Tanzina Vega: The official transition to President-elect Biden's government is finally underway. Last night, Emily Murphy, the administrator of the General Services Administration formally acknowledged President-elect Biden as the winner of the election clearing the way for the long held up transition process between the Trump and Biden administrations. President Trump, however, has not publicly conceded the election. Corporate America might be patting itself on the back right now after more than 160 business leaders on both sides of the political divide signed a letter to the president urging him to begin the transition.
Among the signatories were David M. Solomon, the chief executive of Goldman Sachs, and heads of MasterCard, MetLife, Condé Nast, and the Partnership for New York City, a coalition of hundreds of top corporate and investment leaders. Kathryn Wylde is the President and CEO of the Partnership for New York City and one of the signatories, and she joins us now. Kathryn, welcome to The Takeaway.
Kathryn Wylde: Thank you, Tanzina.
Tanzina: Why did you decide to sign this letter to the president to pressure a transition of power.
Kathryn: We were asked by the State Attorney General, Tish James, to join a call Friday night to talk about the implications for our democracy, and equally important for our fight against the COVID, which has become the biggest crisis our country has ever faced, both in health terms and economic terms. Tish James, the Attorney General, asked us to step up. She said that the attorney generals from around the country had been talking and saying the New York business community has a lot of influence with political figures both at the state and federal level. They come here to raise money on a regular basis for their campaigns, and so they were thinking of who could- that it would be important for business to speak out and say that this is a threat to our democracy and a threat to our country's recovery from the COVID. That's the background.
We met Friday night, and in 24 hours, we had top executives from major employers and leading investment firms on a letter just asking for what happened last night, which is that the GSA went forward in terms of authorizing the transition and ascertaining that the President and Vice President-elect were Biden and Harris.
Tanzina: Now, the Attorney General for New York, Letitia James has had her eyes on the Trump administration and is pursuing different investigations into the Trump family and others. The tone of this conversation that you all had included business leaders from all sides of the political divide, including some who supported President Trump. Would you say that the tone was- were you surprised by that? Was the tone of the leaders generally amicable?
Kathryn: No, we keep an open relationship. The relationships between business and the political world, in New York City, are practical and are-- We're basically all interested in the future of the city and the country. We maintain very good working relationships with all our elected officials, including our attorney general, and we may disagree on some issues, but we are united on this one. We think it's time to pull the country together, drop the political scene, and focus on recovery from the COVID.
Tanzina: President Trump said one of his promises when he took office was that he would be big, good for business. Would you agree with that so far? Now, if as we assess his first and only term in office, would you agree that this presidency has helped businesses?
Kathryn: I think that, yes, the 2017 Tax Reform Act certainly was very positive, reduced the corporate tax and helped business. Although, at the same time, the elimination of state and local deductibility hurt the 11 states that represent 53% of our national economy. They are states like New York, which have large budgets to support our public transit system, to support our large population of low-income people. Those states that contribute most of the economy also assume most of the country's burdens, so that hurt New York. There has been-- They also, in terms of the policies on immigration, have heard us in terms of being able to continue to attract global talent to this country on.
The immigration policies have created much agony in the communities of- particularly the undocumented communities. Those are places where in New York, the business community is very supportive of the immigrant community wants a path to citizenship. There have been pluses and minuses. Overall, the economy has seemed to do well, but we are a nation divided at this point, among other things over who is president, and that's not good. It doesn't allow us to tackle and put all our united energies at tackling this disease that is killing several hundred thousand people.
Tanzina: The Obama administration made efforts to really focus on private-public partnerships in terms of getting the work of the federal administration done. What do the leaders that you've spoken to, particularly the signatories to this letter, expect from a Biden administration?
Kathryn: There's been great disappointment with the division between Republicans and Democrats in Washington, that they were not able, for example, to get one of the big programs that had been promised, investing in America's infrastructure, $1 trillion.
That's one thing they expect and hope will happen, and using public-private partnerships to leverage private financing at a time when the government is devoting so many resources toward the COVID impact, this is a moment for the private sector to step up. We are talking about that effort in New York State. We certainly want to see that effort at a national level. It's all across this country, we've fallen behind in terms of upgrading our transportation, our water systems, our renewable energy investments, our infrastructure in the broadband area, we're slow in all those areas. This is a moment when we ought to be focusing there.
Again, if we can get the partisan divisions put behind us and just focus on what America needs right now, we think that that's the way forward, and our business leaders. I think by signing this letter on what amounts to a very controversial topic, I think they show that they are going to do pep courage to push forward on uniting us behind getting some of the big policies done, and programs done that we haven't in the past four years.
Tanzina: Kathryn, you've mentioned the COVID-19 pandemic, which has forced so many Americans out of work. It has forced many people to become food insecure. It has forced people to adapt to new work environments that in many ways have become almost excruciatingly difficult for people. Again, a lot of Americans are even facing evictions as they wait for more stimulus from the federal government. What can the business community do to help ameliorate some of the pain that regular Americans are feeling the financial pain and the lack of employment that many of them are facing, particularly as we head into some of the darker weeks of this pandemic?
