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WASHINGTON, DC (November 4, 2008) -- After a long Presidential campaign, the polls are closed, the votes are in and one thing is certain: change is coming to Washington, DC.

Companies doing business with or regulated by the federal government will face a new oversight and regulatory environment. Major overhauls to the nation's tax and healthcare systems are on the table, while the nation still faces high-visibility challenges in crafting a plan for an economic recovery and answers to the gyrating energy sector. At the same time, less-visible but just as severe threats, such as the nation's crumbling transportation infrastructure, will demand the attention of the next Administration.

Members of Venable's diverse legislative and regulatory team, who have served in the highest offices of government, including both a Senator and a cabinet member, as well as senior government attorneys and professionals from both sides of the political aisle, with backgrounds in the Executive Branch, both houses of Congress and also policy wings of both parties, offer a few projections for the industries and issues at the forefront of the 2008 Presidential election.

Former U.S. Senator Birch Bayh, fresh from campaigning, notes that the new President's experience in the Senate will almost certainly result in a better working relationship with Congress. "George W. Bush took a 'my way or the highway' approach to dealing with Congress," said Bayh. "Obama, McCain and Biden all come from the Senate and have worked closely with other members throughout their careers. Because of that, I think you will see a much more collaborative approach toward Senators and Congressmen from both sides of the aisle."

Bayh represented Indiana in the United States Senate for more than 18 years and spent the month of October campaigning for Barack Obama in Indiana. He believes the election's key question is whether the Democrats, who are poised to pick up an historic number of seats in Congress, will secure a majority that can consistently deliver the 60 votes needed to defeat a filibuster in the Senate. "If the Democrats hold 60 seats in the Senate, it will be a good news/bad news proposition," he said. "The good news is that they will be able to push through legislation, the bad news is if they fail to do that, they will have no one to blame but themselves."

Investigations and Oversight: Aggressive Investigations Ahead

Raymond V. Shepherd, III, a Venable partner and former Chief Counsel of the Senate Permanent Subcommittee on Investigations, predicts that companies can expect the breadth and depth of government and Congressional investigations to increase over the already rapid pace established by the current Congress. "Without the George Bush Administration to kick around, Democratic chairmen, especially Congressmen Waxman and Dingell and Senator Levin will be able to aggressively focus their experienced and tenacious staffs on investigating waste, fraud and abuse in the mortgage, financial services, pharmaceutical and government contracting industries," Shepherd says.

According to Shepherd, a victory for McCain will give companies in industries facing Congressional oversight little comfort. "The Democratic majority will exercise its investigatory powers aggressively, and given McCain's long history in the Senate ferreting out waste, fraud and abuse in government contracts, companies should expect this to be one of the few areas where President McCain and Congress see eye-to-eye."

"No matter who takes the oath of office on January 20th, it's going to be a frenetic year for Congressional investigations with each committee trying to out do one another in terms of substance, pace, and populism," Shepherd said.

Financial Services: Nov. 5 is New Administration's Day One

William Donovan, who has spent more than 30 years representing the interests of financial services providers such as credit unions and thrifts before Congress says, "From day one the single most compelling issue facing President Obama or President McCain will be the economic crisis. It has to be tackled head-on - if not it will continue to strangle the nation's economic vitality."

"Those in the broad financial services industry should understand that Senator Obama has sent a very clear signal that he intends to pursue an activist agenda as President. Overhaul of the government's financial services regulatory structure, consolidation of charter types, tougher liquidity and capital requirements, bankruptcy and credit card reform are all on the table," Donovan said.

Pensions and Retirement Savings: Employers, Employees Demand Relief

While serving as Tax Counsel on the staff of the Senate Finance Committee, Venable partner John O'Neill served as the lead staff person and negotiator on the Pension Protection Act of 2006, the most sweeping rewrite of pension laws since the enactment of ERISA in 1974. According to O'Neill, pension laws won't have to wait nearly that long to get another overhaul. "The financial crisis has put renewed attention on pensions and retirement savings," he said.

