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

1. PUBLIC
AFFAIRS
201 EXPECTATIONS
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2. PUBLIC AFFAIRS | 201 EXPECTATIONS
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Michael Kehs
US Director, Public Affairs
General Manager, Washington, DC
michael.kehs@hillandknowlton.com
201 NOW TRENDING
1: Over in the House of Representatives, expect an onslaught of
With the Republicans taking back the House of Representatives legislative initiatives. With the Republicans controlling at least 242
and greatly reducing Democratic ranks in the US Senate, it will be seats, based on the most recent tabulations, and only needing 2 8
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almost impossible to enact any controversial legislation. We are votes to pass a bill, they can pass whatever they like with little fear
unlikely to see legislation of the magnitude of the 2010 Patient of the Democrats countering their priorities. Plans are in the
Protection and Affordable Care Act and Financial Reform for the works for the “bill of the week” to demonstrate to the electorate
next 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, they
floor. 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
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Democrats will find it tough sledding to attract seven Republican Although the prospects for momentous action are bleak, divided
votes. For the Republicans to find 1 Democratic votes will be
3 government could lead to the enactment of narrow legislation in
nearly impossible. Minority Leader McConnell has publicly any of these broad areas if either side shows a proclivity toward
indicated that finding 4 votes among his Republican Caucus
1 compromise:
should prove no problem. This means he controls the legislative • Tax reform (Tax cuts, International
agenda even though Democrats cling to a narrow majority. If he competitiveness)
does not want an issue addressed, it will not be addressed. • Regulatory reform
Gridlock will likely reign despite the punditry corps’ current claims
• The end of earmarks
that the political parties have to work together to address the
• Tort reform
ongoing economic tribulations.
• Energy jobs initiative
• Healthcare law changes

3. CORPORATE IMPLICATIONS Infrastructure and transportation-related businesses are facing
The potential consequences of the change in congressional acute appropriations concerns given the Republicans’ disdain for
leadership 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 myriad
congressional 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 for
action, not the threat of government intervention into a whole In this environment, every company now has a new business
host of business activities. The Obama administration has been partner—Uncle Sam—whether they like it or not. The bottom
signaling for some time its intent to become much more focused line for businesses is they will have no choice but to engage
on regulatory activity. with government, find allies and shape public policy at every
opportunity. Not engaging puts American businesses’ bottom
Federal 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 Protection
Agency, 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 the
business community.
Large healthcare and drug companies will face over 40 major
rules implementing the Affordable Care Act. Every company that
depends on Medicare and Medicaid reimbursements will be
affected. Over 200 rules are said to be in the works to implement
the changes to our financial laws. Investment banking, credit
card companies, insurance interests and accounting firms are all
in play.