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Why President Obama is Suddenly Friendlier to Business

Originally published: 04.01.11 by Charlie McCrudden

As everyone on Capitol Hill focuses on 2012, businesses wonder — will anything meaningful get done this year or next? 
 

We are seeing a big change on Capitol Hill from the 112th Congress. That's not much of a surprise since the Republicans took over the House and hold more seats in the Senate. Gone is the aggressive pace that Democrats set to push through their agenda by any means possible when they controlled the House, Senate, and White House.

As I wrote in my last column, the new landscape assures gridlock, which changes the dynamic and the agenda. In the "new" Washington, politics trumps policy. This explains why President Obama is moving toward the political center while House and Senate Republicans are forcing votes on measures that have no chance at passing. There is a method to this madness, and it all has to do with the November 2012 election.

Republicans have a stronghold on the House of Representatives with the largest majority seen by either party in many decades. And while the Democrats' slim majority in the Senate means they control the floor and the ability to schedule votes, the arcane and complicated rules in the Senate grant the Republican minority the power to block debate on any measure.

The resulting gridlock means no major bills will be passed in the short term; instead, expect to see votes on issues with longer-term political gain.

For example, in February the House passed a bill to repeal last year's healthcare reform law, but the same legislation failed to gain the necessary traction for passage in the Senate. Even if the health- care repeal bill had passed in the Senate, President Obama vowed to use his veto pen to stop the legislation.

Why did Republicans bring a bill to the floor knowing it was going to fail? Because many Republican candidates ran on a platform of repealing the healthcare reform law, and they want their supporters back home to know what they've done. The practical reality is Republicans need to build a voting re- cord on which to run in 2012.

President Obama has circled Nov. 6, 2012, on his calendar, too, and knows it's never too early to start preparing. You may have noticed the White House recently initiated a campaign to reach out to the business community.

So far everyone is skeptical. Over the last two years, the Obama Administration — which includes the political appointees at the various regulatory agencies — has been tone-deaf to the needs and concerns of the business community. Veteran insiders who've been in Washington for years have said this is one of the most difficult administrations to work with.

The change of tune started just after the fall election with Obama championing repeal of 1099 form filing requirement enacted as part of last year's healthcare reform bill. A 23-line pro- vision tucked away on page 906 of the law has the potential to crush millions of small businesses under a mountain of paperwork. Starting in 2012, all businesses will have to file a 1099 tax form to the IRS for all vendors to whom they pay $600 or more for goods or merchandise in a year. ACCA was one of the first associations to recognize that the costs and burdens of compliance — from collecting the required names, addresses, and tax- payer ID numbers from all vendors to filing the forms with the IRS — would pose a serious hardship on most small businesses. Repealing this provision is a priority for ACCA.

Then in January, Obama issued an executive order directing a federal agency-wide review of regulations that are ripe for modification, streamlining, or repeal as a way to reduce the burden of government on businesses. He even used the business-friendly Wall Street Journal's op-ed page to announce the executive order, saying the regulatory process has resulted in rules that have "gotten out of balance, placing unreasonable burdens on business — burdens that have stifled innovation and have had a chilling effect on growth and jobs."

A day later, Obama's Occupational Safety and Health Administration withdrew a proposed workplace safety requirement that employers with loud environments provide their employees costly personal protection devices against noise. Employers had long argued that the rule was overly complex and expensive.

What's helping spur this new sympathy for the business community is a lot of scrutiny from House Republicans who are eager to use the next two years to hold countless hearings on the Obama White House. And why not? Republicans know they can't overcome a presidential veto, so they might as well use the power they do have to promote their agenda.

It's still too soon to tell if Obama's outreach to the business community will help him in 2012. We've seen this type of move before. President Clinton famously moved to the center after the 1994 election resulted in huge Democratic losses. Clinton also ordered a review of federal rules and regulations, but it resulted in little change.

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Articles by Charlie McCrudden