“I have not heard from my members today, which is interesting. I think the reason is what he announced is so in line with the conversations we’ve been having,” Harvey, the chief executive officer of the Greater Houston Partnership, said Friday. “This will come as a relief to the business community, to have an order that requires all of them to move together.”
The president’s decision to require medium and large companies to subject their employees to mandated vaccination or weekly coronavirus testing represents a sharp expansion of the federal government’s workplace powers, according to political scientists and legal experts.
For a leader who has said he is committed to reviving Washington’s bipartisan impulse, it also amounted to an unapologetic offensive in the culture wars that have divided the country and inflamed its politics.
Instead of directly mandating Americans take the vaccine, Biden effectively outsourced the job to the business community. But unlike previous White House interventions in the market — notably including President Barack Obama’s 2010 health insurance mandate — Biden’s action was welcomed by many bosses.
Texas Gov. Greg Abbott (R) called Biden’s move “an assault on private businesses,” but businesses in his state’s largest city did not see it that way.
“The context in which this is occurring really matters,” said Harvey, a former energy industry executive. “We’ve been hit hard by this fourth wave [of the virus] … and employers simply must play a role in addressing this problem. We’ve tried it every other way.”
In a recent survey, 23 percent of partnership members already required coronavirus vaccines for some or all employees and an additional 30 percent were considering doing so. Of the remaining members that were not, most said they feared that some workers would quit rather than submit.
The president’s blanket order, applying to all companies with at least 100 employees, eliminated that worry, Harvey said.
Texas is a hotbed of resistance to pandemic health measures. Its vaccination performance — 58.6 percent of those 12 and older are fully vaccinated — trails the national average, according to state and federal data.
Employers in the Houston area have been talking for weeks about what to do in response to the virulent delta strain of the coronavirus, which has emptied workplaces and filled hospitals, Harvey said. Now, they can get down to it.
“The reality is there are a number of businesses that are wanting the government to step in. This gives them the cover to do what they want to do anyway,” said Charles Shipan, a political scientist at the University of Michigan.
Indeed, the vocal Republican opposition to the president’s initiative threatens to leave the GOP at odds with its traditional business constituency.
Houston is a largely Democratic city. But Harvey’s group has members in 11 counties, nine of which backed former president Donald Trump last year, and includes numerous companies in traditionally conservative industries, such as oil and banking. Among them: ExxonMobil, Chevron, JPMorgan and Wells Fargo.
Biden’s new covid plan also drew backing from some national business groups, such as the Business Roundtable, the National Association of Manufacturers, and the American Apparel and Footwear Association
And the president cited the example of several large companies that already require employees to be vaccinated, including Disney and United Airlines and “even Fox News.” (The cable network actually required employees to disclose their vaccination status, not get vaccinated, according to published reports.)
“We’re going to reduce the spread of covid-19 by increasing the share of the workforce that is vaccinated in businesses all across America,” Biden said, speaking in the State Dining Room.
The president said he was acting, in part, to protect the economic recovery. In recent weeks, the resurgent virus has drained momentum from industries that had been rebounding, such as the airlines.
Employers added just 235,000 jobs last month, well below economists’ expectations, and forecasts for September aren’t much better.
In August, the University of Michigan consumer sentiment gauge fell to its lowest mark since the pandemic’s initial weeks. Wholesale inflation on Friday hit a new annual high of 8.3 percent. And on Wall Street, stock prices have drifted sideways for two months.
If the need for federal action last week seemed clear, the response in some quarters to Biden’s announcement was hostile.
Several Republican governors, including in Texas, Georgia, and South Dakota, vowed to fight the mandate in court.
South Carolina Gov. Henry McMaster said Biden and the Democrats had “declared war against capitalism” and he pledged to “fight them to the gates of hell to protect the liberty and livelihood of every South Carolinian.”
Even before the president spoke on Thursday afternoon, the Federalist, a right-wing publication, assailed the vaccine-and-testing plan as “a fascist move.”
J.D. Vance, a Republican Senate candidate in Ohio, called for “mass civil disobedience,” urging Americans to refuse to comply with any new requirement or to pay any subsequent fine. And Josh Mandel, another Senate aspirant in Ohio, warned that Biden would use “the Gestapo” to enforce his directive.
Social media chatter about workers quitting their jobs rather than complying with the new federal mandate has left Wall Street economists unimpressed. Michael Feroli of JPMorgan Chase called it “noise,” pointing out that employees who quit are not eligible for unemployment insurance.
Jim O’Sullivan, chief U.S. macro strategist for TD Securities, said the option of weekly testing would offer vaccine skeptics an alternative, thus minimizing any workforce loss. And cautious service-sector workers might be drawn back into the labor force if it appeared that more of their co-workers were likely to be immunized, he said.
Biden’s action is the latest in a long expansion of presidential involvement in business affairs. From a laissez-faire stance in the 19th and early 20th centuries, Washington responded to war and economic crises by increasing its sway over commercial activities.
Numerous White House occupants have battled with powerful industries over their commercial practices. President Theodore Roosevelt broke up John D. Rockefeller’s Standard Oil trust. President John F. Kennedy forced U.S. Steel to roll back price increases at a time of incipient inflation. President Richard M. Nixon went farther in 1971, imposing economy-wide wage and price controls.
Yet Biden’s coronavirus plan tests the limits of presidential power, according to Shipan, who has written on the subject. The president is requiring employers to delve into employees’ personal medical practices, not companies’ market behavior.
“This is a break from what presidential power has done in the past,” said Shipan. “That doesn’t mean it’s necessarily outside the boundaries of what presidents have the power to do.”
Biden has ordered the Labor Department to write an emergency rule requiring employers with more than 100 workers to demand weekly tests or proof of vaccination. Violations are punishable with fines up to $14,000 each.
Up to 80 million Americans could be covered by the action.
In 1970, Congress gave the department’s Occupational Safety and Health Administration (OSHA) authority to write regulations governing workplace safety, including emergency standards that are valid for six months.
In June, the agency issued an emergency rule to prevent the spread of coronavirus in health care settings. But courts have fully or partially struck down five of the nine emergency rules OSHA has promulgated, according to the Congressional Research Service.
Josh Blackman, a constitutional law specialist at the South Texas College of Law, said Biden was attempting to stretch a half-century-old law beyond what Congress had intended.
OSHA regulations customarily deal with workplace conditions that directly affect employee health and well-being, such as the handling of hazardous chemicals, slippery floors or dangerous stairs.
“This is completely novel. There’s a credible argument it goes beyond the scope of delegated authority,” he said. “Lawsuits will be filed and inevitably some judge will find this goes too far.”