Levick Weekly - Nov 9 2012

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Levick Weekly - Nov 9 2012

  1. 1. EDITION 16 Weekly November 9, 2012 Election Edition How the Election Impacts Public Policy GoalsCongressional Investigations | Consumer Financial Protection Bureau | FDA | HealthcareHomeland Security | Labor & Employment | Media | Tax Policy | Regulatory Landscape | USDA
  2. 2. This edition of LEVICK Weekly looks at the impact of the 2012 vote and what business can expect to happen—or not happen—on multiple fronts. Our Election Edition features interviews with ten of the top government relations experts in the country in which they discuss what’s next in general areas from regulatory to tax policy, as well as specific prognoses on healthcare, homeland security, and the lessons businesses can learn from how the campaigns leveraged social media. 03 Contents 04 Congressional Investigations with Mark Paoletta 08 Consumer Financial Protection Bureau with Jonathan Pompan 12 FDA with Joseph A. Levitt 14 Healthcare with Laura Bozell 18 Homeland Security with Michelle Mrdeza 22 Labor & Employment with Maurice Baskin 26 Media with Peter Fenn 30 Regulatory Landscape with Andrew Zausner 34 Tax Policy with John Kelly 38 USDA with Jessica AdelmanCOVER Image: The United States Capitol is the meeting place of the United States Congress, the legislature of the federalgovernment of the United States. Located in Washington, D.C., it sits atop Capitol Hill at the eastern end of the National Mall. 41 Blogs Worth Following 42Though it has never been the geographic center of the federal district, the Capitol is the origin by which both the quadrants ofthe District are divided and the city was planned. Officially, both the east and west sides of the Capitol are referred to as “fronts”. LEVICKHistorically, however, only the east front of the building was intended for the arrival of visitors and dignitaries. Like the federal In the Newsbuildings for the executive and judicial branches, it is built in the distinctive neoclassical style and has a white exterior.
  3. 3. Mark Paoletta To discuss how Congress will pursue investigations and hearings in the next four years, we spoke to Mark Paoletta, a partner at DLA Piper. Mr. Paoletta has worked in both the public and private sectors, including positions in the White House Counsel’s Office and on Capitol Hill as a Chief Investigative Counsel for the House Energy & Commerce Committee for a decade. His work focuses on government investigations, with an emphasis on congressional investigations and hearings.Congressional Do you foresee any likely change in this new Congress, in terms of either House. From the Affordable Care Act to the Dodd-Frank legislation, the GOP will use itsInvestigations increased or decreased aggressiveness oversight powers as a means to try to blunt or in how it goes about its investigatory alter the implementation of the Obama Admin- mission? istration’s signature programs. ― with ― Mark Paoletta: With the partisan divisions House Chairmen got their sea legs last Con- unchanged, it will be difficult to pass sig- gress on oversight. The E&C Committee made nificant legislation, and therefore there will Solyndra a household name and the Oversight Mark Paoletta be an increase in oversight activity in both Committee made the Fast & Furious inquiry a chambers, particularly with the Republican major issue. Chairman Upton (of E&C) and Issa 05
  4. 4. Weekly “ (Oversight) will lead the oversight work in the several House committees (notably E&C) will House again next year. Expect to see a number of continue to do vigorous oversight in this area. Cyber security will emerge as an even more other committees step up their oversight work. Cyber security will emerge as an even more significant topic of oversight. The House Intel significant topic of oversight. The House Intel Are there any particular different committee recently issued a draft report on committee recently issued a draft report on cy- directions—in particular, specific cyber security threats from China, and this issue ber security threats from China, and this issue industry sectors—that Congress will will be a top priority in several committees, will be a top priority in several committees, be emphasizing or deemphasizing as investigatory targets after January? including Energy & Commerce and Homeland including Energy & Commerce and Homeland Security committees and their counterparts Mark Paoletta: The health care sector will on the Senate side. It’s a hot button issue, and Security committees and their counterparts on see a significant uptick in oversight activity. I think you will find a great deal of bi-partisan the Senate side. It’s a hot button issue...” During the campaign, the President talked a cooperation to identify and craft effective solu- lot about finding savings in rooting out waste tions to this threat. fraud and abuse in this sector. Both chambers Expect to hear a lot more about what hap- will look aggressively for these savings by As a result of the election, are there fact, the committee’s staff director is a former pened in Benghazi. House Oversight held a conducting significant oversight both into the any key individuals who will be either chief oversight counsel so I would look for this hearing last month and I expect several others agencies and the contractors. Second, there is relinquishing or assuming investigatory