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Pro-business agenda expected in US

Waking to a new power configuration in Washington on Wednesday, 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. Among the goals they mentioned were expanded tax cuts and new energy-drilling rules for Alaska. An Aerial view of the Arctic National Wildlife Refuge in Alaska. PHOTO: NY TIMES

Waking to a new power configuration in Washington on Wednesday, 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, which 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 the House and the 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," 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 Corp and former chairman of the Business Roundtable, an elite group of the chief executives of large companies. Recalling that Senate voting rules require 60 votes to overcome a filibuster, he said, "Sixty votes is hard to get if it's a highly partisan issue."

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 corporate 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 Silver, associate general counsel at the AFL-CIO, referring to one such corporate-accountability law. "Attempts to roll it back would hit a wall."

But 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 US Chamber of Commerce, said that with a Republican replacing Senator Edward M. Kennedy, as chairman of the Senate health committee, business 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.

Rule blockers

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

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."

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 Democratic-led Senate had removed.

Energy drilling in Alaska

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. Shares of energy traders and marketers, most notably Calpine, rose sharply Wednesday on speculation that the industry would benefit now that Republicans control both houses of Congress.

But analysts cautioned that it is too soon to tell how much the energy industry will win. Some issues, like drilling for natural gas off the coast of Florida, or the repeal of sanctions against Libya and Iran, will probably make no progress, given their broad unpopularity. Electricity companies would also like to win the right of eminent domain, giving them the power to force property owners to sell their land for the construction of transmission lines, but that issue has long been resisted by environmentalists and conservative local politicians.

How much of the energy industry's agenda succeeds will depend in great part on who eventually leads crucial Senate committees like energy and environment, and the issues they choose to address. Roger Diwan, a managing director at the Petroleum Finance Co, a consulting group in Washington, also pointed out that the passage of certain energy measures would depend on the loyalty of liberal Republicans in the Northeast, who have historically voted against measures like oil drilling in the Arctic Refuge.

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

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

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

The White House has already said it will 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.
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