The financial services industry wants one thing from the 112th Congress: gridlock.
Fresh off a brutal legislative fight over the sector’s new regulations, banking sources say they welcome the altered Congressional landscape with Republicans in control of the House.
“At this juncture, gridlock is all we can hope for,” said one high-level GOP financial services lobbyist. “We need a breather from all this regulation.”
But as Wall Street puts its money on inaction, other sectors such as high tech and manufacturing hope the new majority spurs movement on stalled tax cuts and free-trade pacts.
No matter their specific agendas, all industry and interest groups have something in common: They are readjusting priorities, rethinking strategies and trying to make new friends in the incoming Congress.
It’s not a simple task.
With the Republicans wiping out dozens of incumbents, stakeholders in areas such as defense, health care, big business and transportation now have to deal with a new set of players and an upended agenda.
Business groups such as the U.S. Chamber of Commerce, which shelled out millions of dollars to defeat many Congressional Democrats, have enthusiastically welcomed a new Congress they think will be friendlier to their agenda.
“We agree with voters across the nation,” chamber CEO Tom Donohue said in a recent statement.
The National Association of Manufacturers is hoping that the lame-duck Congress will extend all of the Bush-era tax cuts, including those that affect upper-income earners.
“In the short term that appears to be the low-hanging fruit,” said Aric Newhouse, NAM’s senior vice president for policy and government relations.
For other sectors that favored incumbent Democrats in their campaign-giving, the turnover in the House is more wrenching and will require a rethinking of how they approach Capitol Hill.
“Defense industry executives are shocked by the decimation of Democrats on key committees,” said Loren Thompson, a defense analyst at the Lexington Institute. “Now they have to learn to deal with a different cast of characters.”
Thompson said defense companies, which rely heavily on federal contracts, had come to depend on influential Democrats who lost their re-election bids, including three senior members of the House Armed Services Committee: Chairman Ike Skelton (Mo.) and Reps. Gene Taylor (Miss.) and John Spratt (S.C.).
Even though Republicans have said they will spare defense from major budget cuts, Thompson said company officials are wary of those pledges, particularly with the election of deficit hawks backed by the tea party such as Sen.-elect Rand Paul (R-Ky.), who campaigned on a platform to slash government spending.
The election of a Republican majority in the House will almost certainly doom efforts by the high-tech industry to push through one of its top priorities, net neutrality legislation.