committee in particular to get more engaged in committees to investigate and have high-profile still much to implement in the Affordable Care roles that will change the dynamics in a very aggressive oversight. Chairman Camp has hearings. Defense contractors will also come Act, and at least two House committees (E&C way that affects your clients? built a team to conduct some serious oversight. under increased scrutiny, in particular with and Ways & Means) will conduct inquiries On the Senate side, the Senate Government the hiring of a highly-regarded former pros- Mark Paoletta: The House Energy & Com- into how it is being implemented, what are the Affairs and Homeland Security will continue ecutor and congressional chief investigative merce Committee will have a new Subcommit- costs, issuance of waivers, and quality of care. to have the lead role in oversight, along with counsel as the head of SIGAR. He has already tee Chairman of its Oversight & Investigations They will use their oversight powers to shine a its Permanent Subcommittee on Investigations delivered some interesting audits and testimo- Subcommittee, and front runners include light on what is happening and perhaps affect (PSI). Chairman Lieberman is retiring and is ny in his first months in the job. Representatives Blackburn, Terry, and Bur- the rules being implemented. expected to be replaced by Senator Carper. gess. The committee has a newly-promoted Of course, there will be many issues that will Ranking Member Collins, who is term limited, We will see similar efforts in the financial chief counsel who is very seasoned, having drive the oversight agenda in the next Con- is expected to move to PSI as the Ranking Mem- services and energy/environment sectors. just run the Solyndra investigation. The Finan- gress that are not even on the horizon. For ber and Senator Coburn is expected to take the Dodd-Frank still has many significant regula- cial Services committee put a bright spotlight example, the meningitis outbreak recently Ranking Member slot on the full Committee. tions that are still being implemented, and the on the MF Global scandal. Incoming Chairman came on the radar and it has at least a couple Chairman Levin is expected to keep his inves- House GOP will scrutinize these regulations Hensarling recognizes the value of aggressive of Committees working hard to figure out how tigative focus on banking and other financial and try to modify the final rules. EPA’s regula- oversight and I expect the committee to con- this happened. And don’t forget that second and tax issues. Senator Grassley continues to tions on utilities and other sectors of the U.S. tinue with this type of work. terms of Presidencies usually provide several be very involved in oversight work. L economy have been very controversial and scandal-type episodes that will be sure to cap- The Ways & Means Committee recently hired ture Congressional attention. an impressive chief oversight counsel and, in06 07
  5. 5. Weekly next steps at the Consumer Financial Protection Bureau with Jonathan Pompan8 9
  6. 6. Weekly Since its inception, we’ve see the to one that it is rooted in cooperation and a Jonathan pompan CFPB focused predominantly on issues shared pursuit of market fairness. pertaining to “at-risk” groups such as veterans, seniors, and students. Do you How do you see Congress’ work with the see that continuing, or will the Bureau CFPB evolving as a result of the election? begin to broaden its approach? Do you see the relationship warming or cooling over the coming years? Jonathan Pompan: The focus on student loans, home buying, retirement, and service members Jonathan Pompan: The House of Representa- will continue. But it’s important to note that, tives, in particular, will continue to be a source thus far, the Bureau has been merely setting of scrutiny and criticism for the Bureau, as the table for what will be more scrutiny and adversarial Republicans maintained their more aggressive proposals for reforms in majority. While the Democratic majority in those areas. the Senate will temper the efforts to restruc- ture the Bureau, in the Senate, there will be It’s also important to note that the “fiscal cliff’ the question of another term for Director To examine the ways in which the newly-established Consumer Financial will have no effect on the Bureau, which is Richard Cordray or confirmation of his even- Protection Bureau (CFPB) will evolve under President Obama’s second term, funded through the Federal Reserve. At the tual replacement. All of this means that the we spoke with Jonathan Pompan, an Of Counsel with Venable LLP Mr. Pompan . same time, a second term for the President relationship between some on Capitol Hill and focuses his practice on providing comprehensive legal advice and regulatory spells real trouble for efforts to reorganize or the CFPB is likely to remain contentious, but advocacy in the areas of consumer protection and financial services. eliminate the Bureau altogether. The President any real changes would require the President is a staunch CFPB supporter and Elizabeth War- and Democrats to compromise. As result, the ren’s ascendency into the Senate puts a vocal Bureau will remain in the news. champion into a high-profile position. Perhaps the only safeguard for moderating the Bureau’s That will lead to interesting questions about How do you see priorities changing—or Bureau has open investigations in