- The Washington Times - Wednesday, August 6, 2003

After singing a slow, discordant melody for more than two years, the economy is beginning to hum a more upbeat tune, based on government and private reports in the last several days. That is good news for President Bush and his party in Congress, who face voters in 15 months. Yet, to truly boost the political fortunes of the White House next year, the orchestra of commercestill needs to play a little faster and generate lower unemployment.

Ontheother hand, a truly robust economy might be bad news for the Democrats. They face the same voters next November. Since they lag hopelessly behind the GOP on national security, Democrats hope the Bush Administration’s “economic mismanagement” resonates with voters.

And, while Washington has limited tools to fine-tune the business cycle, policy-makers could pursue several options to help further boost the economy’s prospects and send the stock market higher. Enacting litigation reform, an energy policy that spurs production and lowers costs and more free-trade laws are all steps to keep the economy growing. Interestingly, three interest groups historically aligned with Democrats oppose these initiatives — trial lawyers, labor unions and environmental activists. Therein lies a trio of trouble for a growing economy.

This is no coincidence. These organizations have multiple objectives. They obviously want to pursue their policy objectives — which they should. Yet doing so also puts the brakes on the economy — a move consistent with their political objectives. The trio of trouble may not consciously coordinate policies that slow growth, but the combined impact of their collective lobbying efforts does.

The slow progress in Congress on an energy bill is one example; environmental activists are a major reason behind the legislation’s torpid pace. These groups and their Democratic allies offered amendment after amendment limiting energy production and expanding costly regulations — policies that also slow the economy. While Senate Majority Leader Bill Frist, Tennessee Republican, tried repeatedly to limit the number of amendments, Democrats were in no hurry to finish the bill.

Environmental activists worked to hard to ensure that the legislation did not authorize exploration in the Arctic National Wildlife Refuge (ANWR). They also attempted to add a host of new regulatory controls on emissions. Once it became clear that the string of amendments would never end, Mr. Frist finally offered to take up last year’s Senate-passed bill as a way to get the bill to a conference committee. Senate Energy Committee Chairman Pete Domenici, New Mexico Republican, and his House counterpart, Rep. Billy Tauzin, Louisiana Republican, can now write a new bill in a conference committee that improves energy policy, not one that remakes environmental laws.

Energy policy tilted too much in the direction of environmental activists contributes to the high cost of natural gas. These expensive prices are hobbling the manufacturing sector of the U.S. economy and costing jobs. A RepublicanMidwesternsenator lamented last week that natural gas prices are the number one reason for manufacturing lethargy: “I have hundreds of businesses in my state that are hurt by the high cost of natural gas. And part of the reason is these misguided environmental regulations.” Passing an energy policy that included some smart environmental reforms and production incentives would address this problem.

High litigation costs also hamper economic growth. The main culprit behind the sea of lawsuits is the second voice in the trio — trial lawyers. Congress continues to labor to pass legislation limiting medical malpractice costs; instituting class-action reform; and reforming the practice of asbestos litigation — all of which address problems that take a toll on American business, particularly the manufacturing sector. Yet, lawmakers have been stymied at every turn, particularly in the Senate, where Democrat-led filibusters make it impossible to pass any legislation without 60 votes. The White House understands the linkage between the politics and economics of this issue. “A key priority of the president’s is to end the frivolous lawsuits that make it harder to increase jobs and economic growth,” a senior administration official told me.

Finally, free-trade agreements can also help bolster exports and promote economic growth. And the principal opponents of these agreements are labor unions — the third leg of the Democratic triad. The word among Washington insiders is that Teamsters President James Hoffa and AFL-CIO head John Sweeney plan an all-out assault on the upcoming Central American Free Trade Agreement. Even if labor is ultimately unsuccessful, its lobbying tends to slow completion and raise the costs of these treaties.

The triumvirate of environmentalists, trial lawyers and unions pursues an economic agenda in Congress which raises costs to small and large businesses, slows the economy and costs jobs. Yet we hear less discussion about the political consequences of their lobbying initiatives. The trio of trouble may never acknowledge it, but they perform in a political opera as well — singing sweetly and loudly with the Democratic Party.



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