Some in the business world shook their heads last January when House Ways and Means Chairman Charles Rangel (D-N.Y.) was offered a fundraiser by a leading pharmaceutical industry interest group. Such are the ramifications of the Democratic takeover of Congress last November. For those keeping score at home, there are a few pieces of pending business legislation worth watching.
Senate Democratic Leader Harry Reid (D-Nev.) certainly did little to comfort small and big business alike when, in a January 4 speech, he spoke of his first 10 resolutions, which included government interference into drug costs, increased regulation and taxation in the oil industry and a hike in the minimum wage. "The flaws in the Medicare drug program are well-documented, but many can be traced back to one simple fact: The law--as written--puts drug companies ahead of America's aged... [Bill} S. 2 is our plan to increase the wages of working families by raising the minimum wage to $7.25 an hour," the senator from Nevada continued.
House Speaker Nancy Pelosi terrified the oil industry late last year when she outlined her priorities for the new Democratic majorities in Congress. Within the first 100 hours, she promised, they would "roll back the multibillion-dollar subsidies for Big Oil."
However, when Pelosi (D-Calif.) won House approval of the much-touted bill socking it to the oil companies, it turned out to be considerably lacking in bite, relative to its bark. Out of an estimated $32 billion in subsidies and tax breaks that the oil companies are scheduled to receive over the next five years, the final House bill cut $5.5 billion.
In negotiations over the energy bill, a list of subsidies almost became an impasse. Democratic lawmakers had previously tried to eliminate these industry breaks--including several that the oil industry considered particularly important. One conferred favorable tax treatment on U.S. refineries that expanded and upgraded plants. Another allowed industry accounting methods that dramatically reduced taxes. A third included a tax credit that helped manufacturers compete with imports.
Charles Drevna, a top executive of the National Petrochemical & Refiners Association, communicated separately with Pelosi's staff opposing all three changes. The concerns were also represented separately by other lobbyists, and by other members of Congress. In the end, the industry was able to preserve the first two tax breaks, but lost the manufacturers' credit.
Steve Elmendorf, a lobbyist who was a top aide in Sen. John F. Kerry's 2004 presidential campaign, said: "The biggest change for the business community is that in dealing with Democrats, they are not the only people at the table. Labor unions, trial lawyers, consumer advocates are also part of the discussions. That wasn't true with the Republicans."
Those in the finance sectors and their representatives on Capitol Hill have been approaching the new Congress with trepidation, but early reports suggest access to a greater degree than at first feared. Surprising as it might seem in view of the Democrats' public rhetoric, business groups are getting their telephone calls returned. And they're getting plenty of face time with the new House and Senate leaders.
"There was a lot more anxiety initially because of not knowing what was going to transpire," says Stuart Roy, a member of the prominent Washington lobby shop DCI Group and once an aide to former Rep. Tom DeLay (R-Texas). "The anxiety level is down."
"The interesting issue here is that the whole issue of the minimum wage is barely relevant," explains Mike Flynn, from the Employment Policies Institute. "Only 2 percent of the workforce makes that wage, and after it goes up to the proposed $7.25, that number will only increase to 4 percent to 5 percent."
Among key legislation to expect after the first wave of Pelosi's 100 Hours and Reid's first 10 resolutions, one to watch will be the "Employee Free Choice Act." That bill would make it easier for unions to gain representation through an open process in which workers sign cards, in addition to secret ballot elections. The bill, which would require that unions be recognized if more than 50 percent of workers sign cards, would set tougher penalties for firms that violate labor laws and would call for expedited contract talks.
"The bill would allow more workers to bargain for their entry into the American middle class," says Stewart Acuff, AFL-CIO national organizing director.
Continues Acuff: "This bill is of the utmost importance to the AFL-CIO. It really is about restoring freedom to form unions." Opponents call the secret ballot more democratic. "Card checks are subject to union intimidation," says James Sherk, Bradley Fellow in Labor Policy at the Heritage Foundation, who can cite numerous examples of cards signed under duress. In fact, the United States Chamber of Commerce has endorsed the "Secret Ballot Protection Act," calling for secret ballots in elections to become unionized.
It's unclear what will happen to this and other proposals, even as we begin the countdown to the more significant election of 2008.
Robert Margolis is a New York-based writer and history teacher.