virtually all influence is the courts; but none of the legal how various financial services providers not changing—at the CFPB as a result of the market areas under its jurisdiction; such challenges brought to date have yet been effec- choose to involve themselves in the public the election? What issues will dominate as private student lenders, mortgage servicers, tive in that regard. debate. They all have a great deal of skin in the agency’s attention in the coming payday lenders, debt collectors, and more. the game and each will have to carefully Simply put, it seems that the CFPB is here to months and years? The fact that the President has won reelection consider the pros and cons of wading into the means that these investigations will continue stay—and, as a result, financial service pro- fray from their own particular perspectives. L Jonathan Pompan: Just about everything unabated, and that more are certain to come. viders need to double down on compliance we’ve come to know about the CFPB is going and brace for more scrutiny. At the same time to remain the same for at least the next year— however, they also need to foster productive and likely for the next two years. This means relationships with relevant staff at the Bureau that the CFPB is going to continue increasing in order to move from an adversarial rapport its regulation over banks and non-banks. The10 11
  7. 7. Weekly FDA Priorities How do you see priorities changing at FDA will adopt FSMA regulations and take the U.S. Food and Drug Administration other actions mandated by law, but, due to as a result of the election? Are there resource limitations, the agency will have to be particular hot-button issues, such as selective in its enforcement activities. As such, with Joseph A. Levitt food labeling, which might see more or companies will have to watch closely to see less attention? how those priorities evolve. Joseph Levitt: FDA’s top priority in the food Do you see the FDA as being more or less area has been implementation of the FDA receptive to business concerns as a result Food Safety Modernization Act (FSMA)—and of the election? Are there particular issues that will most certainly remain the case. on which businesses and the FDA will be Proposed rules that have long been under re- able to work more closely? view at the Office of Management and Budget should soon break loose and be published for Joseph Levitt: Under President Obama’s public comment. first term, FDA conducted an unprecedented amount of outreach to the food industry and Joseph a. levitt On the nutrition side, FDA is expected to other stakeholders, and the agency is to be publish final regulations on menu and vend- commended for coming across as wanting to ing machine labeling of product calories. I publish proposed rules that are both scientifi- would also be on the lookout for FDA to step cally sound and economically feasible. The up efforts to reduce sodium levels in a wide goal for achieving such commonality on the range of foods. nutrition side may be more challenging, as the Administration is expected to double down on How will the election results impact the its initiatives to combat childhood obesity. FDA budget? What do new funding levels mean for the food and pharmaceutical One new opportunity for collaboration with companies that FDA regulates? the food industry will be in the area of geneti- cally engineered foods, where FDA and food Joseph Levitt: Regardless of the election industry positions have been historically been results, the prospects of the fiscal cliff and quite similar. California’s Prop 37 has again To discuss how the election impacted regulatory priorities at the U.S. Food and possible sequestration mean that budgets raised this issue’s visibility and it’s clearly not Drug Administration (FDA), we spoke with Joseph A. Levitt, a Partner in the law firm across all federal agencies will be severely going away. As such, food companies should of Hogan Lovells US LLP and former Director of FDA’s Center for Food Safety and constrained. Even if Congress and the Admin- be communicating with the agency to ensure Applied Nutrition. Joe counsels numerous food companies and trade associations istration can reach a deal to prevent a worst continued alignment on their approaches to on food safety, labeling and compliance matters, and how to work effectively with case scenario, the Food and Drug Administra- producing, labeling, and marketing foods that the FDA. He is also a recognized expert in the FDA Food Safety Modernization Act tion budget is likely to be limited for years to contain bio-engineered ingredients. L (FSMA), including all phases of its development and implementation. come—and especially in the foods area.12 13
