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G.O.P. Victory Sets Stage for Pro-Business Agenda
Published on Thursday, November 7, 2002 by the New York Times
G.O.P. Victory Sets Stage for Pro-Business Agenda
by Mary Williams Walsh
 

Waking to a new power configuration in Washington yesterday, business leaders began to revise their wish lists for action on contentious issues like taxes, health care costs, personal-injury lawsuits and the ability of government employees to strike.

"This historic election sets the stage for aggressive action" on a pro-business agenda, said Jerry Jasinowski, president of the National Association of Manufacturers. He listed the association's top goals as expanded tax cuts, a new law governing terrorism insurance, a prescription drug policy for the elderly and a resolution of asbestos-related lawsuits that have hurt the stock prices of manufacturers and prompted numerous companies to seek protection in bankruptcy court.

Other business leaders and executives, when asked what they most hoped the new Republican majorities in both House and Senate would be able to accomplish for American business, cited the swift passage of terrorism insurance rules, a lessening of environmental regulations and a bankruptcy law that will make it more difficult for people to escape their debts.

Many also foresaw a more receptive climate for new limits on medical malpractice lawsuits and punitive damages awards. Lester Brickman, a professor at the Benjamin N. Cardozo Law School, recalled that President Bush gained popularity in Texas as "a direct outcome of the largely successful tort reform efforts," and would be emboldened by the Republican victories.

"I expect he will now elevate tort reform to a more forward position in his domestic political agenda," Professor Brickman said.

Perhaps so as not to jinx things, or perhaps so as not to appear to be gloating at the successes of the party that has traditionally represented business interests, most of the executives and business leaders interviewed stressed that the Republicans' majorities are slender. Even now, they said, they were not sure American business would achieve its most important goals.

"We're still going to have a very divided government," said John W. Snow, chief executive of the CSX Corporation and former chairman of the Business Roundtable, an elite group of the chief executives of large companies.

Business leaders and their opponents in Washington agreed that if the Republicans overreach in their zeal to advance a pro-business agenda, they risk a strong protest. Public sentiment is still running high for shareholders and low for executives, they pointed out. That made some think there would not be any effort to rein in shareholder lawsuits, even though many corporate executives complain about them.

Nor are there widespread expectations of a rollback in recent legislation to hold executives and directors more accountable.

"I think that some people in business would like to weaken the Sarbanes-Oxley bill, but that is not going to happen," said Damon Silvers, associate general counsel at the A.F.L.-C.I.O., referring to one such corporate-accountability law. "Attempts to roll it back would hit a wall."

Despite their reservations, business leaders saw an advantage in having Republicans controlling Congressional committees, and therefore the legislative agenda.

R. Bruce Josten, executive vice president of the United States Chamber of Commerce, said that with a Republican replacing Senator Edward M. Kennedy, Democrat of Massachusetts, as chairman of the Senate labor and human resources committee, managers might now hope for new wage-and-hour laws, legislation promoting the use of arbitration instead of lawsuits, and an end to new rules governing retirement benefits.

"I think they'll still be introduced, but now we'll be better positioned to block them," he said.

Mr. Snow said he thought the greatest boon to business would be the Bush administration's ability to name federal judges and regulatory officials without an extended fight in the Senate. "I'm a Republican," he said. "I'm glad the Senate is in the hands of the Republicans. I feel more comfortable with that.

"But the country's still divided on health care, on education, on policies for the elderly," he added. "There are still major fights, and the underlying political divisions in the country are still not resolved."

Energy: Drilling in Alaska and Limiting Rules

With a Republican-dominated Congress and administration, the energy industry has its best opportunity in more than a decade to push through big initiatives, including opening the Arctic National Wildlife Refuge in Alaska to drilling and reducing other environmental regulations, industry analysts said.

"This doesn't mean they will get what they want," said Lawrence J. Goldstein, president of the Petroleum Industry Research Foundation, "but the odds have improved dramatically."

Before the election, the comprehensive energy legislation was stalled in talks between the House and the Senate. Now, Republican lawmakers could revive it and add provisions that the Democrat-led Senate had removed.

