business

The Senate Brawl May Hit Business

The protracted battle over judicial nominations could exact a heavy toll on Corporate America's Capitol Hill wish lists

By Lorraine Woellert

Officially, Corporate America is backing President Bush's push to fill the federal bench with conservative judges. Top GOP lawyer C. Boyden Gray is rallying the pinstriped set to join social conservatives in the bust-the-filibuster movement, and big trade groups like the National Association of Manufacturers are adding their muscle.

As it has with Social Security, the White House is enlisting business to press an issue that's low on the corporate agenda -- winning confirmation for seven appeals-court nominees whom Democrats denounce as beyond the fringe on civil rights, the environment, and other issues.

Business likes conservative judges. But it hates turmoil -- and that's what this prolonged judicial fight means if a compromise isn't reached soon. Privately, some K Streeters are fretting that their Congressional agenda will be the casualty of a partisan crossfire.

LIFE DURING WARTIME.

  Majority Leader Bill Frist (R-Tenn.) is moving to ram through a Senate rules change that would force an up-or-down vote on the judges, ending the Democrats' right to filibuster nominees. If Frist goes nuclear, Democrats say they'll slow the Senate to a crawl -- a move that would imperil many business-backed measures.

"The sooner lawmakers get this resolved, the better," says R. Bruce Josten, executive vice-president of the U.S. Chamber of Commerce. "They need to get back to the business of legislating."

Unless a bipartisan group of Senate dealmakers can broker an 11th-hour compromise, the "nuclear option" could consume Washington for months. The fallout could affect business legislation in three ways:

Goners: An extended judicial fight could provide the coup de grace for bills already facing an uphill slog. Congress already passed limits on class-action lawsuits, but two other business-backed legal reforms -- a trust fund for asbestos claims and caps on medical malpractice payouts -- could be fatally damaged. The Central American free-trade pact is also imperiled. Bush needs Democratic votes to eke out ratification of the controversial deal. But the Hill's handful of pro-trade Dems are less likely to buck their party in the wake of judicial jihad.

The poisoned atmosphere on Capitol Hill could also suffocate fledgling efforts to find bipartisan fixes for Social Security and the pension system.

On the Cusp: Bush's energy legislation, which has been quietly inching forward in the face of record oil prices, could be sidetracked again by the wrangling. That's bad news for corporate chieftains, who want to see expanded domestic oil production and steps to shore up the vulnerable electric power grid. "I hope the appointment of judges doesn't interfere with something critically important to our economy," says Wayne Brunetti, chairman and CEO of Minneapolis-based Xcel Energy (XEL ).

Likely Survivors: Even if the Senate is snarled, Congress won't pass up a chance to dole out goodies with bipartisan glee. Expiring tax breaks -- including credits for research and development and for low-income hiring -- enjoy support on both sides of the aisle. And Democrats won't block a move to limit the bite of the Alternative Minimum Tax. Spending bills, too, are likely to move, offering inventive lobbyists some vehicles to carry their pet projects.

FRENCH CUFFS GO GOLFING?

  The clash highlights an uneasy marriage of convenience within the GOP. Business leaders and other economic conservatives have little in common with the Religious Right except a mutual desire to help Republicans win office. Social conservatives are now claiming their due by pressing for judges who will roll back court rulings on such cultural touchstones as abortion, religion in public schools, and gay marriage. Those flashpoints make business people queasy.

Corporate America's erstwhile allies aren't apologizing, however. Social conservatives note that they put off the judges fight while Frist pushed through class-action reform and new bankruptcy laws. Now, "there's no looming legislation," scoffs Manuel Miranda, a former top aide to Frist who's leading the grassroots effort to bust the filibuster. "The French cuffs can go back to the golf course for a couple of weeks."

K Street just hopes that when it returns, the Hill will still be a place where business can do business.

Woellert is a correspondent in BusinessWeek's Washington bureau. Eamon Javers in the Washington bureau also contributed to this story

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