At the beginning of the year, business lobbyists worried that a bill cracking down on Chinese trade policies would emerge from Ways and Means. But those worries have faded as panel members have shied away from action that could depress economic activity during a recession.
Economic concerns have “greatly decreased chances of legislation dealing with China and currency happening in 2008,” said Calman Cohen, president of the Emergency Committee for American Trade (ECAT), a trade association of American chief executive officers that promotes international trade.
Cohen opposes bills that would allow higher tariffs on goods from China and other countries that peg their currencies at artificially low values against the dollar so as to keep their exports cheap and plentiful to America.
Such legislation “could do harm, particularly exacerbating the current instability of the financial markets,” according to Cohen. “Members are very, very attuned to developments in the market,” he said.
Democrats can expect Republicans to emphasize the economic damage done by energy and environmental bills, according to a Senate Republican leadership aide who predicted that the economic downturn would intensify rhetoric on both sides. Examples of languishing “green” bills include tax legislation, approved by the House last year but not the Senate, that would provide fiscal incentives for renewable energy and green jobs, and would pay for them by raising taxes on oil and gas companies.
“Their messaging is that this will create green jobs and new industries …The problem is that the people who now have jobs in the industries they don’t like will have to be put out of the job before these new jobs are created,” an aide said.
The shelved bills were always unlikely to succeed, but the faltering economy has handed their opponents a potent weapon with which to finish them off.
“We feel very passionately about the energy efficiency provisions,” said Aric Newhouse, vice president of government relations for the National Association of Manufacturers (NAM), which supports the energy tax incentives but opposes raising taxes, “but a $19 billion tax increase on the oil-and-gas sector is going to hurt them.”
Democrats may tread extra-carefully for fear of antagonizing their allies in the labor movement, who are already skeptical about “green” policies. Energy and environmental legislation may be unwelcome to unions concerned about how new regulations would affect their industries.
Naturally, some lobbyists argue that the new and malign economic circumstances support the case for action on their old priorities. Backers of a controversial trade agreement with Colombia are stepping up their lobbying, arguing that approving the deal would increase U.S. exports and stimulate the economy.
“Now is the time we need to promote U.S. exports. I think the case for the trade agreements is now stronger,” Cohen said.
NAM’s vice president also said the troubled economy made an argument for Congress to push forward on certain economic issues that could strengthen the economy, such as making the research and development tax credit permanent.
“The economic environment makes a pro-growth agenda more necessary as you look ahead for the coming months,” said Newhouse.
Manu Raju contributed to this report.
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