Something in this for everyone..

June 09, 2005

Washington more open to business than usual
Pending legislation reflects the most business-friendly climate in years.
By Gail Russell Chaddock | Staff writer of The Christian Science Monitor

WASHINGTON – US business groups are looking for another leap forward for their agenda from Capitol policymakers - in everything from new legislation to the appointment of conservative judges and shifts at key regulatory agencies.

In what could be the most business-friendly climate since the days of President McKinley, President Bush and the GOP-controlled Congress are moving to extend corporate tax breaks, pass pension reforms, allow oil drilling in the Arctic National Wildlife Refuge, and limit lawsuits - including a settlement of asbestos litigation that has driven 70 companies into bankruptcy.

Most encouraging to business lobbyists are prospects for a less visible agenda: a lighter hand on regulation well into the future. The resignation of William Donaldson as head of the Securities and Exchange Commission, effective June 30, sent a signal to Wall Street that the post-Enron crackdown on corporate accounting tricks may be winding down. His proposed replacement, Rep. Christopher Cox (R) of California, is expected to be open to business concerns.

"On balance, this is as good as it gets for business," says John Pitney, a political scientist at the Claremont McKenna College in Claremont, Calif.

Supporters say these changes can help fuel a new economic expansion by reducing burdens on America's job creators. Critics worry about impacts that could range from rising federal deficits to weaker protections for consumers, workers, and a fragile wilderness.

The pro-business momentum is accelerating, analysts say, in part because the steps are easier to take in the lower-publicity atmosphere of a nonelection year. Another factor: The finances of ordinary Americans have become increasingly linked to corporate fortunes.

"There's been a tremendous underlying shift that's really changed the behavior of both parties - stock ownership," Mr. Pitney says. "A majority of Americans now own stock either directly or through pension funds. If you look at the electorate, it's more than two-thirds. That's much higher than it was a couple of decades ago. Increasingly, people don't see a business agenda as separate from their own well being. They see it as part of their own."

Democrats are playing a role alongside Republicans. Senate minority leader Harry Reid meets biweekly with "Democratic-leaning" business lobbyists. He backed bankruptcy reform and allowed a vote on class-action lawsuit reform, even though he opposed the bill. Democrats are sponsoring legislation to extend government-backed insurance against terrorism, set to expire at the end of this year - a move the White House has yet to decide on. After 9/11, many businesses in major cities were unable to purchase insurance for losses that might occur from attacks.

A bipartisan deal, moreover, is allowing some of Bush's long-stalled judicial nominees could also be a boon to US corporations. Janice Rogers Brown, a conservative judge from California, is slated to serve on the appeals court representing the nation's capital, where most cases that affect government regulation are heard.

"So far, so good," says Bruce Josten, top lobbyist for the US Chamber of Commerce. Much of the remaining business agenda is "ripe" to move through this session of Congress, he says.

The pending highway bill is critical to businesses locked into a "just in time" delivery of goods by truck, he adds. Conferees are working this week on a compromise between the $295 billion Senate bill and the $284 billion House version - the highest the White House says it can support.

On energy, the last time the Senate debated a comprehensive bill, the measure was pulled out of committee by Tom Daschle (D), then the Senate majority leader, and later debated on the floor until it died. This year, the energy bill comes to the floor with a bipartisan endorsement from the Energy and Natural Resources committee - a big assist in getting agreement from the full Senate. Still, passage for the subsidy-packed bill is uncertain. For example, the truce over judicial nominees could break down, affecting other matters.

Early in Bush's second term, Congress passed a law sought by banks and credit-card firms that makes it harder for individuals to declare bankruptcy. Another new law shifts most class-action lawsuits from state to federal courts, a move aimed to reduce huge verdicts against firms.

"President Bush is clearly very business oriented," says Fred Greenstein, a political scientist at Princeton University. "The first big bills in the Bush second term, bankruptcy and tort reform, are tilted toward 'Let's keep jiggering the American legal system so that this is a great country to do business in.' "

Other presidents have cut taxes more sharply. But Bush has lowered taxes every year of the his presidency. Another $70 billion in tax cuts, extending dividend and capital-gains tax cuts, are on a procedural fast track in this year's budget cycle that protects them from a filibuster.

Consumer groups say there are costs to moving a pro-business agenda that may not be obvious.

"The Bush administration wants to deregulate business finances as well as health, safety, and environmental regulation," says Joan Claybrook, president of Public Citizen, a Washington-based public interest group. "The consequences aren't always felt immediately, but whether it's big trucks that aren't regulated adequately and have more crashes or it's unclean air, the consequences will be felt."

http://www.csmonitor.com/2005/0609/p01s02-uspo.html

So what do you think? Is this a wise path? Could it be the beginning of another Gilded Age, like the one that preceded the Great Depression? Are politicians at a point where the catering to corporate interests is out-of-hand?
We hear so often about the "balance" between business and the other interests such as the enviornment or safety/public health. Is there really a problem with the balance we've been having?

First of all.....I don't see post-Enron crackdown on corporate accounting tricks winding down. Ever heard of Sarbanes-Oxley that came as a result of Enron? It's the new legislation that requires companies to spend thousands.....in many case millions.......to comply. It requires each CEO and CFO to actually "sign off" on the financial statements.....meaning that their name now goes down as being personally responsible for what their companies are claimig about their financial picture. Making them far more likely to pay attention to what's going on....and less likely to "cheat." Many companies are hurting over trying to comply.....especially the smaller companies.

