Joe Crowley, the former chair of the House Democratic Caucus who famously lost his 2018 primary to progressive challenger Rep. Alexandria Ocasio-Cortez, D-N.Y., is now lobbying for one of Wall Street’s most powerful advocacy groups against his party’s tax hikes on multinational corporations.
Securities Industry and Financial Markets Association, or SIFMA, has deployed Crowley to court his old colleagues as Democrats finalize legislation to implement President Joe Biden’s Build Back Better initiative, which seeks a fairer tax system and greater revenue to pay for expanded Medicare coverage, universal pre-K, and other domestic priorities. Starting in July, SIFMA, whose members range from BlackRock and J.P. Morgan to Amazon Web Services and IBM, hired Crowley and other lobbyists at law firm Squire Patton Boggs — including a former intern for Sen. Joe Manchin, D-W.Va. — for $30,000, per a document posted on the Senate’s disclosure site Thursday.
Senior lawmakers-turned-lobbyists like Crowley typically serve their special interest clients by convincing former allies to promote industry talking points to committee chairs or party leaders. On September 24, Texas Democratic Reps. Vicente González, Henry Cuellar, and Filemón Vela sent House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer a letter criticizing the proposed tax increases on corporations’ foreign profits that Crowley is now targeting for SIFMA. Crowley’s former leadership PAC donated to all three congressmen’s campaigns over his time in Congress, and Vela was a vocal supporter of Crowley’s leadership ambitions.
“We believe increases to the [global intangible low-taxed income, or GILTI] tax would inhibit U.S. competitiveness abroad and risk American jobs and capital investments,” the lawmakers wrote, referring to the government’s percent charge on U.S. corporations’ patents, trademarks, and other intellectual property-related assets held overseas. The Build Back Better Act, which passed the House Ways and Means Committee just days before the letter was sent, raises the GILTI rate from 10.5 to 16.5 percent.
This wasn’t the only time Gonzalez, Cuellar, and Vela tried to undermine House Democrats’ Build Back Better Act. They also joined New Jersey Democratic Rep. Josh Gottheimer’s unsuccessful attempt to weaken the party’s unity and commitment to finish the reconciliation process, which allows the bill to pass with a simple majority.
The 16.5 percent GILTI tax that they oppose isn’t even as high as the rate desired by Biden and the majority of House Democrats — who consider the current 10.5 percent rate, which Republicans established in their 2017 Tax Cuts and Jobs Act, or TCJA, as a giveaway to multinational corporations — as the domestic corporate tax rate is 21 percent. Both Biden’s Made in America Tax Plan and the No Tax Breaks for Outsourcing Act — introduced earlier this year by Rep. Lloyd Doggett, D-Texas, and co-sponsored by more than 115 House Democrats — sought to equalize the rates to curb the TCJA’s offshoring incentives.
Crowley himself ardently opposed the TCJA, calling it a “tax scam” benefiting the “largest, wealthiest multinational corporations in the history of the world.” Now he’s representing SIFMA and its members like IBM, whose global tax policy director earlier this year said Democrats’ plan to fix that scam is “penalizing companies that have been operating overseas for years.” Crowley did not reply to a request for comment on his new client.
The former House Democratic leader joins SIFMA’s advocacy team at a particularly critical time as Democrats shape their final Build Back Better plan. Progressives, including Crowley’s successor Ocasio-Cortez, managed to fend off conservatives’ efforts to force a House floor vote on the Senate’s bipartisan infrastructure bill without finishing the reconciliation process. However, obstruction by Manchin and Kyrsten Sinema, D-Ariz., whose support is essential in a Senate split 50-50, has driven Democrats to come down from their previous plan to spend $3.5 trillion over 10 years.
The shift leaves room for changes to the larger bill’s tax proposals, including in the Senate, where Finance Committee Chair Ron Wyden, D-Ore., is also seeking to overhaul the GILTI tax but hasn’t shared specific details. SIFMA members are keeping an eye on that opening; a public report from Morgan Stanley on September 23 said the corporation expects “the moderate contingent to prevail again, with the actual rate moving to 15 percent,” on par with the minimum global corporate tax backed by the Organization for Economic Cooperation and Development last week.
SIFMA itself hasn’t released public statements specifically on Democrats’ GILTI reforms, but it has made its opposition to the Build Back Better Act’s tax increases on the wealthiest individuals clear. Days after the Ways and Means Committee finished marking it up, SIFMA Managing Director Tim Cameron released a statement on September 17 criticizing capital gains tax hikes, restrictions on individual retirement account contributions, and other changes intended to reduce inequality.
“As Congress debates the reconciliation package, raising taxes on Main Street investors is the wrong direction to look and runs contrary to the Biden Administration’s promise not to raise taxes on middle-income Americans,” Cameron said, even though the increases are targeted to the wealthiest taxpayers; for example, the retirement account limit would only apply to individuals making at least $400,000 whose balances are greater than $10 million. “We urge Congress to carefully consider the real-world impact on everyday savers and move away from these tax hikes.”
Crowley joined Squire Patton Boggs soon after he left Congress and started lobbying earlier this year for a musicians’ property rights nonprofit, a New York City hospital, a home healthcare advocacy group, and a medical school association. SIFMA is his first client in the financial industry, according to a search through the Senate’s lobbying disclosures, and the first that’s particularly outspoken against his party’s agenda. Crowley also recently started lobbying for an IBM-backed company working with decentralized finance companies and will monitor distributed ledger technology policy.