Editorial

Beware: Serious Danger Lies Ahead

The corporate class that paid for George W. Bush's re-election is now lining up to get their payback.

In combination, they are demanding a breathtaking series of giveaways, immunities and privileges, and regulatory rollbacks, the likes of which Washington has not seen for a very long time. Here's the overarching situation:

Bush and the Republican Party have solidified their grip on power. Bush says he intends to spend the "political capital" that he built up in the course of winning re-election. The Republicans control both houses of Congress, and have expanded their majority in the Senate. Bush doesn't have to worry about re-election; but the Republican members of Congress do, and they know that an off-year election in a president's second term is one when they are particularly vulnerable.

So the corporations lining up for legislative handouts know 2005 is the year -- their best chance to win passage of unpopular bills that Members of Congress can hope their constituents forget about before the November 2006 elections.

They are preparing to throw huge sums of money at lobbying campaigns to get what they want. There's no guarantee they will succeed, but if they do, the impact will be devastating. v Here's a guide to three key elements atop the corporate wish list:

• Social Security Privatization: This is the biggest ticket item, by far. The privatization agenda is being driven by a combination of Wall Street firms -- who stand to make billions of dollars annually in fees by administering private investment accounts -- ideologues, and Machiavellian Republican strategists who hope to build support for the party by getting more people to identify their personal interests with the stock market.

  Business lobbyists say they aim to spend $50 million to $100 million in a major PR marketing effort to trick the U.S. public into thinking there is a need to alter the Social Security system, a public program that has drastically slashed the poverty rate among the elderly.

  In fact, there is no Social Security crisis. The need for so-called reform is completely fabricated. And the solution to the imaginary crisis -- privatization -- would entail massive costs: the siphoning of huge administrative fees to private brokers, the certainty that many people would end up with losing investments and no retirement security, and the sacrifice of the fundamental concept that society has a duty to care for all of its members, particularly the most vulnerable.

• Tort deform: The Chamber of Commerce and the business lobby are obsessed with undermining the civil justice system -- the ability of victims of dangerous products, unsafe workplaces or malpractice, among other wrongs, to sue the perpetrators for compensation.

  The tort system is vital not only to provide a measure of individualized justice for victims, but through its deterrent function in keeping unbridled corporations in check. The world is a far safer place because of the U.S. tort system.

  But because it holds them liable for wrongdoing, and introduces an element of uncertainty into their business planning, manufacturers and insurers, among other corporations, hate the tort system. Hence a trumped up campaign, based on lies and deceit, that lawsuits are driving medical costs out of control (thus justifying efforts to limit the rights of victims of dangerous drugs and medical malpractice) and making companies uncompetitive (thus justifying an effort to push class actions -- lawsuits bringing together a large number of victims of similar wrongdoing -- into federal courts, where they are treated less favorably).

• Sarbanes-Oxley reform: Remember Enron? WorldCom? Those plus a multitude of other financial scandals led to the passage in 2002 of the Sarbanes-Oxley financial reform legislation. A very modest package that the business community reluctantly let through after it became apparent that some legislative remedy was inevitable, one of the better components of the legislation was a requirement that company CEOs sign their financial reports and stipulate to their accuracy. They hate that.

  With financial scandals still unfolding (see Fannie Mae) and a host of trials upcoming for high-profile individual corporate wrongdoers -- HealthSouth's Richard Scrushy, WorldCom's Bernard Ebbers, and Tyco's Dennis Kozlowski -- undermining Sarbanes-Oxley is a hard sell. So Big Business is preparing a lobbying campaign based around invented allegations of the overwhelming burdens Sarbanes-Oxley places on small business.

The Big Business agenda is composed entirely of proposals that face strong public opposition -- which is why the corporations' prospects for success hinge on the dual strategies of spending huge amounts of money to deceive the public and grease the skids in Congress, and on ramming through legislation in 2005 with the hope that voters will forget by 2006.

Public opposition can in fact defeat these corporate money grabs, but only if voters make clear that elected officials supporting such measures are risking their job security.