President Joe Biden touted investments in infrastructure, urged Congress to approve his nominees to the Federal Reserve board to help combat inflation, pushed a 15% minimum corporate tax rate and vowed to enhance oversight of private equity firms investing in nursing homes during his State of the Union Speech Tuesday.
"As Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up," Mr. Biden said. "That ends on my watch."
The White House on Monday released a fact sheet on improving safety and quality of care in nursing homes that criticized private equity firms.
"Too often, the private equity model has put profits before people — a particularly dangerous model when it comes to the health and safety of vulnerable seniors and people with disabilities," the White House said in its fact sheet. Citing a March 2020 working paper from the progressive think-tank the Center for Economic and Policy Research, the White House said private equity firms' investment in nursing homes has increased to more than $100 billion in 2018 from $5 billion in 2000, with about 5% of all nursing homes now owned by private equity firms.
The Department of Health and Human Services and other federal agencies "will examine the role of private equity, real estate investment trusts and other investment ownership in the nursing home sector and inform the public when corporate entities are not serving their residents' best interests," the White House fact sheet said.
As the pandemic raged, lawmakers and investors paid more attention to private equity's impact on the health-care sector.
Following Mr. Biden's speech, a spokeswoman for the American Investment Council, a trade group representing the private equity industry, said in an email that lawmakers should address the underlying issues impacting the safety and quality of care in the nation's nursing homes, such as staffing shortages. "Private equity firms only own about 9% of nursing home facilities nationwide and blaming private equity obscures the real problems at hand," the spokeswoman said. "The research cited by the Biden administration — including a working paper that has not been peer-reviewed — only focuses on a very narrow subset of nursing home patients."
On infrastructure, Mr. Biden said the U.S. in 2022 will start fixing more than 65,000 miles of highway and 1,500 bridges in disrepair following passage of the bipartisan $1.2 trillion Infrastructure Investment and Jobs Act in November.
"We'll build a national network of 500,000 electric vehicle charging stations, begin to replace poisonous lead pipes — so every child — and every American — has clean water to drink at home and at school, provide affordable high-speed internet for every American — rural, urban, suburban, and tribal communities," Mr. Biden said.
The president also told Congress that the U.S. should adopt a 15% minimum corporate tax rate. "Just last year, 55 of the Fortune 500 corporations earned $40 billion in profits and paid zero in federal income tax," he said. "Look, it's not fair."
Moreover, he told senators to advance his five nominees to the Federal Reserve board. The nominations are currently delayed in the Senate Banking Committee as committee Republicans did not show up to a scheduled vote last month, thereby denying a quorum.
Mr. Biden said the Fed plays a "critical role in fighting inflation," which is why the nominees need to be confirmed.
