Widening rift on mergers during pandemic divides Democrats and Republicans
The letter, which POLITICO reviewed, painted the plans in bleak terms.
“Unfortunately, these ideas are part and parcel of the latent socialism embraced by many modern Democrats, which represents an existential threat to America’s economic superiority,” they wrote.
A separate missive slated to be sent Wednesday by Sens. Elizabeth Warren (D-Mass.) and Amy Klobuchar (D-Minn.) and Rep. David Cicilline (D-R.I.), who chairs the House Judiciary antitrust subcommittee, calls for the Treasury Department and the Federal Reserve to block large companies receiving coronavirus relief funds from engaging in mergers they see as harmful.
“To protect small businesses and their workers, and to ensure a functioning, competitive economy as we emerge from this crisis, we urge you to use your broad authority and discretion to restrict large companies that receive taxpayer-subsidized bailout funds from engaging in mergers and acquisitions,” the liberal lawmakers wrote in the letter to Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell.
Cicilline last month proposed a broad moratorium on most mergers during the worldwide emergency, and has called for the plan to be included in any next coronavirus relief package Congress takes up. Every Republican on his panel is now on the record saying the idea would be catastrophic.
“A moratorium would reduce the flexibility that American businesses have in deciding how to best access capital,” they wrote. “Such flexibility is vital, especially during and in the wake of economic crises. With companies struggling to survive, it makes no sense to deny them a primary way to access cash — especially when there may be limited alternatives available.”
A senior GOP aide was even blunter in dismissing the Democrats’ proposals.
“Only those in the hipster antitrust movement think banning mergers is a good idea and it’s clear they’ve let their kombucha ferment for too long,” said the aide, who asked to speak anonymously because they were not authorized to discuss the Republican letter.
The letter is addressed to Makan Delrahim, the head of the DOJ Antitrust Division, and Ian Conner, the director of the FTC’s Bureau of Competition. Delrahim’s office asked Congress for the option of taking more time to review proposed mergers, but the Hill has yet to grant it that authority.
Warren and Rep. Alexandria Ocasio-Cortez (D-N.Y.) have gone even further than Cicilline, proposing legislation that would bar deals by private equity and big tech companies so long as the economy is struggling.
Klobuchar, the top Democrat on the Senate’s leading antitrust panel, and 14 other Democratic senators took a more moderate approach in a separate missive this month that urged federal antitrust enforcers to vigorously challenge mergers during the pandemic.