After years of gridlock in Washington, American business is gearing up for a major push on long-sought goals such as an overhaul of the corporate tax system, building the Keystone XL oil pipeline, lighter environmental and financial regulation, and winning congressional backing for trade deals with Asia and Europe. Business interests face a much more receptive audience now that Republicans are poised to control both the House and Senate next year.
But despite plenty of public talk of more aggressive action — such as a rollback of the Affordable Care Act or the Dodd-Frank rules passed after the financial crisis — lobbyists, experts on Wall Street and political veterans say the actual legislative agenda will be much more limited.
“There is a pent-up demand for legislative action, and there was a logjam because of the campaign,” said Bill Miller, a veteran lobbyist and senior vice president at the Business Roundtable, which represents a wide cross section of the biggest American companies. “The three issues we’ve got teed up now are corporate tax reform, then immigration reform, as well as getting new trade agreements passed.”
Though many of the more conservative Republicans elected Tuesday made their opposition to the Affordable Care Act a touchstone of their campaigns, there is much less appetite on the part of business leaders for wholesale changes to the health care law.
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For one thing, many of the insurance exchanges are finally working well, and businesses have adapted to the new landscape. Even more important, added demand from the newly insured is likely to increase profits in sectors such as hospitals, pharmaceuticals and medical devices.
“Anything regarding the Affordable Care Act is going to be a stretch,” said John Lynch, regional chief investment officer for Wells Fargo Private Bank.
Still, after pouring hundreds of millions of dollars into what was the most expensive midterm campaign in history, corporate donors and individual executives are eager to see their agenda tackled by a party that has traditionally been much more sympathetic to big business.
“With the Republicans controlling both houses, the corporations that have been financing their campaigns for years are going to expect to see a return on their investment,” said Robert J. Shapiro, who was a top Commerce Department official in the Clinton administration and is now chairman of Sonecon, a Washington economic and security consulting firm.
He foresees a big push to lower the corporate tax rate while closing some loopholes so the package does not reduce overall revenue for the government. He also expects Congress to try to reverse, or at least slow down, the regulation of greenhouse gases by the Obama administration.
But an overhaul of immigration laws is a much tougher issue because there are deep divisions within the Republican Party on how to change the system, he said, with the conservative base at odds with the desire of business to make it easier for immigrants to establish legal status in the United States.
By contrast, there is more of a common denominator among Republicans on easing government supervision of business.
“Both the tea party types and the establishment wing of the Republican Party agree on wanting less regulation,” Shapiro said.
The Republican takeover of the Senate is likely to sharpen debate on energy issues and pressure President Barack Obama to finally decide whether to allow the Keystone XL pipeline to be built to connect Canadian oil sand fields with American refineries on the coast of the Gulf of Mexico.
The Republicans are also expected to try to curb Environmental Protection Agency plans to control greenhouse gas emissions by imposing strict new rules on coal-fired power plants.
Oil executives expressed exuberant satisfaction with the election results.
“The Republican-controlled Congress can start making the president make some decisions on energy matters — from the Keystone XL pipeline to lifting the ban on crude exports,” said James Noe, a senior vice president of Hercules Offshore, a drilling company that works in the shallow waters of the Gulf of Mexico.
“No longer will we have to guess exactly where the president stands on the energy issues that are important to the country — economy and national security. We will also see a check on the president’s aggressive regulatory and bureaucratic battle against the traditional energy industries.”
A Republican Congress would be likely to send a bill approving the construction of the Keystone XL pipeline to Obama’s desk with the support of at least a handful of Democrats from states with strong energy interests.
A Republican Senate victory also means that Sen. Lisa Murkowski of Alaska is the most probable choice to take over as chairwoman of the Energy Committee. She has been a strong supporter of pushing liquefied natural gas exports, and she can be expected to push for aggressive oversight of the Energy Department with the goal of winning approval for terminals to export the fuel to markets overseas.
Murkowski and other Republicans also oppose any new stringent rules governing hydraulic fracturing in shale oil and gas fields. They may also try to obstruct or weaken any Interior Department actions to use the Endangered Species Act to slow drilling and other energy development.