Don't get me wrong....there's a lot of good things in Sarbanes-Oxley. Probably some 80% of it is good. Namely what I mentioned above is a good thing. The fact that now it is the Audit Committees that choose and hire the Accounting firms......not the company officers....is another good thing about Sarbanes-Oxley. This piece of legislation that grew from the Enron, WorldCom, and other corporate scandals has been a boon to accountants and accounting firms. I just read the other day that graduating accountants are in huge demand. Their starting salaries are over $45,000.....and many are getting multiple offers. All because of Sarbanes-Oxley....which was a result of the corporate scandals.

What do you have against Washington being business friendly? We are a capitalist society. Businesses provide jobs where people can make a living. Business makes our economy thrive. Yes, there should be a balance between our environmental concerns and business. I don't know of anyone who doesn't want clean air, clean water, and a clean environment. But we actually do a pretty darned good job with that balance.

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"What exactly is this foreign policy experience?" Obama said mockingly of the New York senator. "Was she negotiating treaties? Was she handling crises? The answer is no."

I support lessening regulations when possible. I managed movie theaters while in college and I spent a lot of time, money, and effort complying with absurd regulations at the federal and state level.

What I don't support is any lessening of regulations that protect the health and safety of the public.

Tax breaks are fine also. But we need to cut spending at the same time or we are harming the economic well-being of our country.

The last time I checked, business taxes accounted for only 5.5% of total tax income. I am not an accountant, but I think we should look into the consequences of exempting business from paying income taxes in the hope that businesses that have set up "maildrops" and businesses that have left for lower tax climates would come back (or come for the first time) and set up shop in the most stable business environment in the world. If we could increase jobs by exempting them from income tax, that might be interesting.

As a CPA, JP5 might be able to give an opinion of whether this is insane.

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"George W. Bush surrounds himself with smart people the way a hole surrounds itself with a donut." —Dennis Miller

Right, it seems like the crack-down was fair. Something had to be done after all the scandals. But it seems strange to me that no one from Enron is in jail while Martha Stewart of all people was promptly sent off.

Of course government should promote business, though it seems like they actually stifle true free-market enterprise with corporate welfare (subsidies). We have to beware the marriage of government and business. It is not a good thing for corporate interests to trump everything else. Sure, there are many laws and regulations that probably deserve streamlining, but there's a difference between wise reform and all-out giveaways to industry. Look what happened in the 1920's -- regulations were virtually discarded, which brought a temporary period of prosperity but ultimately led to the Great Depression.
All I'm saying is Washington should be careful about going too far.

With respect to the environment, we have already seen the dismantling of so much that has been accomplished over the past thirty years. Bush and the Republican leadership have their sights set on what remains.

About tax cuts for business, I came to see their benefit after some lengthy discussions elsewhere. But the amount of tax cuts we have seen, is it reasonable during a time of war and huge deficits?
And yes, I'm sure there are absurd regulations that can be done away with.

I can't disagree with much of what you said, although I don't think cutting taxes on business would create that many jobs. I think if we do away with taxing income on business that never touches US soil that will make us competitive and on par with the rest of the world.

Caracarn, I think the CFO of Enron (Fastow) has been convicted and is awaiting sentencing? In any event, there are other trials coming up as well. The problem is proof, just because Lay was the CEO doesn't mean he knew about it. It's reasonable that he should have, but reasonable isn't good enough to convict in front of a jury.

I'll add, there is a one time exemption for US companies that ends 2005 and allows them to repatriate foreign earnings without paying US tax on those earnings. Most of those deals are just getting done now (and through the end of the year). While it won't impact 2005 much, I believe the additional capital will provide a boost for 2006. It will provide more capital for companies to invest with.

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All you need to know about the energy crisis:
ANWR Exploration Republicans: 91% Supported. Democrats: 86% Opposed.
Coal-to-liquid R's: 90% YES. D's: 78% NO.
Oil Shale Exploration R's: 90% YES. D's: 86% NO.
Outer Continental Shelf Exploration R's: 81% YES. D's: 83% NO.
Increased Refinery Capacity R's: 97% YES. D's: 96% NO

SUMMARY: 91% of House Republicans have historically voted to increase the production of America’s own oil and gas. 86% of House Democrats have historically voted against.

The one thing that people don't often realize is that businesses really don't pay taxes. Only people do. Taxes are merely part of the costs of producing a product or service and as such are passed on to us. Wal Mart's taxes go up, their prices to you go up. So in reality it makes little difference what we tax corporations: We are paying anyway!

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I wasn't born with enough middle fingers.

I'm all for cutting taxes combined with cutting spending. I also agree with you that it's all about jobs; creating them and keeping them. If we make the cost of doing business so high because of taxes, then those businesses cannot compete. This is especailly true of small business where people are sole proprietors and pay taxes at the individual rates. They pay 15% in self-employment taxes PLUS their individual rate on their net income. That's way too much, IMHO.

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"What exactly is this foreign policy experience?" Obama said mockingly of the New York senator. "Was she negotiating treaties? Was she handling crises? The answer is no."

Fastow's wife just got out of jail the other day.....and now he goes in. The judge in their sentencing allowed them to serve at different times because of their children.

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"What exactly is this foreign policy experience?" Obama said mockingly of the New York senator. "Was she negotiating treaties? Was she handling crises? The answer is no."