In a year of tumult in U.S. politics in which control of Congress appears up for grabs, the result for business leaders is a climate lacking the certainty they crave for decision-making.
“The big unknown is whether or not Congress will take action on carbon dioxide,” said Izzo, as reported in the June 14 issue of Bloomberg Businessweek. “Absent clear environmental regulations, your long-term strategy is something you really have to equivocate on.”
Energy policy is far from the only issue surrounded by such doubts. Action on taxes, trade, immigration, jobs programs, and the funding of entitlement programs such as Medicare all hinge on who controls the House and Senate. Already trying to absorb what the new health-care law and the financial regulation overhaul likely to clear Congress might do to profits, executives nationwide don’t know when, or if, lawmakers will move on other major legislation.
President Barack Obama today took note of a need for clarity about future policies. In comments following a White House meeting with congressional leader to discuss issues including the Gulf Coast oil spill and the economy, Obama urged lawmakers to finish work on the financial-regulation measure to provide “certainty” to markets.
Talks among House and Senate leaders designed to craft a single measure from differing regulation measures passed by each chamber were to begin today.
June 8 Votes
In primaries, run-offs, and special elections held in 12 states on June 8, the main discernible trend was that women won big, though money or Tea Party support seemed to matter more than gender.
In California, former Hewlett-Packard CEO Carly Fiorina was chosen by state Republicans to face Democratic Senator Barbara Boxer in November’s general election. Meg Whitman, the former EBay Inc. chief who spent $71 million of her own money on the Republican gubernatorial primary, triumphed and will face Democrat Jerry Brown, a former governor.
In Nevada, Sharron Angle, backed by Tea Party activists, outdistanced 11 other Republicans and won the nomination to square off against Senator Harry Reid, the leader of the chamber’s Democratic majority. Senator Blanche Lincoln of Arkansas narrowly survived a Democratic primary challenge fueled by organized labor; she now faces an uphill re-election fight in November against Republican Representative John Boozman, who leads in the polls.
Some of the June 8 results make business leaders nervous, raising concerns that both parties are moving toward more rigid ideological positions. Angle, for example, wants the federal Education Department eliminated and has called for the current tax code to be scrapped -- views shared by many Tea Party activists.
Castellani said he senses a record level of anxiety among his membership, more than 70 of whom attended a recent quarterly meeting, while 90 participated in February, the largest turnout in his decade with the group. His members, almost all heads of multinational corporations, are particularly concerned about stalled free-trade agreements and proposed new taxes on foreign income.
“People are trying to discern what the trends are,” he said. “Are these candidates who are going to understand that 95 percent of the world lives outside the United States, or isolationists?”
William Lane, Washington director for Peoria, Illinois- based Caterpillar Inc., watched the Arkansas race closely. The world’s largest maker of construction equipment backed Lincoln, the chairwoman of the Senate Agriculture Committee who Lane called a “pro-business” Democrat.
“None of us knows whether Republicans are going to have moderate success, significant success, or historic success,” Lane said. “But one thing that is clear is that the Congress is going to be re-centered after November.”
Control of Congress
For Lewis Hay, CEO of Juno Beach, Florida-based NextEra Energy Resources LLC, the largest renewable energy producer in North America, the results of individual races are less important than which party controls Congress. Democrats currently have the majority in both chambers.
“One senator from Florida isn’t going to impact what we do in Florida very much, but the composition of the House and the Senate could very well have an impact,” he said.
Hay is following what he calls a “no regrets” investment strategy for NextEra. If Congress passes legislation setting a national mandate for alternative energy sources such as wind and solar, those industries will prove to be “very, very good investments,” he said. If Congress fails to act, the investments will still be good, though less profitable.
“We would clearly invest a lot more, with more clarity on our climate and energy policy,” he said. “There’s a lot of capital sitting on the sidelines.”
Izzo is monitoring elections in regions where the utility operates and other major races. “I’m a little more worried about how things change post-November than before,” he says. “Each day Congress waits puts us a little bit more behind.”