Tax Bill Negotiators Get Big Money from Companies Automating and Outsourcing Jobs

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Left: Rep. Peter Roskam, September, 2015. Photo by Alex Wong/Getty Images. Right: Rep. Diane Black, January, 2017. Photo by Alex Wong/Getty Images. 

By Steve Horn

Part of a series on FedEx, UPS, and their positions on taxes and jobs

Campaign finance records show that two of the House Republicans now negotiating to reconcile differences between their tax bill and the Senate’s version have received tens of thousands of dollars from two companies that are both pushing for tax cuts but have not said they will use the windfall to hire any new workers.

Rep. Diane Black (R-Tenn.) and Rep. Peter Roskam (R-Ill.) were named by Speaker Paul Ryan (R-Wis.) to the conference committee now working on a compromise bill that can pass both chambers.

Black has received $37,500 in campaign contributions from FedEx, the largest company in her state, during her congressional career. As TYT previously reported, FedEx has lobbied for tax cuts and is investing tens of millions of dollars in measures that could result in fewer jobs there, rather than more.

Roskam has received $54,254 for his congressional campaigns from UPS, which has a major hub just outside his district near Chicago. Like FedEx, UPS has pushed for tax cuts despite having enough cash on hand to pay out dividends and buy back shares of the company’s own stock. TYT has reported on multiple initiatives UPS has invested in that stand to lower the company’s full-time headcount.

Roskam Communication Director Veronica Vera declined to respond when asked whether UPS’s donations influenced his stance on the tax bill and whether Roskam could guarantee that a company like UPS will create jobs if given a tax cut.

Explaining Roskam’s support for the bill, Vera told TYT that, “This bill will help America grow a healthy economy and good jobs. It incentivizes companies to come back to the United States while remaining competitive in a global market. For example, AT&T has committed to step up its 2018 U.S. investment by an additional $1 billion if Congress passes and the president signs into law the corporate tax provisions in the Tax Cuts and Jobs Act.”

Vera also cited an estimate by the Tax Foundation that the tax bill—which was not written at the time of the estimate—would create 37,010 jobs in Illinois. As TYT previously reported, the foundation’s chair is a Ryan donor and the top tax executive at Eli Lilly, which laid off workers after getting a massive windfall from 2004 tax breaks.

(On November 15, the Tax Foundation reported a calculation error and revised its estimated national job creation—based on the House bill—downward from 975,000 to 890,000.)

FedEx has spent $7.6 million on lobbying including for tax issues, this year, while UPS has spent $5.68 million. The GOP is aiming to lower corporate tax rates to 20 percent.

Both companies belong to the RATE (Reforming America’s Taxes Equitably) Coalition, a lobbying and public relations advocacy organization which for years has advocated for a drop in the corporate tax rate. RATE has spent $60,000 lobbying on taxes this year, according to the Center for Responsive Politics. And the GOP has relied on the group to make its case for corporate tax cuts.

On November 29, CNBC and Business Insider published a RATE Coalition open letter to Congress signed, it said, by 137 economists. The letter explicitly tied the passage of the tax bill to job creation, as both FedEx and UPS have.

“We firmly believe that a competitive corporate rate is the key to an economic engine driven by greater investment, capital stock, business formation, and productivity—all of which will yield more jobs and higher wages. Your vote throughout the weeks ahead will therefore put more money in the pockets of more workers,” the letter said.

The letter was posted on the White House website, and tweeted about by President Donald Trump on his personal account and by the White House, as well as by the Senate GOP. Speaker Ryan (R-WI) disseminated the letter to the press.

On Friday, The Intercept reported that many of the signatories were not actually working economists and that some of those who were are employed by large corporations or other advocates of tax cuts.

Rep. Black is now raising money for a gubernatorial race and in September attended a private dinner hosted by the Committee to Unleash Prosperity, a consortium of politically connected conservative economists whose founders include one of then-candidate Donald Trump’s top economic advisers, Stephen Moore.

FedEx CEO Fred Smith attended the dinner alongside Black and Moore. Moore later told TYT that Smith told the group his company would hire “thousands” of new workers if its tax rate were cut to 15 percent. FedEx would not confirm this account and, along with UPS, has declined to comment on TYT’s reporting.

Publicly, Smith has said only that passage of comprehensive tax reform could lead to wage hikes for blue collar workers.

Black was sixth on the list of House Republicans receiving donations from FedEx and its employees during the 2016 election cycle. The top House Democratic recipient of FedEx donations in that cycle was Rep. Steve Cohen (D-Tenn.), whose $11,250 was slightly higher than Black’s $10,000. Cohen voted against the bill.

Black’s congressional and House committee offices did not respond to repeated requests for comment.

In addition to investing hundreds of millions in existing automation, FedEx and UPS have obtained dozens of patents and spent millions of dollars on research and development in pursuit of new automation technology. The two companies have invested specifically in delivery drones and driverless-truck technology.

For peak holiday seasons, UPS now deploys a corps of “Seasonal Personal Vehicle Package Drivers” who work as contractors, similar to Uber and Lyft drivers, using their own vehicles to deliver packages.

Congressional leaders and the White House have stated that they hope a final version of the Tax Cuts and Jobs Act can pass by Christmas. Grassroots activists have been protesting on Capitol Hill in opposition to the bill.

Find the full “TYT Investigates Series: Tax Cuts & Job Creation – UPS & FedEx” here.

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