"Employers that sponsor traditional pension plans have faced devastating investment losses, and are urgently seeking temporary relief from their pension contribution obligations. At the same time, Americans' 401(k)s have suffered steep losses, threatening already shaky retirement futures. Congress will look at a variety of different ways to strengthen Americans' retirement security."

Energy: Tough Policy Choice Ahead - Does That Include Increased Fuel Tax?

With oil prices still wildly gyrating and a former oilman leaving the White House, the country is expecting a drastically new energy regime. Former U.S. Secretary of Transportation James Burnley notes that the House Transportation and Infrastructure Committee is already debating a $450-500 billion bill, due in February, that will require a significant fuel tax increase. The committee chair has also stated that he may consider moving to a vehicle-miles traveled-fee system that can be indexed to the cost of construction.

"Obviously, regardless of who is President, and even with a more Democratic Congress, the price range of oil will be critical to how much appetite there is for a significant fuel tax increase."

Burnley also notes there is another large issue at play: the impact of cap and trade legislation. "Both Presidential candidates support the concept of cap and trade. The fundamental idea in any such scheme is to raise the cost of the use of carbon, including gasoline and diesel fuel. Therefore, it is very possible there will be a substantial increase, imposed by federal legislation, in the cost of fuel; but most, or all of it, could be through cap and trade legislation."

"To date, neither candidate has proposed a comprehensive energy plan recognizing the necessity of developing all of the nation's resources and addressing our critical infrastructure crises," said Richard Powers, a Venable partner who advises traditional and renewable energy companies on energy policy and regulatory issues. "To make any meaningful progress, the Administration and Congress must not echo the policy mistakes of the last 30 years and react to short term events with short term fixes. The dynamics of the global marketplace and the economic strains being felt here and abroad will hinder new energy policy initiatives. Because of this, the question is whether the Administration working together with the Congress can come up with meaningful energy reform and whether both branches have the political will to implement those reforms."

Healthcare: President Must Roll Up Sleeves, Drive Consensus

"Clearly, health care reform is going to be one of the leading issues for the new Congress and Administration," said John O'Neill. "While everyone agrees something needs to be done, there is less consensus about what actually should be done, and hands-on Presidential leadership will be necessary to get a bill enacted. Employers must watch any reform proposals like a hawk and demand an accounting of the impact the proposals will have on the existing employment-based system and who will foot the bill for expanded healthcare coverage."

Labor and Employment: Most Revolutionary Change in 50 Years in Sight

Maurice Baskin, Chair of Venable's Labor and Employment Practice Group, says "With the election of Barack Obama and gains for Democrats in the House and Senate, businesses - both large and small - can count on a radically different landscape in Washington. The Employee Free Choice Act, if enacted, will bring about the most revolutionary change in the law governing union organizing in the past 50 years. The likely enactment of new civil rights damage laws, paid sick leave laws, government blacklisting of labor law violators, expanded enforcement of immigration sanctions against employers, and increased OSHA regulation will affect employers of all sizes in every industry."

Baskin predicts significant changes in labor and employment law even with a McCain victory. "The likely strengthening of the Democratic majority in Congress means that businesses can expect an avalanche of pro-labor measures, including: new Family and Medical Leave Act regulations, the Employee Free Choice Act, changes to the definition of supervisors and civil rights damages, and increased penalties for the misclassification of independent contractors. Many of these legislative initiatives will set the stage for a legislative/executive showdown and the multi-billion dollar question is whether the House and Senate leadership will be able to muster the votes to defeat a veto from President McCain."

Environmental: Industry Braces for Policy Shifts

"Prior to this election, environmental and energy policy have always been secondary issues," said Jud Starr, a former high-ranking environmental official at the U.S. Department of Justice and Chair of Venable's Environmental Practice. "We're telling our clients, whether they are concerned about climate change or energy independence or any of the related issues, that it isn't just campaign rhetoric this time, policy change is coming and they must be ready."

