With the lame duck Congress now in session, the halls of Washington’s legislative offices are filling with cardboard boxes as defeated or retiring legislators pack to return to their home bases.
The question now is whose interests will predominate in the 114th Congress, whose members are scheduled to begin meeting in early January. Is it as simple as progressives would like to argue: that the Republican dominance means that corporate interests will triumph? Certainly, lobbyists for the National Association of Manufacturers think so. They reportedly traded high-fives inside their war room as news came through of the election results.
The Business Roundtable has already sent congressional leaders its list of priorities for the lame duck session, including funding the government and avoiding any additional fiscal showdowns; restoring expired tax provisions, like the credit for R&D; and updated trade promotion authority that would make it easier to pass trade deals.
Whether corporate interests will still be celebrating in two years or so will depend on how much progress lawmakers make in tackling those issues and the ones below:
1. Tax reform. Business leaders, for the most part, have long sought a simplified tax code and reduced overall corporate tax rate, preferably while being offered an incentive to repatriate some of the billions their companies have parked overseas. The Obama administration and Republicans have both proposed changes broadly along these lines, so finding common ground shouldn’t be out of the realm of possibility.
Many CEOS also wouldn’t mind keeping intact the tax system that imposes a lower tax burden on capital gains (in other words, on investment income) than it does on employment earnings. That tax policy has contributed to the current level of income inequality, and CEOs — and the corporations that they lead — likely will fight to keep it that way. That’s not to say that they should: To the extent that Americans have more money in their wallets at the end of the month, it’s going to be a net positive for consumer spending and thus for the economy and corporate bottom lines.
2. Free trade. The Obama Administration is in the midst of negotiating two free trade deals — one in Europe, the other in Asia — in spite of opposition on the part of Democrats. The benefits, from the point of view of ordinary Americans, might seem illusory: The North American Free Trade Agreement was accompanied by job losses, but whether those are a consequence of the free trade pact or a more complicated set of circumstances, including higher worker productivity, remains hotly contested.
In the case of the new free trade deals, however, it seems as if corporate interests would win out. “Buy American” laws would go by the wayside, for instance. Big business — and the Republicans — support the free trade initiatives, which could make for some very odd political bedfellows. Look for the GOP to give Obama fast-track negotiating authority to move the deals ahead.
3. Obamacare. Health care is the issue that just won’t die. Americans need affordable health care; employers are intent on passing as much of the cost as possible on to them. It’s already become clear that the battles over Obamacare, with the White House and Congressional Democrats on one side and big business-funded Republicans on the other, won’t just go away. The Supreme Court will have another say on the matter, too. But even if the GOP fails to overturn the law in one fell swoop, they’ll likely try to chip away at it, piece by piece.
4. The minimum wage. The White House wants to boost the minimum wage to $10.10 an hour; voters in Alaska, Arkansas, Nebraska and South Dakota last week voted for increases to state minimum wages, and those who went to the polls in Illinois backed a non-binding measure in support of higher wages. But Mitch McConnell, the new Senate Majority Leader, has put his foot down on this hot-button issue. He believes that a minimum wage hike will cost the country 500,000 jobs and that under a Republican majority, Congress wouldn’t waste its time “debating all these gosh darn proposals”. Case closed.
5. Immigration. President Obama has already said he intends to push forward with unilateral executive action that would give undocumented immigrants a path to citizenship, bypassing Congress if the GOP fails to move on a comprehensive immigration reform plan. Republicans are furious about that prospect.
Businesses, meanwhile, are frustrated. Groups like the U.S. Chamber of Commerce, the Business Roundtable, and the National Association of Manufacturers have called on Congress to fix the immigration system, while tech companies in particular have lobbied for reforms that would open the doors to workers with science, technology, engineering, and math backgrounds. Obama may take executive action, but politics is likely to get in the way of anything else.
6. The Keystone XL pipeline. The energy industry desperately wants this $5.4 billion, 1,660 mile project — which would transport crude oil from the so-called oil sands projects in Alberta to markets in the southeastern United States — to go ahead. Environmentalists have managed to stall it for years, arguing that it will contribute to greenhouse gases and that the risk to the environment, including the water aquifers along its route, is too great. Landowners also object, but pipeline supporters can be found on both sides of the political divide.
Louisiana Democrat Mary Landrieu, who now faces a runoff battle for her Senate seat in early December, is a staunch friend of the energy industry, and the need of the Democrats for one more Senator may outweigh the environmentalist outcry against the project. The buzz is that the lame duck Congress will forge ahead with a vote to approve the pipeline ahead of the runoff, in a bid to help her win votes. Look for the Keystone Pipeline project to be the first public example of the triumph of moneyed corporate interests, but probably not the last.
7. Net neutrality. Actually, this wasn’t a campaign issue at all, although it should have been, given that nearly 4 million Americans took the time and trouble to speak out strongly in favor of it.
Obama has already spoken his mind on the topic, but it’s still up to regulators to rule on the matter. If there’s a big enough howl of outrage at the outcome, the ball may still find itself back in the politicians’ court. That could prove interesting, given that corporate interests clearly are opposed to net neutrality.
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