September 22, 2006    Volume 13, No. 17

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Power Shift: What Happens If The Democrats Win The House



BY RICHARD McCORMACK richard@manufacturingnews.com


The House of Representatives has a good chance of changing hands this November, flipping from Republican to Democratic control. If Democrats become the majority, they will assume leadership of every committee. They will schedule hearings, select witnesses and determine which bills get debated on the House floor. On many committees, Democratic staffs would double in size. Current Republican staff levels could decline by half or more. The change would be profound.

Talking to a dozen or so Washington lobbyists, policy analysts, congressional staffers and members of Congress, there is widespread agreement that a Democratic controlled House means one function of Congress will be restored: oversight of the Executive Branch. Up until a month ago, there has been little or no oversight of federal operations. No Republican committee chairman was going to take a Republican political appointee to the carpet on any program. That would change, and it would change dramatically.

Government oversight, audits and investigations would be paramount to the Democrat's agenda because they must cut non-performing programs to free up funds for programs they favor, says Rep. Tim Ryan (D-Ohio). "We have to squeeze this huge, huge monster, where the government loses $9 billion in Iraq and nobody blinks an eye," he says. "There are billions of dollars in the Pentagon that go unaccounted for. Programs aren't working. There is going to be a lot of accountability because Democrats have learned a hard lesson: just writing a bigger check doesn't solve the problem. The old Democratic Party of big government is just not going to happen."

Finding savings will be required in order to free up resources for student aid, health care reform, alternative energy research, manufacturing extension and other Democratic priorities. "We need an honest and thorough review of what's going right and wrong in all of these different programs to lead to a transformation of government," says Ryan.

If the Democrats win, Rep. John Dingell (D-Mich.) would head the Energy and Commerce Committee, returning to his perch after a 12-year hiatus. His staff is ready to fire off "Dingellgrams" to every corner of the federal enterprise. Given Dingell's base in job-battered Michigan, manufacturing and trade issues could be a centerpiece of his attacks on Bush administration policies.

"From Dingell's perspective, the administration's refusal to meet with auto executives highlights the administration's total lack of support for basic manufacturing," says one Washington congressional analyst. The Democrats "will use the economy as a wedge to try to highlight deficiencies in the Bush administration, all in preparation of the 2008 presidential campaign."

Dingell is expected to pound the Commerce Department's "manufacturing czar" -- Assistant Secretary for Manufacturing in the International Trade Administration Al Frink, who would "get hung up to dry," says one observer. "They'll nail him." Another said angry Democratic House members from the industrial states will "grill the heck out of" Bush administration political appointees. "They will shine a spotlight on the problems of the auto industry and the plant shutdowns to blame the administration for virtually everything."

Dingell could also venture into the administration's perceived lax enforcement of trade laws and its inability to force China to float its currency. If Dingell does pursue these topics he would be treading on other committees' turf, but that never stopped him in the past.

Dingell won't be the only committee chairman with a fervor for investigation. As head of the House Armed Services Committee, Rep. Ike Skelton (D-Mo.) said he would make oversight the centerpiece of his reign. As chairman of the Education and Workforce Committee, Rep. George Miller (D-Calif.) would prod the Department of Labor and the Occupational Safety and Health Administration. The House Science Committee under Bart Gordon (D-Tenn.) would investigate the decline of American competitiveness. The indefatigable Henry Waxman (D-Calif.) would take over the Government Reform Committee, applying investigative incisors to all manner of Bush policies and appointees. With John Conyers (D-Mich.) in charge of the House Judiciary Committee, there could be an impeachment inquiry.

This focus on oversight "is going to tie everyone in knots," says one Washington business lobbyist. "It will be all oversight all the time with more oversight hearings about more departments every week. It's all bad and it's all going to move in the wrong direction." Constant investigations will not improve the partisan tone of the institution, despite would-be House Speaker Rep. Nancy Pelosi's (D-Calif.) repeated pledge to run a more collegial House, say others.

There will be some governors placed on the Democrats, the biggest of which is the budget. This year is the first in decades -- perhaps ever -- that Congress has not even made an attempt to pass a yearly budget. Observers say the Republicans are avoiding having to cut domestic programs during a controversial election cycle. If the Democrats win in November, it is likely they will press for passage of the appropriations bills during the lame-duck session. "They will want to get things out of the way, however bad it is, so they can start with a clean slate," says one House staff member.

The budget will present problems for the Democrats. A change in party control "won't make much difference because money is unbelievably tight," says one congressional aide involved in appropriations battles. "There won't be profligate spending. They won't have the ability to do it." Adds another: "The deep fiscal nightmare problems will only get worse. The Democrats are going to be stuck with the responsibility of cutting a lot of programs that they're going to like." They will be hard pressed to propose the creation of any new program, however important the perceived need may be.

