Capitol Hill's New Reality

(page 3 of 3)

Companies that are on the ball politically will also turn away from Capitol Hill to get certain things accomplished. With Congress closely divided and likely to deadlock on many key issues, business will focus more attention on federal regulatory agencies and state governments. One prime example: litigation restrictions. Incoming House Judiciary Committee Chairman John Conyers (D-Mich.) is unlikely to allow any additional limits on lawsuits to emerge from his panel. So business groups will redouble their tort-reform efforts in state legislatures.

Action in the States

In the telecommunications industry, the Baby Bells have come to the conclusion that a Democratic House will stymie their attempts to win the ability to provide pay-per-view video services without certain regulations that they strongly oppose. Instead of fighting a losing battle in Washington, one industry representative says the telephone companies will target major states for a new lobbying push. "It’s not easy going state-by-state, but it makes sense if it’s the only way to get what you want," says a lobbyist working on the issue.

Even in Washington, there will be more action away from the Capitol. Seeking to curb the more onerous reporting requirements imposed by the Sarbanes-Oxley law, some businesses may head for the Securities & Exchange Commission and the Public Company Accounting Oversight Board (PCAOB), instead of congressional committees. "It can all be done with the stroke of a pen at the SEC or PCAOB," says one financial services lobbyist, "and we don’t even have to go to the Capitol."

Richard S. Dunham is a senior writer for BusinessWeek. Javers is BusinessWeek’s Capitol Hill correspondent.