Participants: John R. Brandt, Editor-In-Chief, IndustryWeek; Jerry Jasinowski, President, National Assoc. of Manufacturers; Barry Rogstad, President, American Business Conference; Tom Donohue, President and CEO, U.S. Chamber of Commerce; Jack Faris, President, National Federation of Independent Businesses Topics: Mid-Term Elections | Environmental Issues | Congressional Partisanship | Taxes | Trade | Tax Reform | Small Business vs. Large Business | Education | Economy | Social Security
BRANDT: Well, I'm John Brandt. I'm editor and chief of IndustryWeek magazine. Bill Miller, I think everyone knows, John McClenahen as well. We're delighted that everyone has been able to join us today. We want to have a lively discussion. We're going to get started here. Welcome everyone. This is going to be published in the January 4th edition of IndustryWeek, so before the new Congress convenes. We really want to have a very lively discussion. Everything today will be on the record. And with that I would like to kick it off. And why don't we just start with our participants? Maybe talking about your take on the election and the implications for business of the reduced Republican majority in the next Congress. JASINOWSKI: On the election, let me just start by saying I think the fact that we have now only an 11-seat margin on the Republican side means that it is going to be much more difficult to move anything through the Congress and that the business community is going to have to show aggressive leadership on an agenda. A pro-active agenda, in order to get anything much done. I think that needs to focus on the growth, cutting taxes and improving trade and so forth. And know many of my colleagues support the same kind of agenda. And I think the more aggressive we can be early on, the more we can define, in terms of the debate, in a way in which we can get a couple of things done. BRANDT: Thanks, Jerry. Barry? ROGSTAD:: What I think the election means for business is that the road to has started. I think that the -- in contrast to the discussions we had two years ago when all of us were very positive about being able to advance elements of our collective agenda and some real probability of getting something done. I think the challenge in the next two years is to see if, in fact, you can't elevate the discussions so that you can get the sets of issues that we are all interested in on that discussion that surrounds the presidential debate. I would agree with Jerry. We better darn well be vigilant for opportunities that hopefully will arise in the interim. But I think that the real target here is to get the agenda and the topics right around the presidential election so that as we move beyond that, we have got a real possibility of moving the ball forward significantly. BRANDT: Jack? FARIS: The results of the election indicate that the founding fathers would be very pleased with what is going to happen in the 106th Congress. And that is pretty much of a gridlock. Donald Phillip's book, The Founding Fathers On Leadership recommend, because part of what they talk about is they didn't want another king. But they also didn't want any element in the states to control. And they sure didn't want a strong federal government. So as one looks through what the founding fathers wrote, they said we want to make it very difficult to pass new laws. And very difficult, very difficult to change the constitution. So I think what we are going to see has been said. In the 106th Congress, there will be no great advances in any direction because the votes aren't there to advance any great direction. The word simply won't be there. It will be complex. There is no way anything simple will happen. Now the closer the margins, the more complex the legislation. So much given and take. The last point for us is that the elections, for us, were really kind of a wake-up call for small business because, although we got very involved in some areas, we didn't get involved in a lot of these elections. A lot of our members are very frustrated. The fact that they didn't see that there was anything really moving much to their benefit. And so they spent most of election day looking to hire new people that could read, write and show up on Monday morning. And less concern. I think there will be a lot more concern now. And my hope is it will be a wake-up call. BRANDT: Tom? DONOHUE:: Well, first of all, what did we see in the elections? We saw the lowest turn out ever. On the other hand, we saw, I guess, a dozen states that had an increase in turn out. And "The Body" Ventura (Minnesota governor Jesse Ventura) turned out the most people to vote in Minneapolis or Minnesota. The second thing we saw is that the unions, they spent a lot of their money in getting people out in the street and working on voter turn out. For all the money they spent doing that, you know, the return on investment was, while it sounds great, is marginal. And once again, there -- you know, will take significant credit for it, however, with Republicans in tight seats and with Democrats all over the place. I also think there are two other things about the election. First of all, if you were an incumbent and you didn't get re-elected, you are a very rare bird for sure. And there had to be some extenuating circumstances. Most of -- almost all the incumbents got elected. And that says a lot of people -- a lot of people sort of like what is going on. Like the incumbents and all the polls afterwards and all the analysis show that people were pretty content with the issues. Also we learned in the polls that, you know, Bill Clinton didn't have anything to do with the election. The final point that I would make on the election it goes to the point some of our colleagues made, is that it is the beginning of the year election. And forget the presidency. I mean, that will be the traditional parade and so on. And changed by the California primary arrangement. But everybody in the Congress is running for election like they have never run before because they are wondering whether the union is really successful and who provided the money and where am I going