On Tuesday night, Republicans won control of both chambers of Congress. So what will the win mean for Charlotte businesses and the local economy?
Some business leaders are looking for movement on thorny issues such as tax reform and a long-delayed immigration overhaul. But experts warned Wednesday that any changes that come out of Washington might be more incremental.
Former Nucor CEO Dan DiMicco also urged both parties to work together if they want to successfully jump-start an economy that he says still needs work.
“Whether they can find a way to work together will determine how effective they’re going to be in getting the economy going, supporting manufacturing and creating jobs,” said DiMicco, who stepped down as the Charlotte-based steel-maker’s chairman last year.
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Here’s a further look at what Tuesday’s vote could mean for the Charlotte economy and some of its key sectors.
For Charlotte, a Republican-controlled Congress might benefit the region’s economy – but probably not in any major ways, said Mark Vitner, senior economist for Wells Fargo Securities.
The changes in Congress might mean less “politically motivated obstruction,” possibly making it more productive, Vitner said.
“It would be nice if Congress and the president could get more things done. It would boost consumer confidence and also make businesses feel a bit better about the outlook,” he said.
Congress might now move quickly on changing patent law to deter “patent trolls.” Such people file patents for intellectual property that they never plan to use, with the intention to sue others who they claim infringe on their patents.
Also, Congress might change the Affordable Care Act so that part-time employees can work more hours, Vitner said. In addition, Congress might repeal the excise tax the act imposed on the sale of medical devices.
All of those changes could benefit businesses in Charlotte and elsewhere, he said.
But it’s unlikely any substantive changes will be made to tax policy – a top issue for U.S. business – this late into President Barack Obama’s second term, Vitner said. He said he’s also somewhat skeptical there will be comprehensive changes to immigration policy in the near future, another key issue for businesses.
It’s more likely that Congress will make tweaks to various policies as opposed to “bold strokes,” he said. Deon Roberts
Thad Woodard, CEO of the North Carolina Bankers Association, said the banking industry in Charlotte and across North Carolina will be looking for the Republican-led Congress to provide some relief from “onerous” regulations.
Regulations, such as those created out of the Dodd-Frank financial overhaul law, have increased compliance costs for banks large and small, hurting their profitability, Woodard said.
Also, “the banks have been fearful of making the decision to lend because of various (new regulatory) requirements,” such as those governing eligibility for home loans, he said.
In recent years, attempts to change Dodd-Frank rules have “just been nibbling around the edges,” he said. Woodard said he is hopeful the Republican majority in the House and Senate will be able to remove “redundant” regulations.
But he said “real, meaningful changes” to Dodd-Frank still won’t be easy because they will require bipartisan support. Deon Roberts
The new Congress is not likely to find much common ground on hot-button subjects such as the Keystone XL pipeline or the Environmental Protection Agency’s carbon limits on power plants, Duke University’s Jonas Monast said.
“Much of the next two years is likely to be characterized more by political posturing than actual legislation” on those issues, he said.
But Monast, who leads the climate and energy program at the Nicholas Institute for Environmental Policy Solutions, said some pressing energy issues show promise for bipartisan agreement. Among them are expanding terminals to ship liquefied natural gas, national energy codes for residential and commercial buildings and legislation to encourage pipeline development.
In a report Wednesday, Hugh Wynne, a Sanford C. Bernstein analyst, said he expects Republicans to attack the EPA’s carbon limits on power plants that were announced in June but doesn’t expect the effort to be successful unless the party also captures the White House.
Senate Republicans are still short of the two-thirds majority needed to override vetoes by the president. But Wynne says Republicans might be able to wrangle concessions – on compliance deadlines, for example.
The National Center for Policy Analysis, a conservative think tank, says Senate Republicans gained enough seats to potentially push through the long-delayed Keystone XL pipeline, which would send oil from Canada to U.S. refineries. Bruce Henderson
DiMicco, who has continued to be an outspoken manufacturing advocate in retirement, said Republicans and Democrats should try to find common ground on infrastructure projects and promoting fair, rules-based trade.
“We need to create jobs, and the way to do that is to rebuild our aging infrastructure,” DiMicco said. “That means you have to spend money. This is an investment.”
At Hickory-based cable-maker CommScope Holding, Phil Armstrong, vice president for corporate finance, said competitive U.S. tax rates and a “constructive” regulatory environment are important to the company.
“We have a large presence in North Carolina,” said Armstrong, whose company employs 1,250 in the state. “To help us enhance that and increase it, those things would always be helpful.”
In a statement, Jay Timmons, CEO of the National Association of Manufacturers, outlined priorities for the industry, including extending a tax credit for research and development, tax reform and investing in infrastructure.
“We need Washington working again to get America on the right track,” Timmons said. Rick Rothacker
Lawmakers should focus on creating “fertile ground for entrepreneurs,” who want to see “certainty of progress” in the economy, said Dan Roselli, co-founder of Charlotte startup incubator Packard Place.
That certainty would come from Congress adopting policies that spur entrepreneurial growth, he said, such as expanding tax credits, streamlining the process for securing patents and extending student loan deferment.
William Griffin, CEO of medical equipment supply company Griffin Home Health Care, said he wants Congress to streamline paperwork he calls “humongous” and bureaucratic. He estimated that a bundle of paperwork he once needed to bill a patient for supplemental oxygen could have measured 8 to 10 feet long if the forms were taped on a wall.
Griffin, who employs 25 people in Charlotte and Gastonia, said he’d also like legislators to eliminate “unfair, unjust and, quite frankly, unnecessary” audits that delay Medicare reimbursements and result in lengthy appeals to correct errors.
Mike Feldman, CEO of T1Visions, said he would like Congress to create a national program offering tax credits for small-business investments.
“Capital support to fund job growth and job creation is my strongest hope,” said Feldman, whose company designs tabletop and wall-mounted touchscreens for public use. Jonathan McFadden