Big business might not get what it paid for in election

McClatchy NewspapersNovember 3, 2010 

WASHINGTON — Business groups spent record amounts during this year's congressional elections, in support of mostly Republican candidates. Now, these groups hope their investment pays off on everything from lower corporate taxes to a resumption of free-trade agreements.

"The results augur well," said John Engler, the president of the influential National Association of Manufacturers. Engler is a former Republican governor of Michigan who could barely contain his glee Wednesday in a conference call with reporters.

Among his expectations were that GOP gains will ensure that all of the Bush era tax cuts set to expire this year will be extended, and that large-scale efforts to force businesses to reduce carbon emissions or to allow unions an easier route to organizing won't see the light of day.

"Whether it's tax law, environmental policy (or) labor policy, keeping everything up in the air does not trigger confidence," he said.

Manufacturers accuse the Obama administration of trying to circumvent Congress by having the Environmental Protection Agency write regulations to curb carbon dioxide emissions that contribute to global warming. Engler expects a GOP-controlled House of Representatives "to be more aggressive in asserting that congressional prerogative make the policy in this area."

However, President Barack Obama Wednesday refused to rule out using the EPA to regulate carbon emissions.

The most active group in the last campaign was the U.S. Chamber of Commerce, which has been openly hostile to the Obama administration.

"Voters have resoundingly rejected more government spending, higher taxes, and more burdensome regulations that have caused crippling uncertainty for businesses. We agree with voters across the nation who clearly stated that a strong and vibrant private sector is critical to reviving our economy, creating jobs, and putting us on a path to long-term growth," Chamber President Thomas J. Donohue said in a statement.

What Donohue didn't say is that businesses already are sitting on an estimated $2 trillion in cash, unwilling to invest or hire because they doubt the demand is there with the unemployment rate seemingly anchored near 10 percent.

The question one day after the GOP gains is whether the heavy spending by business will translate into direct results on most of their agenda.

"Probably not — it often happens that way," said Norman Ornstein, a veteran Congress watcher and resident scholar at the American Enterprise Institute, a center-right policy research group.

With voters angry at the status quo in Washington and the tea party movement threatening to oust moderate Republicans, there's likely to be a greater focus on cutting spending and reducing the deficit than on broad policy changes sought by business, he said.

"I think it's really important to remember that a lot of the Tea Party advocates who were elected . . . are not going to be particularly warm toward big business," said Ornstein, adding, "A lot of these companies are pulling in money hand over fist. It will be interesting to see if they get what they have paid for."

Tuesday's results yielded a divided Congress, with Republicans controlling the House and Democrats controlling the Senate. That could result in more gridlock and strife between the chambers, or it could smooth the path toward cooperation. Either scenario may ultimately depend on how Obama interprets the results and how they affect his re-election chances.

"His liberal base is mad. He's clearly lost the independents, and you can't get re-elected without them. And he still has big problems with the business community — three crucial blocs that he needs to make repairs with," said Bruce Josten, who oversees the chamber's legislative policy.

Tuesday's results do bode well for eventual passage of free-trade agreements already negotiated with South Korea and Colombia but stalled by a White House taking a "time-out" on trade.

Opposition to free-trade deals always has been strongest among House Democrats, but they'll no longer set the agenda.

Likely House Speaker John Boehner, R-Ohio, and Obama have both mentioned a desire to move the Korea trade pact. The expected incoming chairman of the House Ways and Means Committee, Michigan's Dave Camp, is a big trade supporter, as are the likely chairman of the trade subcommittee, Texas' Kevin Brady, and the ranking Republican on the Rules Committee, David Dreier of California.

"You'd be hard pressed to find four members with a stronger pro-trade voting record than those four. So you have a House leadership that is strongly pro-trade. You have an election largely fought on domestic issues," said Scott Miller, director of global trade policy for Procter & Gamble and an industry adviser to the National Foreign Trade Council, a free-trade advocacy group.

The two sticking points to a Korea deal are greater access for U.S. auto and beef exports. Camp's potential rise at Ways and Means ensures this issue must get addressed, and his counterpart in the Senate, Montana Democrat Max Baucus, comes from a big cattle state.

"I think trade is an opportunity, but they have to get through Korea before they do Colombia and Panama," said the chamber's Josten.

The chamber also sees possibilities for bipartisan passage of legislation that requires utilities to generate at least 15 percent of their power from renewable resources. The missing ingredient during Democratic control was nuclear power, which if included as a renewable resource would gain the GOP votes to get passage, Josten said.

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