Kathryn: There are a number of things there, and in the immediate term, obviously, we need an additional federal stimulus package which, since June, there's been an effort to get additional funds, the funds that were appropriated in the Cares Act last spring, we're anticipating a three-month term of the pandemic, and now we're in month nine, and this is, so the needs of people and the suffering of people has really not been addressed for the past- beyond those first three month periods.
That's one thing that we all have to work together, and the business community is very supportive of additional stimulus, and also focusing attention on those sectors of the economy, low-wage workers on the one hand, and on the other hand, small businesses that have been ravaged by this. In New York City, we have 230,000 small businesses. We expect as many as a third of those will not survive the pandemic. Already 500,000 of their employees have lost their jobs during this. Now, with the second surge coming our way, we're very, very concerned about losing more jobs, more businesses, and the results of that will be obviously huge, pain and suffering and potential civil unrest. This is not good for our country. You mentioned the eviction potential. There is a moratorium on evictions both residential and commercial small business in New York and in much country that the end of that is December 31st. What are we going to do when that happens? We've got to have a plan, and that's why we need to be focusing not on the results of the electoral process or what's going on in the courts.
That's a distraction from-- We ought to be figuring out how are we going to help people make up the back rent, because very few people have the resources to be able to pull out of their pocket, particularly if they've lost their job, a year's back rent, and we already have a huge homelessness problem.
I could go on and on. Unfortunately, we have a cascade of tragedies and challenges. That's why we can't be fighting over who won or lost an election that was over weeks ago. We have to be focused on how are we going to solve these problems, and that's got to bring all parties together for that solution. That's the passion that our business community in New York feels, and I think businesses across the country, as I'm communicating with our counterpart organizations in other states, they really want America to come together and figure out how we're going to help those most in need, and how are we going to rebuild our economy.
Tanzina: We're going to be talking about the effect on small businesses later in the show. Kathryn Wylde is the President and CEO of the Partnership for New York City. Kathryn, thanks so much for joining us.
Kathryn: Thank you very much.
Tanzina: We just heard from one of the major players in corporate America, who was putting pressure on the Trump administration and on Republicans to get on with the presidential transition. Now with the transition underway, business leaders are going to start to lay the groundwork for a relationship with the Biden-Harris administration. Kate Kelly is a business reporter for the New York Times and author of the book The Education of Brett Kavanaugh, and she joins me now. Kate, welcome to the show.
Kate Kelly: Tanzina, thank you so much for having me.
Tanzina: Kate, we just heard from Kathryn Wylde, Chief Executive of the Partnership for New York. Who are some of the other major corporate players who are not just acknowledging Biden's victory, but who sort of surprised you by speaking out?
Kate: I'm not sure that any individual surprised me so much as the size of the group surprised me. I think, in the end, they had about 164 signatories to this pretty strongly worded statement saying that the lack of a transition was a threat to national security and that our democracy was weakened by the situation. Certainly, that there was urgent business to contend within the United States. Although I think that's a pretty much universal agreement. It was just quite a sharp message to the administration, I think geared toward Emily Murphy, the General Services Administrator who needed to determine that the election was over with a Biden-Harris win, but also implicitly to President Trump.
These are business leaders who, for the most part, like to try to avoid being in the political spotlight, they will get involved with issues that are important to their employees and their businesses, whether that be taxes, tariffs, immigration issues like that, but to really strongly criticize a sitting administration is rare.
Tanzina: A sitting administration, that is essentially a lame duck though. Was this a way to also try to curry favor with the Biden administration now that more folks have become more comfortable saying that the Trump administration is essentially over?
Kate: I don't think so. I think that there are people on that list who are registered Republicans. Now, to be fair, some of those supported Biden and were not fans of Trump, although typically they would vote Republican, and I assume, although I couldn't tell you a name, there are people on that list who voted for Trump as well.
One interesting development yesterday was that Blackstone, the private equity firm spoke out in two ways. The president of the firm, John Gray signed the letter. Now, of course, Gray, if you follow him, is a big Biden supporter and was hosting fundraisers for him at the very bottom of his political process back in February, where he was behind in the primaries, but at the top of that firm is Steve Schwarzman, the CEO who has been not only a very generous Trump and Republican donor, but has been an informal advisor to Donald Trump for these four years.
Schwarzman did an interesting thing. He left it to Gray to actually sign the letter on Blackstone's behalf, but Schwarzman spoke out in his own statement and said words to the effect that the election is over, and it's time to move on. I think coming from someone like him, yesterday, that was notable as well.
Tanzina: We talked a little bit about this in the previous segment, but was the Trump administration good for corporate America?
Kate: I think, in many ways, yes. Now, of course it depends on what kind of business you're in, but yes, in many ways, it was. In his very first year in office, Donald Trump managed to pull together a package of tax reforms and get them passed through Congress that lowered the corporate tax to 21%, and in some cases lowered individual taxes. There were some elements to that that benefited, for example, the real estate business by preserving some advantages that real estate companies had.
