|US: WHITE HOUSE ECONOMIC CONFERENCE |
December 15th, 2004
During his campaign for reelection, President Bush outlined in
stump speech after stump speech his top domestic priorities for
a second term: tax reform, partial privatization of Social
Security and limits on damages awarded in malpractice suits.
After more than a month of news dominated by the reshuffling of
the president's cabinet, the White House resumed its sales pitch
to voters this morning with the start of a two-day economic
conference in downtown Washington.
The event features an eclectic lineup of experts from corporate
America, academia, government and policy organizations. Their
job is to attract popular support for the president's domestic
programs, which all sides agree will require at least some
Democratic support to win congressional approval.
Among the panelists are representatives of industries and
interest groups that contributed heavily to Republicans for the
2004 elections and have an enormous financial stake in seeing
Bush's proposals become law.
Of the 35 participants announced by the White House last week,
17 have contributed more than $200 to one or more federal
candidates, PACs or party committees during the current election
cycle. Together they have given nearly $195,000 to Republicans
-- including $40,000 to the Bush campaign -- and just over
$23,000 to Democrats.
The employees and PACs of their respective organizations have
contributed more evenly -- a total of $5.6 million to
Republicans and $7.1 million to Democrats. But several of the
industries they represent -- including securities and investment
firms, banks and retail stores -- favor the GOP with their
giving and strongly supported Bush in the presidential race.
These interests are hoping for more than a slot on a conference
panel. They are expecting a seat at the table when the specifics
of Bush's economic proposals are hammered out behind the scenes.
Below are brief profiles of some of the issues being discussed
at the conference and the interests trying to influence the
The panel titled "Tax and Regulatory Burdens" will examine the
negative effects of taxes and regulations on the economy. Bush
campaigned on simplifying the tax code, itself an enormously
complex task, and lowering taxes on savings and investment. He
hasn't yet outlined specifics, but two items almost certainly
will be part of a White House plan: making Bush's prior tax cuts
permanent and modifying the alternative minimum tax, which
ensures that even wealthy people who take advantage of tax
breaks pay some taxes.
Both proposals are supported by a broad array of business
groups. Chief among them is the U.S. Chamber of Commerce, which
has contributed more than $152,000 in individual and PAC
donations in the current election cycle, 79 percent to
Republicans. The group's total budget for the 2004 elections was
reported to approach $40 million. The Chamber spent more than
$20.1 million on lobbying in the first half of this year.
The White House put Tom Sullivan, the Small Business
Administration's chief counsel for advocacy, on the panel.
Sullivan is a former executive at the National Federation of
Independent Business, which has contributed more than $701,000
in individual and PAC contributions during the current election
cycle 98 percent to Republicans. The group also sent out
millions of postcards, emails and faxes to help get out the vote
this year. NFIB spent $1.5 million on lobbying in the first half
of the year.
SOCIAL SECURITY REFORM
During the presidential campaign, Bush and John Kerry tangled
over how to keep the Social Security system solvent for future
generations. Bush wants to allow individuals to invest part of
their payroll taxes in private investment accounts, a plan that
opponents charge would reap huge profits for most of the
securities industry ($70.6 million in individual and PAC
contributions during the current cycle, 52 percent to
Republicans). Bush raised more than twice as much money as Kerry
from the industry during the presidential campaign.
Securities and investment firms deny that partial privatization
of Social Security, as the president's policy is described,
would have much of an impact on their bottom line. They will be
represented on the panel titled "Financial Challenges for Today
and Tomorrow" by Liz Ann Sonders of Charles Schwab ($300,000, 62
percent to Republicans).
Securities giant UBS Americas ($2.4 million, 61 percent to
Republicans), which could have a major stake in the outcome of
the Social Security debate, was represented by Mary Farrell,
managing director and chief investment strategist of subsidiary
UBS Wealth Management, in the day's first session on the state
of the economy.
Republicans for years have been pushing for tort reform, and
they may finally get their wish after gaining seats in the House
and Senate in the November elections. Bush has indicated he
wants to start by limiting damages in medical malpractice suits,
which he says have contributed to the skyrocketing costs of
Health professionals ($59.6 million, 63 percent to Republicans)
and hospitals ($13.5 million, 53 percent to Republicans), led by
the American Medical Association and the American Hospital
Association, are behind the president. The AMA has contributed
more than $2.1 million in individual and PAC contributions in
the current election cycle, 77 percent to Republicans. The AHA
has contributed $1.7 million, 56 percent to Republicans.
Also on the tort reform agenda is class action reform, a
priority of virtually the entire corporate community. Home
Depot, which is being represented by CEO Bob Nardelli on the
panel titled "The High Costs of Lawsuit Abuse," has made tort
reform one of its legislative priorities. The company has given
$1 million to the U.S. Chamber of Commerce Institute for Legal
Reform, reports National Journal. Home Depot's employees and PAC
have contributed more than $861,000 in the current election
cycle, 93 percent to Republicans.
The high tech industry also strongly supports class action
reform. Kevin Rollins, CEO of computer maker Dell ($409,000, 79
percent to Republicans), was part of the opening session on the
state of the economy.
Bush is pushing a number of proposals designed to make
healthcare more affordable. One of his top priorities in this
area is the expansion of health savings accounts (HSAs), which
allow individuals to make tax-free contributions that they can
later use for medical expenses.
Health insurers and HMOs ($6.3 million, 60 percent to
Republicans) strongly supported the creation of HSAs in the
Medicare prescription drug bill that passed in 2003. America's
Health Insurance Plans, the leading trade group for health
insurers, is working to ensure that changes in the
administration of HSAs give health insurers the flexibility they
need. The group's PAC has contributed $185,000 to federal
candidates in the current election cycle, 71 percent to
AHIP is undoubtedly familiar with Gail Wilensky, a panelist in
the session titled "Making Healthcare More Affordable." Wilensky
served under Bush's father as administrator of the Health Care
Financing Administration, which handles Medicare, and as an
advisor on health and welfare issues. Now a senior fellow at
Project Hope, she was one of Bush's spokespeople on Medicare
reform during this year's presidential campaign.
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