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Monday, May 23, 2022




Staff Reporter

California’s tight race for U.S. Senate is the classic liberal vs. conservative match-up.

Democratic incumbent Barbara Boxer favors raising the minimum wage, clamping down on polluters and giving patients the right to sue their HMOs.

Republican challenger Matthew Fong wants to reduce taxes, loosen some environmental standards, and impose strict caps on corporate liability.

Given these differences, Fong would seem the likely candidate to garner strong business support. But California’s corporate types generally have steered clear of Fong, who faces a cash shortfall as the neck-and-neck race enters its home stretch.

Through Sept. 30, federal campaign finance reports show that Fong had raised $7.8 million, leaving him with a limited budget for television ads in the campaign’s closing days. Boxer, meanwhile, has raised $12 million.

“The business community may not care for Boxer, but they are not putting their money where their mouth is,” said Tony Quinn, a Sacramento-based Republican consultant and advisor to the state chapter of the National Federation of Independent Business. The NFIB, which is comprised mostly of small and mid-sized businesses, has endorsed Fong.

This cash shortage prevented Fong from pulling away from Boxer when her campaign was reeling from the impact of the Clinton scandal. Most polls now show the two candidates in a statistical tie, with the difference between the two less than the margin of error for the polling sample.

“There was a dip for Boxer,” said Los Angeles-based Democratic consultant Joe Cerrell. “But now I think she has come back. Fong is not getting the infusion of money he needs.”

Quinn said one reason for the lukewarm support by business is the lack of urgency.

“The economy is pretty good right now, and no one is suggesting that either house of Congress is going to go back into Democratic hands,” Quinn said. “There is no great concern from business that something bad will happen if the ‘wrong person’ gets elected.”

Also, because she is not in the Democratic leadership nor is she considered a “swing vote” on key issues as is California’s other senator, Dianne Feinstein there seems to be less concern that any anti-business stances by Boxer would pose a real danger.

What’s more, the candidates and media have devoted most of their attention to subjects of relatively little interest to business, such as abortion and gun control.

In interviews with the Business Journal, both candidates stressed their business credentials. Boxer said she helped bring federal contract dollars and transportation funding to the state during her first term in the Senate.

“After the Northridge earthquake, Senator Feinstein and I really targeted L.A. and we were able to steer about $11 billion to L.A.,” Boxer said. “If you look back, you will see that the economic recovery began about the same time.”

Boxer said she also voted to reform the Food and Drug Administration to bring quicker approvals for new drugs and helped secure funding for the C-17 military cargo plane, which is being built in Long Beach.

Fong, meanwhile, said he has learned about the global economy in his role as the state’s chief investment officer.

“I have talked with finance ministers and heads of stock exchanges throughout Asia and Europe. I know what they are facing and how California is impacted by what happens elsewhere around the world,” he said.

Fong added that his four years as a member of the state Board of Equalization has made him very familiar with the federal tax code, which Republicans in Congress may try once again to reform next year.

Both candidates said they plan to seek further tax breaks for business. Boxer said she supports reducing the capital gains tax on start-ups by 50 percent, and creating more tax credits for “research and experimentation” by high-tech and biomedical companies.

Fong said he would back legislation to completely eliminate the capital gains tax and would push for lower tax rates overall.

Also on the high-tech front, both candidates said they support greater protections against the piracy of software, especially in China.

But in other areas, the two sharply disagree. Fong, for example, is critical of Boxer’s ineffectiveness at unifying the California congressional delegation a sore point among state business leaders.

“The California delegation has been picked apart time and time again,” Fong said. “Other states have been able to come in and take contracts that should have gone to California. We need a solid team offense. When other states try to steal our contracts, we need to play hardball, to let them know that the entire California delegation will vote in unison to block things that those states want.”

Boxer said she and the rest of the California delegation have met about two dozen times in her first term. Some of the efforts have paid off most notably in funding for transportation projects like the Alameda Corridor while others have been less successful, she said.

“It’s very hard to bring folks like (conservative former Orange County Republican Congressman) Bob Dornan and (liberal Bay Area Democrat) George Miller together,” Boxer said. “How can you secure funding from the Department of Education when close to half of the delegation doesn’t even believe the department should exist?”

Boxer challenged Fong’s position on U.S. funding for the International Monetary Fund, which she called essential to ensuring the financial and political stability of California’s major trading partners.

“The world is in a pretty bad situation. We have to worry about recession in the rest of the world eventually spreading here,” she said. “We need to fund the IMF to ensure democracy and stability around the world.”

Fong spokesman Steve Schmidt said Fong supports IMF funding, but only if it’s linked to IMF reforms. “He believes that reforms need to be made to the lending institution,” Schmidt said. “The American taxpayer has no business giving money freely to Russian millionaires to put into Swiss bank accounts.”

Fong and Boxer also disagreed on tort reform. Fong said capping damages and making it harder for plaintiffs to file frivolous lawsuits against companies is at the top of his agenda.

“We desperately need to focus on tort reform. Too many of our manufacturers are being sued to death,” Fong said.

Boxer said she supports narrow tort reforms, such as the recently passed “Uniform Standards Act” that closed a loophole in previous legislation that placed limits on the filing of shareholder class action lawsuits.

However, she said she would not support broader tort reform.

“Consumers and individuals need to have their rights upheld, and I’m proud of my record in ensuring that they have recourse,” Boxer said.

The two also clash on health care reform. Boxer supports the Patients’ Bill of Rights introduced earlier this year by Sen. Edward Kennedy, D-Mass., and backed by Clinton. That bill would give patients the right to sue their HMOs when their medical decisions go awry. Giving patients that right would overturn a key provision of the federal Employee Retirement Income and Security Act, which patients’ advocates say blocks the ability of patients to sue their HMOs.

Fong said he backs the right of patients to sue their HMOs. However, he said he also supports legislation that would first require disputes to go to independent review panels.

The two candidates also differ on environmental issues. Boxer favors tightening air and water pollution standards, opposes offshore drilling and has mounted a vigorous campaign against the proposed low-level nuclear waste dump in Ward Valley, near Needles. The biomedical industry and the administration of Gov. Pete Wilson have been lobbying hard for the dump, which has been blocked by the Clinton administration on fears the waste would contaminate the nearby Colorado River.

Fong is on record in support of easing the Endangered Species Act, as well as loosening air and water standards. He has said that current environmental standards impose too much of a burden on California businesses and farmers.

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