and what issues do I have to deal with. Which brings us to the point of what do we face now. And I would just make a few comments about that. First of all, no matter whether we even had the election, it would not matter what the agenda is, the way we do business up there is going to change. It used to be, not very many years ago, I mean, long after I got gray, it was still that you could say we knew these guys were for this. We knew these guys were against us. And we are going to work on these fellows and ladies over here. Now that is not true anymore. And this group over here are all with us on the environmental and the -- and lets say in the OSHA issues. But they are totally against us on health care and social security and the social issues. Now this group over here, who are with us, on the social issues are not with us on the environmental issues. And this goes all through the Congress. And so we really need to find a new way to do this. We are going to be building coalitions and fractions of activity around issues where we will make friends and great companions of folks for Monday, Tuesday and Wednesday, throttle their necks for Thursday, Friday and Saturday. And try and make peace with everybody on Sunday and start the process all over again. There is no more, you know, very, very few people business can be sure they have or the unions are going to be sure they have or others are going to be sure. Now that brings us to issues in a totally different way then we used to look at issues. We could all look around the room and say, everybody for tax improvement, you know, we are all there. Well, who is there with us? We need to go out and look at that. So we are looking at the issues in three ways. What are the issues that everybody can put on the table and move in an aggressive way? Limited number, early on, and we ought to agree on that. Second, what are the issues that are coming down the road and we need to figure out a way to stop? Because, and whether we do it in the Senate or whether we do it in the courts, whether we do it in the court of public opinion, whether we are lucky enough to do it in the House, we've got to deal with that. And the third is what are the ground work, what are the issues of ground work that we can lay as we start moving ahead with the more compelling, long-term, three, four, five year issues that are the ones that have real money and real effect in it for our members. So, sum it up, the election wasn't what everybody thought. It wasn't what everybody, you know, predicted. But it was pretty much the same people that were there, with some little adjustments. Great amounts of money thrown at it. And a lot of people thinking about where they are going in . And the issues, it is going to be more complicated because we have to do it in a different way. We all would probably agree on the issues. I'm looking forward to a very interesting eighteen months. And damned if I know where it is going to come out. JASINOWSKI: You know, talking about the -- I'm looking at the issues in a different way though, which I think Tom is right about. I'm not so sure that we in the business community have done enough bonding with our members to fully appreciate the extent to which they are focused so much on increasing shareholder value and profits. And they want to know more about how the issues that we are focusing on do that. And deriving our agenda more from a member driven, outside of Washington focus, that looks at how growth and productivity gains can, in fact, increase profits and shareholder value. Now I have heard Jack talk about that and my other colleagues too. But I think most companies don't care about public policy any more unless we can show them how it improves their bottom line. And that means increasing growth or productivity. Or they don't want to hear from us. And I think, therefore, the agenda should be focused on those issues. And I think if you begin trying to put public policy and dollar terms on the bottom line, you get some results which are not the same results you get in Washington. For example, I do think that the issue of interest rate cuts and increasing growth, which most of us have supported, is one of the things that my membership, for example, feels is the -- one of the more important things we need done. And a lot of support for that. And if I'm calling them on other things, they are not nearly as supportive. I think that, therefore, the issues need to look at growth and productivity. Let me just say on each side one issue. I think on the growth side, the big sleeper issue for will be major tax change and tax reduction. I think the slow down in the economy and the priorities of Army and Archer will be to make the issue in the House be taxes, taxes and taxes. I think that social security, as important as it is, will be on the agenda, but people are making a serious mistake if they think all they are going to talk about for the next two years is social security and not taxes. And I know many of my colleagues know a great deal about taxes and they could talk about some of the specifics. But I would say that that is an area where we need to be united and really push forward on. I think on the productivity side, we have simply got to focus on the whole technology area and what that means in terms of everything from electronic commerce to dealing with the supply shortage of skilled workers. And if we can make that case, on the technology agenda with respect to productivity increases, we can get the kind of member support that we had in the last Congress which allowed us to pass a lot of high technology measures. BRANDT: I want to build on a couple of comments here. Tom -- you were talking about the fact that there is a different way of doing business. The -- can I assume then that you are saying we are going to see less partisanship in this Congress then in the last Congress? And that perhaps partisanship is an old fashioned way of looking at this? And that perhaps there -- some people are positive that there is going to be a new sort of centrist majority, which is non party specific, of Democrats and Republicans?