Trump puts companies on notice with Carrier deal
BY VICKI NEEDHAM AND JONATHAN SWAN - 11/30/16 07:26 PM EST 2,007
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Donald Trump and Mike Pence will take a victory lap in Indianapolis on Thursday to tout what they are presenting as a successful negotiation with Carrier to keep nearly 1,000 U.S. jobs from moving to Mexico.
Trump’s transition team said the effort shows that the president-elect is determined to keep his campaign promises to protect U.S. jobs and workers.
She characterized Carrier’s decision to keep the jobs at its Indianapolis plant as a winning negotiation led by Trump that could be duplicated once the businessman takes office.
Few details were revealed on Wednesday about what was offered to Carrier, which is owned by United Technologies, a much larger company based in Connecticut that has contracts with the U.S. government.
Media reports suggested that Carrier, which produces furnaces in Indianapolis, would keep about 850 jobs in the state and was given tax incentives by Indiana’s government to stay.
Carrier in a statement Wednesday said incentives offered by Indiana were “an important consideration” in its decision, but offered no further details.
The White House downplayed the news, saying President Obama’s policies had created more than 800,000 manufacturing jobs.
But Trump’s team argued the Carrier decision shows Trump can build a positive climate for business — behind an overhaul of the tax code and reduction of regulations — that will grow the economy at a faster pace than what has been seen during the Obama years.
“If you actually create a climate where employers feel the incentives are good enough to stay here — the taxes will be lowered, the regulations won’t be so oppressive, they won’t be under the burden of ObamaCare, they feel like there’s a more hospitable business climate — many of them may reconsider and stay,” Conway said.
John Feehery, a Trump supporter and a Republican strategist who is also a columnist for The Hill, deemed Trump’s use of the bully pulpit to keep American jobs here “great politics.”
Republican strategist Alice Stewart said “it’s extremely smart” of Trump to “show evidence this early that he’s able to negotiate policies that will work.”
“He made it clear throughout the campaign that part of his economic plan would be to put tariffs on companies that take their manufacturing plants overseas,” said Stewart, who served as communications director for Sen. Ted Cruz (Texas) during the GOP presidential primaries.
Fiscally conservative groups are staying quiet about the deal for the time being.
But if it turns out that Trump and Pence have offered any special concessions to Carrier — either at the federal level or the state level, given that the vice president-elect is still the governor of Indiana — then those free-market groups are likely to cry foul.
“The particulars of this agreement haven’t been released, but our position on corporate welfare is well-known and that has not changed,” said Brent Gardner, chief government affairs officer at Americans for Prosperity. The group is the major grassroots organization within the network of conservative mega-donors Charles and David Koch.
Chart Westcott, a Texas-based investor who belongs to the Koch donor network, said that considering United Technologies is a major defense contractor, he would have no trouble if “Trump went in there and simply was using his leverage … saying, ‘Look, you want to do business with us? This is part and parcel of doing business, is not shipping American workers overseas.’ ”
“I’d see that as a positive,” Westcott said. “That’s just saving American jobs using the leverage and the bully pulpit of the U.S. president.”
But if Trump cut a deal with Carrier in which American taxpayer dollars are being spent, “then that’s a huge moral hazard and not necessarily a good thing for the U.S. taxpayer, even if it is great for the workers at Carrier,” Westcott added.
“That’s the kind of government interference that I oppose.”
“So the devil,” he added, “really is in the details.”
In two speeches toward the end of the presidential campaign, Trump argued against using incentives like low-interest loans and tax cuts to entice U.S. firms to stay put.
“That’s not what they need,” Trump said in August during remarks in Pennsylvania. “They have money. They want to go out, they want to move to another country, and because our politicians are so dumb, they want to sell their product to us and not have any retribution, not have any consequence. So all of that’s over.”
Trump’s ascent to the Oval Office could make U.S. companies think twice about relocating overseas, for fear of triggering his wrath and that of his supporters.
But at least one economist said Trump’s willingness to negotiate one-on-one with a company raises the specter that other CEOs would threaten to leave the country in exchange for a sweeter deal.
What isn’t in dispute is that Trump is breaking new ground as negotiator in chief, splitting with the Republican Party’s free-market orthodoxy.
For now, many Republicans appear willing to go along.
House Freedom Caucus Chairman Jim Jordan (R-Ohio), a leading conservative in Congress, said Wednesday he had no issues with Trump personally getting involved to prevent the outsourcing of jobs.
“What I know is jobs that were slated to leave are here, are staying. I think that’s positive, that’s good, that’s great,” Jordan told The Hill in an interview.
“My attitude is, if the president of the United States thinks it’s in the best interest in the country, that’s good that he’s standing up and encouraging business to stay here and keep jobs here in the United States.
“That’s a good thing. I don’t think anyone would disagree with that, and certainly no one is saying he did anything unconstitutional.”
Ben Kamisar and Scott Wong contributed.
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