  8. 8. Weekly Healthcare Laura Bozell Policy with Laura Bozell For our examination of the election’s impacts on healthcare policy, we spoke with Laura Bozell, a Vice President at Cornerstone Government Affairs. For the last five years, Laura served on the Professional Staff on the Ways and Means Committee’s Health Subcommittee. In this capacity, she was responsible for the Medicare Part A portfolio, providing policy direction for the Committee and advising the Chairman and other Committee Members on issues affecting the nation’s 6,000 hospitals, home health providers, skilled nursing facilities and all other post-acute care providers. How has the election most dramatically reality that the law is not likely to be repealed. impacted the healthcare industry? What Those that have been delaying preparations do doctors, hospitals, insurers, and now face implementing a law that still lacks pharmaceutical manufacturers need to many necessary regulatory elements and will know about what’s coming next regarding be awaiting further details on what to expect legislative and regulatory priorities? between now and January 1, 2014. Laura Bozell: The biggest takeaway is that not There will also be the annual fight in Congress much is going to change. Implementation of over the sustainable growth rate—the physi- the Affordable Care Act (ACA) is going to con- cian payment mechanism within Medicare that tinue and industry players need to accept the seeks to discourage doctors from initiating rap-14 15
  9. 9. Weekly impact every healthcare provider that deals reduced hospitals’ bad debt reimbursements with the Medicare program, although we from 70 percent to 65 percent. do not yet have a clear idea of how it will All of this means that providers have a great be applied. deal of incentive to work with Congress and the White House to see that Congress acts on What are the major issues with Medicaid this critical issue. moving forward? Laura Bozell: Right now, the big issue I see How has the election impacted the surrounds the Supreme Court’s decision to healthcare regulation landscape? How make the ACA Medicaid expansion optional can providers, insurers, and others in for states. Specifically, that decision may have the healthcare industry ensure their the unintended effect of stranding a number voice is heard as ACA implementation of disadvantaged people that potentially won’t moves forward? qualify for Medicaid or the subsidies available Laura Bozell: There is a tremendous amount to purchase health insurance through the new of ACA-related regulation that was being slow- state-run exchanges. In many states, childless walked before the election. Now, it will all be adults and even some children living below coming down the pike in huge waves. To date, 100 percent of the poverty level are ineligible some ACA regulations have been introduced as for Medicaid and, because of the way the ACA interim final rules, bulletins or even guidances was written, they are also ineligible for exchange that do not allow for the traditional 60-day subsidies. If their state opts out of the ACA comment period—thus limiting the industry’s Medicaid expansion, these people may find influence. I expect there to be some congres- themselves without any health care coverage. sional oversight on this issue. My hope would So unless Congress acts (which doesn’t seem be that new rules will be promulgated in ways likely), there will be pockets of people that are that allow for greater transparency and in- left on the outside looking in. dustry input. But, at the same time, HHS has a The problem for providers is that they agreed short period of time to meet a lot of deadlines. id increases in volume of services. If Medicare ing cuts to balance the increased costs incurred to the ACA’s cuts precisely because everyone Once that happens, industry players should spending increases too fast, a cut kicks in—and, by fixing the physician payment system. was going to have health insurance coverage. make the most of every opportunity to have right now, there is a 27 percent cut looming if If you have a subset of people who still aren’t Finally, there is the question of sequestration. their say in the writing of rules that will define Congress takes no action to stop it. If Congress covered, the providers will have to cover the Under the Budget Control Act, Medicare cuts the health care system for some time to come. L does act, as it undoubtedly will, it might look to costs of treating them. The issue is further are capped at two percent should sequestra- other parts of the Medicare program for spend- complicated by the fact that in 2012 Congress tion kick in. If that should come to pass, it will16 17
  10. 10. HOMELAND Weekly Michelle Mrde z a SECURITY with Michelle Mrdeza To understand the impact of the 2012 elections on America’s approach to homeland security, LEVICK spoke to Michelle Mrdeza, who leads the homeland security practice group at Cornerstone Government Affairs. Ms. Mrdeza is a twenty- three-year Capitol Hill veteran, including four years as Majority Staff Director of the House Committee on Appropriations, Subcommittee on Homeland Security. How will DHS priorities change as a result cargo inspection, and disaster response and of the election? What can we expect to recovery. Second, there is unfinished business happen to the DHS budget over the next that both the Administration (and some in) 2-4 years? Congress want to tackle, not the least of which is immigration reform and cyber security, both Michelle Mrdeza: Homeland Security priori- of which pertain directly to homeland security. ties are unlikely to dramatically change during the President’s 2nd term and 113th Congress. However, remember the devil is always in the This is true for several reasons. detail. What might be different over the next four years despite a fairly constant emphasis First, threats remain the same and major on our highest threats? The degree to which programs continue to collect broad biparti- the federal government involves itself in issues san support: cyber security, aviation security, such as cyber security might be different, as18 19 Anthony Correia / Shutterstock.com
