The more things change, the more things stay the same.
On the face of it, the reelection of President Barack Obama, continued Democratic control of the Senate, and unchanged Republican dominance in the House, suggests that very little changed in Washington as a result of last week’s US elections.
The election results may have signaled some long-term shifts in demographic and social trends—a base consisting almost entirely of old, white Protestant men no longer looks capable of sustaining a dominant coalition, the tide has unmistakably turned on gay rights issues—but those are lessons for office seekers rather than the corporate executives and public affairs professionals who must work with them.
Kathy Jeavons, partner and senior vice president of public affairs in the Washington office of Ketchum, makes the case: "Regardless of who you voted for, the reality is that this was a ‘status quo’ election. The makeup of governmental bodies in Washington remains basically unchanged, and sadly, the conventional wisdom here is that consensus, leadership and bipartisanship will remain in short supply.”
But in reality, the election has the potential to change the power dynamic in Washington in subtle (and perhaps not so subtle) ways. To achieve some of his most important goals—the implementation of already-passed legislation such as healthcare reform, to boost revenues by allowing temporary tax cuts for the wealthiest Americans to expire—Obama needs no help from the Republican-controlled House.
“Things may look the same, but businesses will need to consider several new dynamics as they set strategies to promote their interests, reputations, services and products over the next two years,” says Howard Opinsky, executive vice president and US public affairs practice leader at Hill+Knowlton Strategies.
Most public affairs experts believe that despite the sharp divisions evident during the campaign, the American people are looking for leaders from both parties to be more open to compromise. Opinsky says the Obama administration and Congress “will return to town with fresh input from frustrated and angry constituents demanding cooperation and progress. Will the fresh start on Capitol Hill usher in compromise, or more bitter partisanship?”
“We should know in the next few weeks whether the reelection of the President changes the working mood in Washington with respect to the divided Congress that he has to work with in the lame duck period as well as when the new Congress convenes in January,” says Scott Widmeyer (pictured), CEO of Washington-based Widmeyer Communications, who adds, with impressive understatement: “I don’t believe anyone expects miracles overnight.”
Catherine “Kiki” McLean, senior partner, global head of public affairs at Porter Novelli, is a little more optimistic. “The election results demonstrate an American public demanding solutions,” she says. “And leaders at all levels of government are beginning to communicate their understanding of this assignment. Public comments from the President and Congressional leaders all point to setting the stage for working toward real achievements on the dramatic fiscal and economic issues facing the country.”
The most immediate challenge facing both parties—and one that has significant implications for the business community—is the so-called fiscal cliff.
“If US policymakers cannot come to agreement on how to cut about $109 billion out of the budget by December 31, the ramifications will not just be felt on January 1, when automatic budget cuts would go into effect, but for the foreseeable future—affecting both the United States economy and markets around the world,” says Jeavons.
While not everyone agrees that the cliff is in fact a cliff—there’s a case to be made that it’s more like a gentle incline, in that politicians will have plenty of opportunities in subsequent months to adjust policy and restore equilibrium—there’s no doubt that it will be the dominant political issue in coming month.
“The fight over government funds will be the central drama as Congress and the White House look for ways to close the budget deficit and prove to the world that we are on the road to financial discipline,” says Opinsky. “We’ll be working with clients to craft strategies and messages that explain the national need and benefit of federal contracts, tax incentives and rates, and other benefits important to their business.”
Pragmatism may not come easy to elected officials, particularly after a campaign during which so-called Super-PACs spent hundreds of millions of money—much of it, business leaders’ money—vilifying the two parties. But it will be a necessity for corporate interests looking to influence the debate, and their public affairs firms.
“For public affairs clients, the emphasis should be on the practical—how do we accomplish this goal—rather than ideological,” says Brendan Daly, executive vice president and national public affairs director at Ogilvy Washington. “That means not tilting at windmills to repeal Obamacare, for instance, because it is here to stay but working on ways to implement it effectively. It means rolling up their sleeves and making a convincing case that their issue's budget should not be slashed.”
Beyond that debate, there will be plenty more for public affairs to do.
“These are serious times for the nation and public affairs clients need to know that tough decisions lie ahead for policymakers and business leaders alike,” adds Daly. “They'll need sound, strategic thinking to help guide them through the difficult days ahead.”
As for specific issues, “It could be any of the following: immigration reform, energy policy, dealing with America's failing infrastructure, tinkering with ‘Obamacare,’” says Jeavons.
Adds Widmeyer: “For the public affairs communications firms, the weeks ahead should offer many new opportunities for business. We already are seeing an uptick on the health front and same can be said from the energy sector.”
In a series of articles to follow this one, The Holmes Report will consider the big issues in each of those areas.