Next Administration Shows Signs It Will Seek Middle Ground With Business on Thorny Issues
By Elizabeth Williamson The Wall Street Journal
November 6, 2008
Washington -- The weak economy, congressional races that empowered moderates and President-elect Barack Obama's choice of business-friendly advisers suggest Democrats will go slow on controversial labor and regulatory issues.
A bill that would make it easier for unions to organize workers, efforts to regulate greenhouse-gas emissions, and a slew of contemplated taxes will likely take a back seat to broader economic issues for now, Democratic operatives say.
"This administration from what I'm seeing is going to be very mainstream, middle of the road on tax and business policies," said Scott Lilly, a senior fellow at the Center for American Progress Action Fund, a think tank close to the Obama transition. "I believe most businesses are going to find it pretty moderate...they're trying to convey that."
Later this month, Congress is expected to start crafting an economic-stimulus bill, which has the qualified support of the Bush administration, depending on what it includes. Beyond a likely extension of unemployment benefits and more rebate checks for Americans, the bill could include money to work through a backlog of state and local infrastructure projects, a potential boon for the construction industry.
Some Democrats say the bill could include incentives for alternative-energy initiatives. But anything more controversial -- such as a provision allowing bankruptcy judges to lower mortgage payments for homeowners -- likely won't be included.
That proposal and measures making it easier for people facing bankruptcy to gain protection from creditors are favored by many Democrats, including Mr. Obama. But such proposals could be difficult to pass in their current form without a protracted fight that could tarnish the new administration.
"At a time when we have real questions about the availability of credit, if you change the rules you are going to hurt the availability of credit," said Edward Yingling, president and chief executive of the American Bankers Association.
Though Democrats made significant gains in Congress, they fell short of the 60 votes needed to break a filibuster in the Senate. Several newly Democratic seats in the House -- including ones in Florida, Idaho, New Mexico and Alabama -- went to fiscal conservatives with pro-business agendas.
Several of Mr. Obama's top economic advisers -- including former Federal Reserve Chairman Paul Volcker, billionaire investor Warren Buffett and former Treasury Secretary Robert Rubin -- are moderates and reassuring figures to the business community.
Groups including the Nuclear Energy Institute and the U.S. Chamber of Commerce rushed to offer help to Mr. Obama Wednesday. At a news conference, the National Association of Manufacturers distributed a booklet titled "A Letter to President-elect Obama" pledging to work with Democrats on a host of business issues.
But National Association of Manufacturers President John Engler, the Republican former governor of Michigan, drew a line in the sand at any effort to implement the Employee Free Choice Act, which would make it easier to unionize workers. "This is not the time and this is certainly not the issue with which to build a relationship," he said.
Democrats hold little sympathy with the business lobby's stance on unions, promising a fight down the road. "If we go back to what we did for most of the last half of the 20th century and divide production growth between corporations and employees, everyone would be better off," Mr. Lilly said.
Mr. Engler said his group would fight any effort by an Obama Environmental Protection Agency to regulate as a pollutant carbon-dioxide emissions from power and other industries.
The Chamber of Commerce extended an olive branch to Mr. Obama Wednesday in a letter from President and CEO Thomas Donohue. "Any successful and sustainable recovery must involve the business community," he wrote. "The Chamber stands ready to work with you and your administration to spur a return to prosperity."
The Chamber earned the ire of Senate Democrats with an expensive nationwide effort to prevent Democrats from gaining the 60 seats they needed to fully control the Senate.
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