"Today, energy and environmental policy drive critical components of our national security and economic recovery strategies. They also serve as a key indicator of our international standing. The coming changes will be real and substantive, the only question is whether industry will have a seat at the table as the policy is crafted," said Starr.

Transportation: Bumpy Rides, in the Air and on the Ground

Former U.S. Transportation Secretary James Burnley, the leader of Venable's transportation practice, and one of the nation's foremost authorities on transportation issues, notes that FAA reauthorization depends very much on who is elected. "It should have been done last year; it isn't going to be done this year; and it absolutely should be completed next year. It is hung up over two labor issues and the clash between general aviation and the airlines over who pays how much in federal fees and aviation taxes."

"If Obama wins, and with a more Democratic Congress, the labor issues will be resolved. However, the fight between general aviation and the airlines isn't partisan and could still delay passage. If McCain wins, then all of the issues now holding the bill up will probably still be hurdles to final passage."

Highway Trust Fund Crisis: Into the Red, "with no obvious politically viable solution" in Sight

James Burnley also notes that the Highway Trust Fund is now in the red, leading to a looming infrastructure crisis on the nation's roads.

"Because Americans have started driving less and buying more fuel-efficient cars, the Highway Trust Fund, which is supported by fuel taxes, is in a crisis," Burnley said. "Congress solved the immediate problems in September by transferring $8 billion in general revenues into the trust fund. But there is a long term, systemic revenue crisis for which there is no obvious politically viable solution. Senator Obama has endorsed a $60 billion National Infrastructure Bank, but this cannot close the revenue shortfall to fund the existing commitments, much less support a bigger set of highway and transit programs."

"If Senator McCain is elected, I believe Congress will find he is very serious about the elimination of earmarks. We are likely to see a clash of epic proportions over that issue. That fight, in addition to the Highway Trust Fund systemic crisis, could greatly delay legislation," Burnley said.

Taxation: Zero-Sum Game On

Venable's tax commentators include Sam Olchyk, who spent eight years as Tax Counsel to the Senate Finance Committee and the Joint Committee on Taxation, along with Ray Beeman, who was Tax Counsel to the Joint Committee on Taxation.

"Democrats will be eager to put their own mark on tax policy after eight years of working around the edges of Republican tax cuts," Beeman said. "But their direction will be determined in large measure - and certainly more so than they would like - by a variety of outside forces. They simply will not be able to ignore the profound challenges facing our economy and the fiscal condition of governments at all levels, not to mention the coming crisis in entitlement spending for Medicare and Social Security that looms ever larger with each passing day."

"We can expect to see tax policy used as a tool to address concerns about income inequality in this country," said Olchyk. "Tax legislation is almost certain to become much more of a zero-sum game than it has been for many years now, for both individuals and businesses. While many companies have indicated a willingness to broaden the corporate tax base in exchange for lower rates, that is about the best outcome they can expect now."

International Trade: Difficult Times Ahead

Venable Senior Legislative Advisor Tiffany Moore, who helped shape U.S. trade policy until earlier this year as Assistant United States Trade Representative, says "Companies are understandably anxious about changes in the next Administration's trade agenda. Will it be punitive in nature or will it work diligently to open up markets for businesses big and small who provide good-paying jobs for Americans?"

"From a business perspective, trade agreements, such as those with Colombia, Panama, and South Korea, open up export markets abroad. Because exports now make up a greater share of gross domestic product (GDP) than at any other time, the next Administration should move quickly to approve these agreements in order to drive economic growth and restore a bipartisan consensus on free and fair trade. This will be incredibly difficult given the tilt of the incoming Congress. In fact, a President Obama or President McCain will most likely need to be a moderating voice of reason in the trade debate."

One of the American Lawyer’s top 100 law firms, Venable LLP has attorneys practicing in all areas of corporate and business law, complex litigation, intellectual property and government affairs. Venable serves corporate, institutional, governmental, nonprofit and individual clients throughout the U.S. and around the world from its headquarters in Washington, D.C. and offices in California, Maryland, New York and Virginia.