just swing back and forth like a pendulum.”
Stephenson and other panelists also tackled opposition to the tax law from Democrats — who say that the bulk of the benefits went to the wealthy — and argued the advantages will be realized over the next several years.
“The real benefit is the cumulative retention of capital reinvested in innovations which create growth,” said Jamie Dimon, chief executive officer of JPMorgan Chase and chairman of the Business Roundtable. “The notion that you would see all the benefit in one year, it was never meant to be.”
Many companies used the savings from lowering the top corporate tax rate, which the law permanently reduced from 35 percent to 21 percent, to buy back stock rather than invest in new plants and equipment as some lawmakers hoped.
Still, the money sent back to investors “is a redeployment of capital to a better and higher use,” Dimon said. “We have to educate the American public, particularly my Democrat friends, about how that’s beneficial for all America.”
Democrats have vowed to overturn parts of the law, which widens the federal deficit considerably, and use savings to help fund initiatives like building and improving federal highways and bridges when they take back control of the House of Representatives next year.
The chance of achieving that goal, however, is slim with Republicans still in control of the Senate and the White House.
The threat could nonetheless complicate plans already in motion by businesses to take advantage of the immediate deduction for qualifying capital spending that the law allows. AT&T, for example, is preparing to spend $24 billion next year on investments into its business, up from $23 billion in 2018.
“When you take less of the profitability of companies and allow them to reinvest it, they invest it,” Stephenson said. “Tax reform is one of the most powerful catalysts we could have seen for increased capital investment.”
