Public Affairs 2011 Expectations


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Michael Kehs discusses how congressional changes and other trends will affect corporations in 2011.

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Public Affairs 2011 Expectations

  2. 2. PUBLIC AFFAIRS | 201 EXPECTATIONS 1Michael KehsUS Director, Public AffairsGeneral Manager, Washington, DCmichael.kehs@hillandknowlton.com201 NOW TRENDING 1: Over in the House of Representatives, expect an onslaught ofWith the Republicans taking back the House of Representatives legislative initiatives. With the Republicans controlling at least 242and greatly reducing Democratic ranks in the US Senate, it will be seats, based on the most recent tabulations, and only needing 2 8 1almost impossible to enact any controversial legislation. We are votes to pass a bill, they can pass whatever they like with little fearunlikely to see legislation of the magnitude of the 2010 Patient of the Democrats countering their priorities. Plans are in theProtection and Affordable Care Act and Financial Reform for the works for the “bill of the week” to demonstrate to the electoratenext two years because of simple arithmetic. that Republicans are in tune with public desires to see more done to create private sector jobs and reduce government spending.In the Senate, 60 votes are required to bring a measure to the However, when these bills make their way over to the Senate, theyfloor. Virtually every issue of any consequence faces a filibuster are likely to be unceremoniously tossed aside.threat. With a new alignment of 53-47 in the 1 2th Congress, the 1Democrats will find it tough sledding to attract seven Republican Although the prospects for momentous action are bleak, dividedvotes. For the Republicans to find 1 Democratic votes will be 3 government could lead to the enactment of narrow legislation innearly impossible. Minority Leader McConnell has publicly any of these broad areas if either side shows a proclivity towardindicated that finding 4 votes among his Republican Caucus 1 compromise:should prove no problem. This means he controls the legislative • Tax reform (Tax cuts, Internationalagenda even though Democrats cling to a narrow majority. If he competitiveness)does not want an issue addressed, it will not be addressed. • Regulatory reformGridlock will likely reign despite the punditry corps’ current claims • The end of earmarksthat the political parties have to work together to address the • Tort reformongoing economic tribulations. • Energy jobs initiative • Healthcare law changes
  3. 3. CORPORATE IMPLICATIONS Infrastructure and transportation-related businesses are facingThe potential consequences of the change in congressional acute appropriations concerns given the Republicans’ disdain forleadership could pose a serious set of new challenges for any “stimulus-oriented” measures. Telecommunications compa-corporate America. Some corporations are mistakenly interpreting nies are in for more FCC regulatory action encompassing a myriadcongressional gridlock as a positive indicator that they are no of concerns from net neutrality to broadband.longer in the crosshairs. What has changed is the venue foraction, not the threat of government intervention into a whole In this environment, every company now has a new businesshost of business activities. The Obama administration has been partner—Uncle Sam—whether they like it or not. The bottomsignaling for some time its intent to become much more focused line for businesses is they will have no choice but to engageon regulatory activity. with government, find allies and shape public policy at every opportunity. Not engaging puts American businesses’ bottomFederal agencies have a backlog of rules to promulgate. They are lines in severe jeopardy.working against a White House-imposed deadline of 201 prior 2,to the next presidential election. The Environmental ProtectionAgency, under Administrator Lisa Jackson, has shown an Michael Kehs leads H&K’s US public affairs practice out of the Washington, DC office.unprecedented willingness to circumvent the legislative process,unilaterally issuing rules that antagonize a wide swath of thebusiness community.Large healthcare and drug companies will face over 40 majorrules implementing the Affordable Care Act. Every company thatdepends on Medicare and Medicaid reimbursements will beaffected. Over 200 rules are said to be in the works to implementthe changes to our financial laws. Investment banking, creditcard companies, insurance interests and accounting firms are allin play.