  11. 11. Anthony Correia / Shutterstock.com might the size of that government involvement The challenge for decision makers is how to Has the election created new opportunities How do you see DHS policy evolving with in real dollars. cut or reduce programs in a way that will have for the defense and security companies? regard to cyber-security? Are there unique Similar to most other non-defense discretion- neither an immediate impact on daily opera- Are there new challenges that these opportunities emerging for companies ary programs, we can and should expect to see tions nor a longer-term impact on homeland industries will have to overcome? that specialize in data protection? security. This challenge will be difficult when a shift in funding for DHS. While homeland se- Michelle Mrdeza: There will always be oppor- Michelle Mrdeza: Cybersecurity will remain the country continues to face direct threats to curity in general and the Department of Home- tunities for transformational technologies within one of the top priorities for both the Admin- domestic security—for example, the recently land Security (DHS) in particular have enjoyed the defense and security space. DHS simply can- istration and Congress. Absent some form of disrupted plots to bomb the Federal Reserve in significant support from Congress and the not achieve its mission without the technology to legislation that moves quickly through a lame Manhattan, the Washington Metro system, and Administration over the past eleven years, fis- innovate solutions that help achieve security and duck session (and there is some speculation that the United States Capitol complex. cal realities will temper efforts to “super size” efficiencies. Again, what will change is the avail- Congress may try to do just that), the Administra- everything that’s homeland security-related. Of course, all the talk about belt tightening did ability of dollars. Absent a major catastrophic tion is poised to issue an Executive Order, which not necessarily consider the wrath of Hurri- event, dollars will continue to shrink and the we expect sooner rather than later now that Homeland security is no longer immune to belt cane Sandy. While it is way too early to predict landscape will become increasingly competitive. elections are behind us. tightening, as observers are seeing as the 112th the financial impact of that major event and the The challenge for companies will be to under- Congress winds down its work on the fiscal Similar to opportunities for transformational federal cost, we do know efforts are underway stand where both the Administration and Con- year 2013 appropriations bills. Both the House technologies across the homeland security to calculate what FEMA might need as the East gress will put the taxpayers’ limited resources and Senate DHS spending bills are below the space, there will always be opportunities within Coast continues to recover. The Budget Control and to follow that money. fiscal year 2012 enacted levels and DHS will cyber security, particularly those that protect Act of 2011 allowed for emergency spending be subject to the across-the-board sequester data. One of the main sticking points in security but ultimately this spending will only contrib- scheduled to go into effect on January 2, 2013. cyber security legislation has been information ute to the deficit and the challenges of dealing sharing as the ability to protect information is with the fiscal cliff. critical to achieving a workable solution. L 20 21
  12. 12. LABOR Maurice BaskinEMPLOYMENT with Maurice Baskin To address the impact of the election on labor and employment issues, LEVICK spoke to Maurice Baskin, a partner in the Labor and Employment Law Practice Group at Venable in Washington, DC. Mr. Baskin counsels management on all aspects of labor and employment law, including union organizing, collective bargaining, wrongful discharge, employment discrimination, arbitration, government contracts, wage/hour law and “prevailing” wages, executive agreements, unfair competition, and personnel advice. How do you see the election impacting to enact pro-union legislation after the 2010 policy at the federal labor agencies, Congressional elections. During the last six particularly the Department of Labor months, the Administration postponed a num- (DOL) and the National Labor Relations ber of significant policy changes until after the Board (NLRB). Are there specific areas Presidential election, apparently to avoid any that will come under increased scrutiny negative political effects. Now that Obama has from a monitoring and enforcement won, expect the freeze to be lifted, unleashing perspective? Are there areas where a flood of new regulations and agency rulings efforts will be scaled back? from both DOL and NLRB. Maurice Baskin: Both the NLRB and DOL The most likely new rules to be issued post-elec- have been pushing a strongly pro-labor regu- tion include the DOL’s “persuader” rule, which latory agenda under President Obama, par- radically changes the “advice” exemption. It ticularly since the Democrats lost their chance will make it much harder for companies to get 023
