John J. Castellani, president of the Business Roundtable, which represents the nation’s major chief executives, is counseling a wait-and-see attitude. Big business faces big trouble in '09

The economic outlook for business is surely grim. But when you figure in political forecasts, the future seems even more precarious to some industry leaders.

Corporate bosses from across the spectrum are pressing Congress and the White House for action on a host of problems, ranging from soaring gasoline prices to health care reform.


But with Democrats poised to gain greater majorities in the House and Senate and possibly recapture the White House, the solutions unveiled next year may not be the market-based antidotes envisioned in boardrooms.

In addition, some corporate lobbyists are warning their clients that hard-fought victories won during the Bush years, such as limits on some jury awards, may be eroded or lost if Democrats take the White House.

And they predict labor leaders, who largely stayed in the shadows in order to give Democrats more maneuvering room in their first majority turn in a decade, will be more emboldened come January. That could mean passage of such corporate heresies as the proposal to ease union organizing rules.

“The unions’ agenda really turns the clock back 40 or 50 years,” said R. Bruce Josten of the U.S. Chamber of Commerce. “And if you were one of the companies that played in those political spaces on tort reform, you’ve got to be concerned as hell.”

Of course, labor leaders disagree. And they note that their members represent the consumers who are suffering most from stagnant wages, lost jobs, falling home values, higher food costs and all the other ills plaguing the market.

A new report from the progressive Center for American Progress concluded that the estimated total cost of a Fourth of July barbecue for 20 family members driving 30 miles round-trip rose to $262.34 this year, up 8.7 percent since last year and 47 percent since 2000.

Others challenge Josten’s prediction on tort reform, arguing that the final negotiated legislation drew significant bipartisan support.

The one forecast that does draw consensus: Change is coming.

“There’s no time like the present for business to start preparing for that and thinking about where their own vulnerabilities might be and what their priorities will be,” said Jeffrey Peck, a lobbyist with Johnson, Madigan, Peck, Boland & Stewart.

“If people put their heads in the sand and pretend change is not in the air, they will probably be very unhappy with the result,” he said. “If they don’t, and realize it is manageable and doesn’t have to be as bad as they think, they can be in good shape next year.”

John J. Castellani, president of the Business Roundtable, which represents the nation’s major chief executives, is counseling a wait-and-see attitude.

“What we’re looking at is still a challenging economic environment,” he explained. “The real question is: What inning are we in, in this economy? Are we in the third inning of a difficult economy, or the seventh? I don’t think anybody knows.”

The issues bedeviling the economy have now become driving themes in the presidential campaign, and that’s likely to intensify.

What’s still unclear, said Castellani, is how either Democrat Barack Obama or Republican John McCain would prioritize their market cures once in the White House. The answer to that will help define which sectors need to go on defense.

“If you want to stimulate the economy, you will be hard-pressed to do that if you raise taxes substantially on businesses and wealthy individuals,” Castellani said.

“If you want to solve the health care problem or some of the housing problems, you may have to raise revenues, and that will have an adverse impact on the economy,” he added.

Jay Timmons is the executive vice president of the National Association of Manufacturers, an industry sector that has been hit particularly hard by the economic slump.

To him, the market messiness has caused a clarifying moment for the nation and the presidential candidates, which is just fine.

“There have been a lot of different goals in Washington. Sometimes it was environmental, sometimes it was economics and sometimes it was education. All of those things are very important,” Timmons said. “But right now, all policymakers seem to have a laser focus, brought about by the voters, on the economy and jobs. That’s a good thing.”

He acknowledges, though, that politicians will disagree on how to resolve the weaknesses in the economy. But he believes that the instability has become so great that there could be a rare opportunity for compromises to achieve the greater goal of righting the economy.

“Everybody is focused on the same goal, and that should be healthy for the country,” Timmons said. “I don’t think anybody is looking at one piece of the legislative pie. I think they realize that everything is very interrelated, whether it’s energy, taxes or tort law.”

Brian Darling, director of Senate relations for the Heritage Foundation, foresees a very different political environment, one still defined by partisan bickering. And from that perspective, he sees stalemate and inaction in a McCain administration.

Tougher times — and higher taxes — could be ahead for the business community under an Obama administration, said Darling. The oil sector, in particular, could take any number of hits, including a windfall profits tax if prices at the pump don’t decline.

“Hold on to your wallets,” was his advice to Big Oil.