Now, some would argue that for smaller companies and for limited liability corporations it was another story, but by and large, that was a benefit to corporate America. The tariffs. Many people were hawkish on China in terms of tariffs in the business community and thought that America needed to take a harder line when it came to protecting our intellectual property from being stolen and, or demanding better trade terms from China. I think many regarded that as a benefit.
Then, of course, there were the environmental protections that were rolled back, the war on regulation, parts of the landmark, financial regulation reforms that were passed after the great financial crisis, in 2010 these laws were passed, started to be weakened or rolled back.
You had a business-friendly package to be sure, but the pandemic this year has of course been immensely damaging to the economy. Although I think there's consensus that any president would have struggled with this pandemic. In fact, Barack Obama on your colleague, Terry Gross's show said that. There is a feeling that President Trump didn't do enough to meet the challenge head-on did not warn Americans and with that companies and employers, early on to take measures to have a federal mask mandate, to have a sort of coherent federal-led strategy that would allow us to control the spread of the pandemic, and with that, the economic repercussions, which have been very, very deep and grave.
Tanzina: The transition from a Trump administration to a Biden administration has officially begun. What role would any of these folks have, any top business leaders have in the transition team? Will they be talking to these folks to kind of help lay the groundwork for what a Biden administration can and should do with corporate America?
Kate: I think some of them already are. You look at that list of signatories from the letter, and somebody like Blair Effron from Centerview Partners, which is a financial advisory firm, or even John Gray, who I mentioned earlier, those folks are in touch with team Biden. They were very active donors, had access to the candidate and his team, and very well may be informally advising the transition team and incoming administration on various things.
In terms of whether these business leaders will be appointed to senior positions, I think we're not going to see a lot of that. If you look at the wave of announcements we saw yesterday, somebody like Janet Yellen, who came through the Federal Reserve System and is now the treasury secretary nominee, or Jake Sullivan who will be on the White House team. These are not people who come from Goldman Sachs or private equity. These are people with a different sort of background who have previous government experience.
I think there will be something of an allergy in the Biden administration to having senior Wall Street people or other corporate people in these jobs, not to say there will be none, but I think there's an awareness on the part of the Biden-Harris team that Wall Street has a bad reputation, especially in their progressive wing. They're going to have to be compromised brokers within the Democratic Party.
I think a former candidate like Senator Elizabeth Warren, or Senator Bernie Sanders, who worked hard to help get Biden elected would really look askance at selections like those, but the other interesting thing about Joe Biden is, from my understanding, he does not have a ton of friends on Wall Street. He is someone who, as we've heard on the campaign trail, was in government for 47 years, his home state of Delaware, yes, is a place where a lot of corporations are based in. There are companies like DuPont and credit card companies, and he got to know those business leaders, but partly because of all his time in government, partly because this campaign was waged somewhat virtually, he did not have a chance to really get to know people along the way. I think, to name somebody from Goldman, and we're just using that as an example, but from one of these Wall Street firms, or even a lot of corporate firms, would not necessarily be the natural fit for him.
Tanzina: Speaking of the more progressive wing of the Democratic Party, we've seen more growing corporate activism under the Trump administration. Is that something you would expect to see increase under a Biden administration?
Kate: Yes and no. I think this is a long-term trend and a really interesting point. My colleagues and I have observed that you have a moment here where maybe it's the younger generation of workers and a sort of idealism that you sometimes see, maybe it's because of the weakening of institutions like religious organizations, but people increasingly look to their employer to help them fulfill a sense of mission. They want to have employers who are principled, who have values that they resonate with. I think, partly because of that, and partly because Donald Trump was such a galvanizing commander-in-chief, who raised very difficult questions about immigration, about equality, about so many issues.
You saw the companies were in some cases trying to fill the void and speak out on behalf of their employees and their values. I think that that--
Tanzina: Thinking about things like when companies came out and said Black Lives Matter, for example.
Kate: That's right. I think companies were animated by events like early on in the Trump administration, you have the travel and immigration ban. Generally, that's bad for companies. They look overseas for talents, and they want to have a workable visa program, not to mention they need their employees to freely travel around the world. Another case would be Charlottesville. That was an extremely galvanizing event for many, many Americans, not least of which workers, and workers and companies, they wanted- if their president was not going to say, "I'm not drawing a moral equivalency between neo-Nazis whose actions result in the death of someone and counter-protesters," they want their bosses to do so.
Black Lives Matter is yet another example, so yes, I think there have been a number of galvanizing events, and the president in many cases has fanned the flames of controversy as opposed to calming them. I think this long-term trend is probably here to stay of a greater degree of corporate activism on targeted issues that really matter to employees and business.
Tanzina: Kate Kelly is a business reporter for The New York Times. Kate, thanks so much.
Kate: Thank you.
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