  13. 13. Weekly “ expect to see increased union organizing and I would expect legislative gridlock to a proliferation of bargaining obligations. Also continue on the labor issues and no pending in the court of appeals is a challenge to the NLRB’s unprecedented notice of rights significant legislation is likely to pass both poster rule, which would force some six million houses... and there’s not much hope of employers to post notices telling workers how Congress intervening to stanch the flow to unionize. More NLRB rulings are expected permitting greater union access rights, and of ongoing regulatory initiatives, except there have been an increasing number of NLRB perhaps in the most extreme cases.” cases involving new challenges to employee handbooks. More regulations and tougher enforcement are also expected now from OSHA, again with po- tentially significant costs for employers. And, outside advice on responding to labor activities construction projects, which have been hotly of course, with Obamacare now impervious and communicating to employees—and even contested, will if successful effectively shut out to repeal, all of the economically burdensome criminalize failure to disclose the fact that they non-union companies—around 80% of taxes and regulations, primarily aimed at em- What are now the most significant do rely on third parties. The NLRB’s “ambush” the total pool—from competing for a share ployers, will become facts of life during 2013. opportunities for industry and government election rule, currently tied up in the courts of the biggest projects, at an increased cost to to work together on labor issues? on procedural matters, likewise decreases the taxpayers. How has the election impacted Congress’ Maurice Baskin: It is hard to envision much if employer’s options because it significantly work on labor issues? What can we We’re also looking at the continued expansion any industry/government cooperation on labor shortens the time between a union’s filing for expect over the next two years with of wage and hour enforcement and cover- issues, in light of the Administration’s regula- election and its holding one. regard to labor legislation? age. DOL is expected to continue to challenge tory agenda and the Congress’s inability to act. Other rules include a radical proposal by the employer classifications of workers, both as to Maurice Baskin: I would expect legislative So what this election ultimately means in the OFCCP [Office of Federal Contract Compliance their exempt or non-exempt status for purpos- gridlock to continue on the labor issues and labor and employment arena is that we will be Programs] for an affirmative action rule for es of overtime, as well as the workers’ status as no significant legislation is likely to pass both looking at a long succession of new mandates disabled workers of government contractors. employees versus independent contractors. houses. This inaction makes all the regulatory and legal challenges over the next four years. It will substantially increase the cost of compli- agenda items I’ve mentioned even more im- The government will issue orders and, if the Court challenges are pending against an NLRB ance for government contractors and poten- portant because it means that there’s not much legal challenges fail, employers will have no micro bargaining unit rule that makes it easier tially result in fewer qualified bidders. chance of undoing or reforming the relevant choice but to obey, if they can stay in business for unions to carve out smaller, special interest legislation, and there’s not much hope of Con- at all under the increased regulatory burden. There’s much more. For example, redoubled segments of the total employee population as gress intervening to stanch the flow of ongoing That is not a recipe for cooperation between efforts by the Administration to impose union- “appropriate units” for union elections. If that regulatory initiatives, except perhaps in the business and government, nor does it seem to only project labor agreements on government challenge fails, then employers should most extreme cases. be a good plan for job creation. L24 25
  14. 14. Weekly media with Peter Fenn Peter Fenn lessons With the passing of every election cycle, we learn multitudes about the ways in which the media landscape is evolving. To discuss the lessons gleaned in 2012, we spoke with Peter Fenn of Fenn Communications Group, one of the nation’s top political and public affairs media strategists. Since 1983, he has worked on more than 300 national, statewide, and local campaigns and represented numerous Fortune 500 companies. What can businesses learn and leverage ers, opinion makers, consumers, and average from the ways that candidates utilized Americans in ways that help us determine social media during the 2012 election what their interests, likes, and dislikes are. In cycle? Are there trends emerging that turn, we are able to reach out to them in ways impact public and private sector that breed a real sense of familiarity. It’s as outreach alike? if we’re talking to them in the grocery store aisles or over the backyard fence. In many Peter Fenn: This election showed more than ways, it’s as if social media have brought us any other—even 2008—the value of the per- “back to the future.” sonal connections that social media facilitate. We are witnessing a remarkable technological The Obama Campaign did a tremendous job advance that allows us to precisely target vot- of leveraging social media to connect with vot-26 27