The industry, for example, is seeking more generous subsidies and tax breaks for building a pipeline that would transport natural gas from the North Slope of Alaska to the lower 48 states.

Utilities and energy traders and marketers have been calling for the repeal of a Depression-era law limiting the consolidation of the electricity industry; their chances of success have increased markedly with the Republican victory, industry representatives said.

But many analysts cautioned that it was too soon to tell how much the energy industry would win.
NEELA BANERJEE

Insurance: Quick Passage of Terrorism Bill

Insurance executives said Republican control of the Senate offered a better chance to gain the government-backed terrorism-insurance program they have been calling for since the attacks on the World Trade Center and the Pentagon.

If such a program were created, the government would pay most claims for damages suffered in a big terrorist attack.

The House and Senate had reached a tentative agreement on such a program before Tuesday's election. But it stalled when Democrats refused to yield to Republican pressure to limit the ability of victims of terrorism to sue businesses for negligence.

The Democratic lawmakers had argued that if businesses knew that they could be held liable they would be more vigilant about security. Republican legislators had countered that terrorist attacks are beyond the control of business, and therefore businesses should not be held accountable for them.

Michael McGavick, chief executive of the Safeco Corporation, a large Seattle-based insurer of homes, cars and small businesses, said he thought the program might be enacted by the present Congress, which reconvenes next Tuesday.

"I don't think there is any reason for either side to want to get to the next Congress to debate the terrorism issue again," he said. "So I'm cautiously optimistic that we'll get a terrorism bill enacted before the end of the year.
JOSEPH B. TREASTER

Health Care: Bolstering Medicare; Avoiding Lawsuits

Raising Medicare payments, discouraging medical malpractice lawsuits and avoiding caps on drug prices are some of the issues that hospitals, doctors and pharmaceutical companies said they would press for now that Republicans control both houses of Congress.

Officials said they would seek quick additions to Medicare payments, which are now scheduled to be reduced on Jan. 1.

Industry representatives also said that legislation limiting jury awards in medical malpractice and other professional liability lawsuits now seemed more likely.

"The House passed tort reform in September," said Richard J. Pollack, executive vice president of the American Hospital Association. "A Republican-controlled Senate will be much more open to dealing with the issue."

Such legislation is "a hot priority," both for the industry and for President Bush, said Charles N. Kahn III, president of the Federation of American Hospitals, a for-profit group. During the election campaign he had attacked "junk lawsuits."

Lobbyists for the drug industry said the new makeup of the Senate would make it easier to kill bills that the brand-name drug companies oppose, including measures that would have encouraged elderly Americans to order drugs from foreign countries or helped generic drug makers move their products to market more quickly.

Brand-name drug companies spent heavily to help elect sympathetic Republican senators in Missouri and Minnesota. Senator Judd Gregg in New Hampshire is the likely successor to Senator Kennedy as chairman of the crucial health committee.

"Senator Gregg was a stalwart" on heated issues involving pharmaceutical prices, said Ira S. Loss, a health care analyst at Washington Analysis, a group that advises institutional investors.

Managed care insurers said they hope to persuade Congress to forbid states to require health maintenance organizations to offer certain types of care, like acupuncture and podiatry.

One issue the health maintenance organizations can now stop worrying about is a strong right for patients to sue them.
MILT FREUDENHEIM

Banking: Reviving a Bill on Bankruptcy

The banking industry has been lobbying for years for an overhaul of the bankruptcy code that would make it harder for borrowers to escape their credit card bills and other debts.

Such a bill was approved in a House-Senate conference committee in July, but its progress was bogged down by a provision, added by Democratic Senator Charles E. Schumer of New York, that would limit the ability of protesters to escape court fines through the bankruptcy laws.

Anti-abortion groups, fearing the provision would hurt their cause, began to protest the bankruptcy bill. Republican lawmakers, wary of alienating an important voting block before an election, held back from further action.

Edward L. Yingling, executive vice president and head of government relations for the American Bankers Association, said he thought the Republican takeover of the Senate increased the odds that the bill would be brought to a vote early next year.

"There's a strong feeling that once the issue is explained to pro-life groups, it will go away," he said.

