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Businesses brace for the Democratic agenda
 
By Steve Jagler RSS Feed
Special to OnMilwaukee.com

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What is a blog?  For us it is a short blurb that we write when the mood strikes us.  It can be first person, funny or informative. In short, a blog is whatever we want it to be. Published Jan. 18, 2007 at 8:59 a.m.
Tags: 911, abramoff, business, democrats

Most business executives I know lean to the right in their politics, and many of them begrudgingly held their noses and voted to re-elect President George W. Bush in 2004.

After all, the two-party system has not exactly produced the best candidates in recent years. It's often a case of voting for the lesser of two evils.

But now, as the surge in Iraq pushes the Bush presidency into arguably the worst in American history, there is a political price to be paid. And businesses will get caught up in the shifting political landscape.

As Bush lost the support of the American people for his war in Iraq, the Democrats gained control of Congress, and with that control came an agenda of six bills the donkeys are introducing in their first 100 hours on the floor:

  1. "Real" ethics reform
  2. Making America more secure by implementing the bipartisan 9/11 Commission recommendations
  3. Increasing the minimum wage
  4. Making college more affordable by cutting interest rates on student loans
  5. Allowing the Medicare program to negotiate for lower prescription drug prices
  6. Starting America on the path to energy independence.

The problem, from the Republican point of view, is that the American people widely support those six objectives, even if many of the initiatives could take a toll on businesses, according to a recent poll by the Associated Press and AOL.

How will the Democrats' six-point agenda, if approved, affect businesses? Let's take them one by one.

1. The impact of ethics reform will depend upon the size of your company. If you are a large multi-national corporation, replete with a political action committee, you don't like the sounds of this one. Many of you have liked the days when the likes of K Street wizards such as Jack Abramoff could work his magic and oil companies could write federal energy bills. If you are a smaller company, maybe you like the notion that the playing field could be more even, and the bigger boys might no longer get all the spoils. Or the tax cuts. However, the Senate put this bill on hold Wednesday with a poison pill amendment allowing for a presidential line-item veto. If there is one thing the Democrats don't want, it is to give this president even more power than he has usurped.

2. The 911 Commission's recommendations include a double-edged sword for businesses. One of the provisions calls for all air cargo entering the nation to be screened within the next three years and all shipped cargo to be screened in about four years. These screenings would no doubt add to the costs of shipping freight into the country. However, a case could be made that such a mandate would provide more protection from terrorists and would provide business opportunities for cargo inspection companies and the like.

3. A boost to the $5.15 federal hourly minimum wage would be the first since 1997. Democrats are proposing to raise it to $7.25 an hour. If you're paying your people minimum wage … Well, get ready to suck it up. This one has the approval of 80 percent of the American people in the AP poll, and it's going to fly.

4. The College Student Relief Act would reduce federal lender subsidies and redirect those funds to cut the interest rate on subsidized student loans for first-time borrowers from 6.8 to 3.4 percent over the next five years. The Republicans are not likely to embrace this bill, which is roundly opposed by the financial services industry. However, it will be interesting to see if GOP legislators will be willing to stand before the American people and express their opposition to cutting the costs for middle class students to attend college. Bush tried to give his party some political cover by saying that the feds instead should increase funding for Pell Grants, which target poor people. However, Congresswoman Gwen Moore (D-Wis.) quickly shot through that cover. "President Bush has said he will veto this bill because he thinks we should be increasing Pell Grants. I agree wholeheartedly that we should increase Pell Grants, but this is not an either-or scenario. We don't need to pit the middle class and the poor against each other-we should make educational opportunity available for ALL students," Moore said.

5. Once again, are the Republicans going to stand up and say that the Medicare program shouldn't be able to negotiate for lower prescription drug costs for cash-strapped American senior citizens? According to the AP poll, 69 percent of Americans favor the government taking steps to make it easier for people to buy prescription drugs from other countries, where medicines are significantly cheaper. The pharmaceutical industry's lobbyists are working overtime to stop this one, and Bush has stood right alongside them in the past.

6. Starting America on the path to energy independence. Of course, if you're one of the world's largest oil companies, you're not going to lift a finger to promote use of alternative fuels or technologies. And local conservative talk show hosts have tried to brand ethanol in the same evil tones they branded light rail, even though Bush is a strong ethanol proponent, and the ethanol business is booming in Wisconsin. Actually, many businesses stand to benefit from alternative fuels and technological advancements, including Wisconsin companies such as Modine Manufacturing Co. in Racine and Johnson Controls Inc. in Glendale.

After six years of consolidated power in which a Republican president operated without a check or a balance from a Republican-controlled Congress and Supreme Court, the pendulum is swinging the other way.

And some will pay the price.



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Steve Jagler is the executive editor of Small Business Times. He can be reached at steve.jagler@biztimes.com.

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