In the area of funding research and development, it's not clear if a change in party control would improve budgets. Rep. Frank Wolf (R-Va.), chairman of the House Appropriations subcommittee that controls a big portion of the federal civilian R&D budget, has been a strong proponent of research funding. The current House Science Committee chairman, moderate Sherwood Boehlert (R-N.Y.), is also a vocal proponent.

In the area of defense, Democrats might be able to pry additional funding for R&D and the university community by cutting missile defense and other Cold War weapons systems, but without current House Armed Services Committee chairman Duncan Hunter (R-Calif.) at the helm, there isn't expected to be much of a push for "Buy American" issues. In some ways, Democrat Ike Skelton "is more of a Republican than are the Republicans," says one House aide. Others note that if you were to close your eyes and listen to members of the House Armed Services Committee, you would be hard pressed to tell the difference between Democrats and Republicans. Democrats would be forced to fund Iraq operations, even if there is a debate over troop withdrawals, and would likely approve modest budget increases for DOD, as a means of buttressing their perceived weakness on security issues, again limiting their options in domestic discretionary accounts.

Democrats will also be facing the difficult task of dealing with President Bush's tax cuts. If those tax cuts are not extended, "they'll have to take the fall for that, which is a big political problem," says one former senior congressional aide. That won't necessarily be a problem, says Rep. Ryan. "We can't be afraid to ask those people who make more than $1 million a year to help us because it comes down to either we ask millionaires and billionaires in our country to help us or we borrow the money from the Chinese government. Right now we're borrowing the money from the Chinese. If we repeal the Bush tax cuts back to the Clinton-era level for millionaires, I think we can make great strides and start balancing the budget."

There also isn't expected to be a big change in U.S. trade policy, at least from the perspective of those who are upset with current policies. Democrats on the House Ways and Means Committee and their staff members are steeped in former Pres. Clinton's free trade ideology. This is due in large part, say observers, to the fact that multinational companies and free trade interests have provided Democratic members of the committee with hundreds of thousands of dollars in financial contributions.

Among those in Washington that are part of the "fair trade" movement, there is deeply felt anger toward the Democrats on trade issues. Members of the House Ways and Means Committee "go through a genetic screening to get there and they've all been funded by the same people for all these years that it's only a matter of style between the two" parties, says one Washington trade lobbyist. Evidence: in the last presidential election between a conservative Republican and a liberal Democrat, there was not much difference between them on trade.

The Democrat that would assume the chairmanship of the House Ways and Means Committee is Charlie Rangel (D-N.Y.), who was quoted last week as saying "no election is going to rise or fall on trade policy." He also said that the proposed legislation in the Senate to place a 27.5 percent tariff on Chinese goods if China does not allow its currency to float (the Schumer-Graham bill) "makes sense for home consumption but not much else." Nevertheless, with Rangel in the chair, any Bush proposal would be met with asperity.

One early trade test would be Democrats' willingness to adopt laws that would allow countervailing duties to be applied to non-market economies such as China. If the Democrats fail to push for such a change "it will be a very early sign that it's business as usual," says one trade expert.

But free traders aren't buying the business-as-usual argument. Free trade agreements, which are getting harder to pass each year, would be a tough sell with Democrats in control. Extending Trade Promotion Authority would happen only after intense debate and if changes are made to the statute. Any free trade agreement would be scrutinized for labor and human rights guarantees and environmental protection requirements. "But by saying that we're not for the Geneva Convention and other international agreements, we're hurting our ability to make progress on the trade deals that we negotiate," says Ryan. "We've opted out of the Geneva Convention and now we want to sign a trade deal and say to another country: 'You need to put human rights laws in there, environmental rights and labor rights.' They're going to say, 'Hey, wait a minute. You're not even living up to the Geneva Convention so why should you come here and talk to us about labor rights on the factory floor?' We're losing our moral authority here."

Under Democrats, traditional business priorities such as repealing the death tax, opening up the outer continental shelf for oil drilling, asbestos reform, lowering corporate taxes and reducing legal costs all get shoved off the agenda. "However hard it is to get things done now, it's going to be worse," says one business lobbyist.

With Democrats in control, Bush's last two years in office could be a lot like those of Bill Clinton's, say others.

Most all observers say the chances are pretty good the Democrats take control of the House, but that the Senate is more difficult. Charlie Cook of the Cook Political Report says there are 35 Republican seats in play with 20 either currently losing or within the margin of error. Right now it looks like a 12- or 18- seat flop. If the Republicans retain control it will be by the slimmest of margins, and on a "landslide" type of election day, Democrats might be able muster a 15-seat majority. On the Senate side, Democrats would likely have to win in Virginia and Tennessee in order to gain control. If Republicans remain in control, they will breathe a colossal sigh of relief.

But from a Democrat's point of view "there may be a tidal wave brewing," says Rep. Ryan. "Our base is so intense right now. They're just frothing at the mouth. They want the election to be tomorrow and that will help us because I don't think the Republican base is as fired up. You never know what could happen in a situation like this. It's unpredictable."



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