- The Washington Times - Wednesday, November 8, 2006

Congress may have a radical new look thanks to Tuesday’s elections. But don’t expect the results to prompt sweeping changes across corporate America.

Democratic-led initiatives in Congress during the next two years will result in few major business changes — with the possible exception of a proposed increase in the minimum wage that may win substantial Republican support, analysts say.

Generally speaking, Democrats have said they will differ from Republicans by being tougher watchdogs for corporate wrongdoing and government spending, and bigger defenders of consumers and labor unions.

Still, “there are not going to be wholesale changes in economic policy” because neither party has an overwhelming majority in either the House or Senate — and this may explain the stock market’s recent strength, according to Wachovia Securities economist Mark Vitner.

Stocks posted modest gains yesterday with the blue-chip Dow Jones Industrial Average recording a fresh record as Wall Street displayed an upbeat mood over potential government gridlock.

California Rep. Nancy Pelosi, who is in line to become speaker of the House, has promised to fight early in the next Congress to lower the price of prescription drugs available through Medicare.

Efforts to curb military spending are also likely, political and financial analysts said, following an election whose outcome was influenced largely by voters’ dissatisfaction with the war in Iraq.

But with the two parties stalemated in the Senate, where it usually takes 60 votes to pass major legislation, the pharmaceutical and defense industries, among others, may find themselves mostly unthreatened by potential changes in law.

“I think this gives us many opportunities to work with the new majority,” said Jay Timmons, senior vice president of policy at the National Association of Manufacturers.

“The incoming speaker is incredibly savvy, and she’s going to want to create an environment where her party can govern for more than just two years, and in order for her to do that she’s going to have to reach out to nontraditional allies.”

Many Democrats who won Tuesday ran on pro-business platforms, Mr. Timmons added.

“So we’re very hopeful that we’ll be able to work with them, in concert with the minority,” he added.

The U.S. Chamber of Commerce said it will continue to work with members of the new Congress on both sides of the aisle who favor pro-business legislation. The chamber said it remained optimistic Congress will support its agenda.

“We worked hard to elect pro-business candidates,” said chamber President and Chief Executive Officer Thomas J. Donohue.

“In a very difficult environment, we won some and we lost some … [But] what counts is whether we are a force when the big decisions are made, and we will be.”

But organized labor also played a key role in electing many Democrats.

The AFL-CIO labor federation spent $40 million on a massive voter-mobilization campaign, which the federation says resulted in 74 percent of union members nationwide voting for Democrats in House elections, and 73 percent voting for Senate candidates in 12 battleground states.

“We’re very proud and excited to see from the numbers that union voters drove a wave that elected a pro-working-families majority in the House, and very likely the Senate,” AFL-CIO President John J. Sweeney said.

Mr. Sweeney said the federation won’t be shy about asking the new Congress to support labor’s causes.

“And we’re not just going to hold them accountable — we’re going to unite our country behind them to renew economic opportunities for all.”

Mrs. Pelosi has pledged that Democrats would move to raise the minimum wage — a policy change that could hurt small businesses, fast-food restaurants such as McDonald’s Corp., and other retailers.

Ballot measures that order increases in existing state minimum-wage laws passed in Arizona, Missouri and Montana, among other states. Alaska voters, meanwhile, helped protect the wallets of Big Oil by defeating a proposal to increase drillers’ taxes by $1 billion a year.

• This article is based in part on wire service reports.

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