  15. 15. Weekly “ ers in ways that were genuine, authentic, and to Facebook friends in swing states to ensure exceedingly likely to establish strong personal they got to the polls. The campaign found that social media..is changing communications relationships. Voters weren’t just being con- when five of a potential voter’s friends reached as we know it.” tacted by campaign personnel; they were being out, that potential voter was transformed into influenced by their friends. In the end, that a real voter because he or she was contacted made all the difference in getting out the vote by someone familiar, rather than via TV or an and aptly demonstrated the declining value of anonymous email address. What did we learn about the future How has the public affairs landscape traditional advertising. That’s the real value of social media—and it is of traditional media during the 2012 changed as a result of the election? For instance, Obama supporters could down- changing communications as we know it. election cycle? In an increasingly digital Which industries saw their influence load a mobile application in the final weeks of world, how are consumers of goods, grow? Which will have to work harder the campaign that enabled them to reach out services, and public policy interacting over the next two-to-four years to achieve with the television and print outlets that their policy goals? once dominated the landscape? Peter Fenn: Now that the President has won a Peter Fenn: The latest figures show that $1.1 second term, we are going to see implementa- billion was spent on television advertising— tion of Dodd-Frank and the Affordable Care Act and my guess is that figure will rise substan- move full speed ahead. But I believe that this tially when all is said and done. But the real Administration is one that is willing to work question isn’t what was spent; it’s about the closely with industry to solve the nation’s big- return on that investment. Traditional media gest problems. There will have to be compro- have become the “pay more, get less” option mises where the fiscal cliff is concerned—and today. Campaigns feel that they have to engage those compromises may set the stage for real on TV and in print, but I would argue that return to consensus building and cooperation about 90 percent of that money is wasted. not only across the political aisle; but between the public and private sectors as well. My sense is that we are going to see more campaigns putting more resources into social As such, I would advise healthcare and finan- media in future election cycles. In 2008, politi- cial services providers to do all they can to cal messages went viral and garnered tens ensure a seat at the table as Dodd-Frank and of millions of hits. In 2012, those numbers the ACA round out into form. They will have were even higher. Think about Romney’s “47 chances to make their voices heard—and Percent” remark or Obama’s “You Didn’t Make they need to make the most of every opportu- That” claim. More people saw those on their nity to do so. L computers than on TV. That tells us a great deal about where smart voter outreach is headed in 2014 and beyond.28 29
  16. 16. THE REGULATORYLANDSCAPE with Andrew Zausner
  17. 17. Weekly There are two mitigating factors. One is that affected. That’s something of a mixed bless- Andrew Zausner deals on various issues might actually get cut ing for business, as companies’ user fees will with Congress that will encourage the Obama increase, perhaps dramatically. Administration to back off on the regulatory The salient opportunity for business is probably front to some reasonable degree or another. not related to the overall budget for regulatory The other is that many of the proposed rules activity per se, as it involves some decision- will wind up in court, which at the very least making that has to be made in fat times or lean. will give businesses some breathing room. Best It’s all about the design of any new regulation, case scenario, they’ll die there. and whether or not there are competitive ad- vantages for companies in what the final result The industries affected will cover a wide looks like. That means businesses must make gamut. There’s no question that fracking will decisions whether to fight an impending reg, or continue to be a focal point for regulatory ac- to embrace it—to collaborate in its making in tivity. As an enforcement priority, the consum- order to minimize the fallout or, hopefully, real- For commentary on the impact of the elections on federal regulation, LEVICK er-oriented provisions of Dodd-Frank should ize a marketplace advantage. spoke to Andrew Zausner, a partner at Dickstein Shapiro LLP and a member of get a lot of renewed attention from the Obama the firm’s Public Policy & Law Practice. Mr. Zausner has served as counsel on a Administration. FDA actions will increase myriad of legislative and regulatory issues with a primary focus on matters that How has the election impacted across the board: food, drugs, and tobacco. In relate to energy and natural resources. Among the legislative issues that he has companies’ ability to work with the the aftermath of the meningitis outbreak, the concentrated on are the Energy Policy Act of 1992, the National Energy Security government toward a less burdensome compounding pharmacies will be a target for Act of 1991, and the Clean Air Act Amendments of 1990. regulatory environment? some time to come. Andrew Zausner: President Obama himself What changes are in store for regulatory said it best