Rep. Barney Frank, D-Massachusetts and chairman of the House Financial Services Committee, has sketched what he calls a "grand bargain" between the business community and Democrats.
In Frank’s formulation, Democrats would support corporate priorities like trade liberalization and immigration reform if business would agree to facilitate unionization and expand health care, among other initiatives.
But Democrats and business are already parting company over one issue: minimum wage legislation. Many Democrats are backing the House version, which is a "clean" bill, free of amendments. Many corporate interests, meanwhile, support a Senate bill that includes tax breaks for small business to offset the added costs of raising pay levels.
A more profound split between Democrats and business, one that may help determine the fate of Frank’s bargain, is likely to occur over the mechanics of unionization.
At the heart of the conflict is a bill that would authorize a union when a majority of employees sign cards approving collective bargaining. Titled the Employee Free Choice Act, it is a top priority of organized labor, a constituency that helped put Democrats in the majority in the House and Senate.
Republicans generally oppose the so-called "card check" bill, supporting instead a measure that would ensure secret-ballot union elections. Both sides tout their legislation as the vehicle that will ensure fair tallies bereft of corporate or union coercion.
The first hearing on the card check measure was scheduled for February 8. When it was announced, Republicans on the House Education and Labor Committee immediately released a statement denouncing the bill and declaring that "the honeymoon’s over" with Democrats.
Fostering more union participation is one remedy Democrats advocate for addressing what they see as increasing inequality in the U.S. economy, or what they call "the middle class squeeze."
In a January speech at the National Press Club, Frank cited Wal-Mart’s proposal to staff its stores based on customer flow, rather than traditional schedules, as an example of how a corporation ignores the family needs of its workers.
"If you have to pick up your kid at school, that’s tough," he said. "Unions help protect people’s dignity in the workplace."
But business interests have indicated they’re going to push back hard. "Unions think the newly elected Congress owes them card check legislation," says Thomas Donohue, president and CEO of the U.S. Chamber of Commerce. "They’re going to have a major fight on their hands."
The National Restaurant Association has warned legislators that the card check bill will be one of its "key votes" during the congressional session. Interest groups determine whether they will provide political and financial support to candidates based on their voting records on such issues.
The restaurant organization so aggressively opposes the bill that it has told Republicans not to sign up as co-sponsors of the measure. In the previous Congress, the bill garnered more than 215 co-sponsors, including several Republicans.
"That’s not acceptable," says Steven Anderson, president and CEO of the association. "This is very, very important as we move on in the 110th Congress."
Another issue that business has put at the top of its agenda is health care. In this area, there may be more common ground between Democrats and corporate interests.
For most Democrats, universal coverage is a fundamental political goal. For businesses, universal coverage may lower health care costs.
One of the ways to reduce health spending for companies is to increase coverage among the 47 million Americans who lack insurance. The bills for their care ultimately are paid through raising premiums for those who do offer coverage.
"The cost of health care was the No. 1 business expense in 2006," says John Castellani, president of the Business Roundtable. "That was the fourth year in a row. The current situation is just unsustainable."
That predicament led Castellani’s group to create an unusual partnership with AARP and the Service Employees International Union to promote universal coverage. AARP, SEIU and the Roundtable often are on opposite sides of issues.
Another umbrella organization, the Health Coverage Coalition for the Uninsured, brought together 16 disparate organizations to recommend ways to achieve universal coverage by expanding a federal-state program for children and broadening Medicare to insure more adults.
Whether the Roundtable, AARP and SEIU will agree on precisely how to achieve universal care remains to be seen. But Castellani is not focused on that at the moment.
"We want the political environment to be such that the government takes on the issue," he says.
Political reality, however, may prevent major health care reform. For the first time in a generation, contestants in the presidential campaign will be vying for an open seat, creating a free-for-all in both parties. And Republicans will try to wrest control of Capitol Hill away from Democrats in the next election. Health care progress may become a casualty of political warfare.
"I don’t think there’s a snowball’s chance in hell of anything major happening between now and 2008," says Andrew Webber, president and CEO of the National Business Coalition on Health.
Stalled, but optomistic
Although seminal change in the health care system may be too much for Congress to accomplish, some observers are optimistic that Democrats and the business community can form a solid relationship, despite the perception that it’s Republicans who are more sympathetic to the corporate agenda.
One reason for the bright outlook is that many of the candidates who were in the vanguard of the Democratic takeover are more conservative than the party’s liberal Capitol Hill veterans.
All Democrats will be under pressure to produce legislative accomplishments to satisfy an electorate that prefers divided government and political pragmatism.
Last fall, voters demonstrated that they care more about solving problems than engaging in partisan fisticuffs, says Gregory Casey, president and CEO of the Business-Industry Political Action Committee. He also asserts that even though such voters put Democrats in control, they aren’t committed to the party.
Democrats "have a limited window to perform to that ‘fix it’ standard or that borrowed group of voters will move somewhere else," he says.
Maintaining voter good will depends in part on a thriving economy—something that Democrats and business both seek. One of the key components to the success of the House Education and Labor Committee agenda is a healthy and growing economy, says its chairman, Rep. George Miller, D-California.
Miller says that he is talking with business about the need for innovation and a competitive workforce. As an example, he cited a steel manufacturer in his East Bay district in California.
"Almost everybody in that steel mill is going to school," Miller says. "They know that unless they can provide that value-added on that sheet of steel every day, 24 hours a day, seven days a week, they’re not going to be in business. This is a radically changing economy. This committee wants to be part of economic growth and expansion."
But in order to achieve that goal, according to Frank, Democrats and business need to establish momentum—and his grand bargain can help.
"Right now we’re stalled," Frank says. "That’s why the business community should care."
Workforce Management, February 12, 2007, p. 27 -- Subscribe Now!