But another banking lobbyist said that since anti-abortion groups had helped the Republican Party gain control of the Senate, Republicans might now feel they owed it to these conservatives to press for changes in the bill.

"Do they really want to thumb their noses at these people by passing legislation they oppose?" the lobbyist asked.
RIVA ATLAS

Communications: Less Antagonism With McCain's Entry

For the telecommunications industry, the crucial change in the Senate is that Senator John McCain, the Arizona Republican, will replace Senator Ernest F. Hollings, the South Carolina Democrat, as chairman of the Senate Commerce Committee.

Not only does the commerce committee oversee the Federal Communications Commission, but it is also where most telecommunications legislation originates in the Senate.

For the Bell companies, which dominate local markets for voice and data communications, Mr. Hollings has been their chief antagonist on Capitol Hill for at least a decade, skeptical that the companies are truly open to competition. Mr. McCain, by contrast, has appeared to broadly embrace deregulation.

Mr. McCain has also been perhaps the biggest Congressional advocate of Michael K. Powell, the F.C.C. chairman.

Mr. Powell, a Republican, appears set to embark on a series of important deregulation measures that the Bells' competitors say will make it more difficult to break into local communications markets.

But Mr. McCain is also known as a maverick. And the Bells' opponents in the long-distance industry, led by AT&T, hope he can be persuaded to support some regulations on their behalf.

"McCain is certainly more deregulatory in nature than Hollings, but he has also been very supportive of competition," Peter G. Jacoby, vice president for Congressional relations at AT&T, said in an interview yesterday. "He also has a very strong pro-consumer bent."

The Republican shift in the Senate means the media industry can expect the F.C.C. to more freely pursue deregulation.

In step with some recent federal court decisions, the F.C.C. and Mr. Powell have been developing revisions to media ownership rules that would free big corporations to own more media outlets and a broader array of them than has been allowed in the past. And now, Mr. Powell will probably face less Congressional opposition to such plans.
SETH SCHIESEL

Automobiles: An Even Stronger Tie to Washington

Detroit had considerable influence in Washington even before the election, and that will only become stronger now. Andrew H. Card Jr., the president's chief of staff, served as General Motors' top lobbyist in the 1990's, for example, and carmakers have a bipartisan coalition of Congressional allies made up of Republicans and Midwestern Democrats in auto-manufacturing states.

With Democrats like John D. Dingell, a Michigan Democrat and the longest serving member of the House, leading the charge, the auto industry had little trouble winning legislative battles even before Republicans gained control of the Senate.

The biggest recent victory came last March, when Congress killed a proposal to increase fuel-economy standards, which had not been significantly raised since the 1980's. Meanwhile, the popularity of sport utility vehicles has pushed the gas consumption of the average automobile to a 20-year high, making the issue hugely important to environmental groups like the Sierra Club.

Still on the table as part of the energy bill are tax credits for consumers who buy vehicles that use fuel-efficient technologies like hybrid gas-electric engines. Carmakers want credits worth up to $4,000 for all types of vehicles that use such technologies. Some Democrats objected to offering credits to owners of pickup trucks and S.U.V.'s, saying that it is counterproductive to give an incentive to buy vehicles that guzzle gas, even if they do use the newer technologies.

Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, said the group would "stay on the course" toward the full range of tax incentives.
DANNY HAKIM

Taxes: Additional Cuts to Revive Growth

Several business groups said their biggest concern was getting tax cuts that stimulate economic growth, while holding down government spending to avoid structural budget deficits that would persist even after the economy recovers.

"We are most interested in a stimulus package," said R. Bruce Josten of the United States Chamber of Commerce.

He called for increasing the amount that businesses can write off immediately for investments in capital equipment, to $50,000 from the current $22,500.

The White House has already said it would seek to make permanent the tax cuts that Congress adopted last year; they are now scheduled to end in 2011. A revision of the estate tax, more breaks for retirement savings plans, greater deductibility for investment losses and other tax issues also are on the president's agenda, and they will receive a warmer reception in a Senate controlled by the Republicans.
DAVID CAY JOHNSTON

Copyright The New York Times Company

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