in 2009: “Elections have conse- budgets across the federal government? quences.” It seems pretty apparent that this How do you see federal regulatory Predictably, then, the business community can What challenges and opportunities may election has negatively impacted the ability prerogatives shifting as a result of the expect an unremitting barrage of new regula- arise for the larger business community of companies to use their influence toward election? Are there particular areas tory burdens as well as an intensified focus on as a result of these changes? a less burdensome regulatory environment. that are positioned for greater levels of enforcement. For businesses, the situation is That said, all Presidents fret dearly over their scrutiny and enforcement? exacerbated because, for months now, there’s Andrew Zausner: While there will be an legacies and this one may yet see how a more been a sizable queue of regs at the OMB [Office invigorated political climate for regulatory Andrew Zausner: During the past four years, of Management and Budget] that the Obama collaborative approach on the regulatory front activity, budgetary factors are a stress point, the Obama Administration has shown that, is very much in his interests. L Administration has not issued or publicly dis- although enforcement will be the last regula- when it cannot get the results it wants through closed for political reasons during the campaign tory area that will be cut. In the months ahead, legislation, it does so by exercising Executive season. There will now be a push to clear that the lame duck Congress will be focusing on the Power via regulation. The next four years will docket, and to create room to introduce more. fiscal cliff but, whatever the results of those be no different. deliberations, discretionary spending will be32 33
  18. 18. Weekly TAX We heard a great deal about tax reform Congress will likely include a legislative road during the 2012 election cycle. Now map for tax reform in the form of expedited that the voters have spoken, how much process and timeline to facilitate passage of change are we really likely to see? Who a bill in the next Congress. The House passed stands to benefit most from potential one such measure earlier this year. With the reforms? Who will benefit least? election results maintaining a relatively slim POLICY Democratic majority in the Senate and a Re- John Kelly: The outlook for tax policy and the publican majority in the House, some sort of prospects for meaningful tax reform remain fast track legislative process similar to budget muddled after what amounts to a status quo with John Kelly election. reconciliation may be the only way Congress can conceivably pass major tax legislation What happens prior to the end of the year through both chambers in the next Congress. when lawmakers attempt to deal with the A temporary extension of the Bush tax cuts approaching fiscal cliff will set the stage for would naturally establish a deadline for tax re- consideration of tax reform. Congress will con- John Kelly vene in a lame duck session over the next six form legislation, probably at the end of 2013. Un- less a tax reform bill is passed in 2013, the fiscal weeks principally to address the coming fiscal cliff scenario plays out all over again a year from cliff—the budget sequester, expiring tax cuts, now. It is hoped that that may provide enough in- and the like. With regard to the lame duck centive to work productively toward enactment session beginning next week, it is important to of comprehensive reform legislation. note that Congress will not rewrite the Inter- nal Revenue Code over the next few weeks. With respect to the actual content of tax reform, clearly the Obama and Romney campaigns had While it remains to be seen how it plays out vastly different visions. We are not likely to over the coming weeks, there are some conclu- see fundamental changes to the tax system in sions to be drawn with the elections behind Obama’s second term relative to what a Romney us. By most accounts, any agreement struck administration would have put forward. by Congress and the Administration during For insights on how the 2012 elections will affect tax policy, we spoke to John lame duck to address the fiscal cliff will likely Although the smoke has yet to clear, winners Kelly of Cornerstone Government Affairs. Mr. Kelly has 25 years of government extend most if not all the expiring Bush tax in terms of tax policy include the renewable relations work in public and private sector tax policy. He was formerly Director cuts into if not through 2013. If that’s the case, energy sector, which has seen mounting criti- of Federal Government Relations for Wal-Mart Stores, Inc. and served as the Tax there will be significant tax reform implica- cism of targeted tax breaks designed to jump- Legislative Advisor to the Assistant Secretary for Tax Policy at the U.S. Treasury tions. A lame duck agreement to temporarily start the industry. Many of those tax credits Department, where he led the Office of Tax Policy legislative efforts. extend the 2001 and 2003 tax cuts in and of are set to expire. Tax provisions favoring the itself will establish some context as well as manufacturing sector such as the research a budget baseline for a comprehensive tax credit will continue to receive support from reform debate in 2013.34 35

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