From Madison Avenue image-meisters to West Coast petrochemical producers, from mutual fund operators in Boston to cigarette makers in Virginia and the Carolinas, American business has a lot riding on the new Republican leadership that will take control of Congress this year.
The "Contract With America," the House Republican statement of policy priorities drafted before the election that gave the G.O.P. control of Congress for the first time in 40 years, sets out the early agenda. It calls for sweeping changes in the handling of business lawsuits, substantial tax reductions for capital gains, new incentives to spur investment by industry, additional tax cuts for individuals who put aside savings and curbs on the Federal regulatory burden.
But just as important as what Congress does, industry leaders and lobbyists caution, is what it leaves undone. And in some areas, they are still puzzling over just how the fine print in the G.O.P. contract would affect them in real life.
"Take 'tax code reform,' " said Wally Snyder, president of the American Advertising Federation, an umbrella organization of advertising firms and professionals. Under that rubric, eliminating advertising from the roster of deductible business expenses "might be seen by some as a way to bring in more money," Mr. Snyder said. "That's why we're putting so much emphasis on educating this new group of members of Congress," he added. "We're taking no chances."
A host of industries are likely to be affected by the changes on Capitol Hill. These are among the highlights:
*For Wall Street, says Marc Lackritz, president of the Securities Industry Association, the industry's trade association, there are several areas worthy of attention. All financial services firms, especially mutual fund managers and marketers, stand to benefit if Congress widens the availability of individual retirement accounts and makes them more attractive. Investment banking firms would be big winners if the new Congress promotes business capital investment and rescinds rules requiring early disclosure of plant closings caused by takeovers or mergers. Wall Street also sees a lower capital gains tax as encouraging investment, and thus spurring commissions. But other high-priority proposals affecting the financial markets are not so easy to call: The Glass-Steagall Act, which restricts certain securities activities by banks, is certain to undergo changes, but bankers and brokers are at odds over the most likely outcome. Similarly, several new Congressional leaders support freer trade in financial services, but Wall Street is unsure what it would have to offer to foreigners in return for access to their markets.
*The banking industry, apart from the Glass-Steagall issue, will be looking to the new Congress to rein in the Justice Department's aggressive efforts to enforce the Community Reinvestment Act's fair-lending provisons, industry analysts said.
*The insurance industry is paying attention to two big issues. Most important is the revision of the Superfund law, which determines liability for cleaning up industrial waste sites. It died in Congress last year. There is also the long-simmering debate over whether insurers should be subject to Federal, rather than state, supervision. Insurers, even more than most other businesses, also stand to gain from the far-reaching changes proposed to make it more difficult to sue for damages since they are frequently the "deep pocket" of last resort in product liability cases and other similar lawsuits.
*The petrochemical industry and many heavy manufacturers, while sharing the insurance industry's interest in the fate of the Superfund, will also be looking for a more sympathetic handling of various pollution control laws that in industry's view impose an unfair burden on manufacturers.
*Agribusiness fears the budget ax, which could finally chop away at a lot of Depression-era farm programs. Still, the industry has well-placed allies among the newly powerful Republicans, from Thomas J. Bliley Jr., a Virginia tobacco belt loyalist who will head the House Commerce Committee, to Senator Lauch Faircloth of North Carolina, a wealthy hog farmer friendly to the pork industry.
*Consumer products companies are generally optimistic about the change in leadership, especially cigarette manufacturers, which endured last year's Congressional hearings on the health risks of tobacco. The new commitment to reducing the burden of regulation may also help consumer products companies resolve troublesome conflicts between the labeling and advertising rules of the Federal Trade Commission and the Food and Drug Administration, executives said.
Broadly speaking, many business leaders believe that agencies like the Occupational Safety and Health Administration will be reined in by the new Congress. They may be too optimistic about that, but, at the very least, it will probably be much harder for agencies in the executive branch to impose new rules on business without a big fight on Capitol Hill.
