Democratic Majority Would Shift the Workforce Debate

If the polls and pundits got it right, Democrats will wake up Wednesday with control of the House. And, perhaps, the Senate.

A shift in leadership would usher in a new agenda for workplace issues and shift the policy debate toward low-income workers, Americans who lack health insurance and legislation backed by unions. The impact on employers would depend on how big a margin Democrats have secured.

The party has put four issues that involve the workforce at the top of its priority list for the “first 100 hours” of its projected House leadership—raising the minimum wage, restoring Republican cuts to higher education, providing incentives for retirement savings and negotiating with drug companies to lower Medicare prescription costs.

Sometimes, of course, the electorate fools the pundits. If the Republicans do stay in power, they likely will continue to pursue policies that flesh out President Bush’s “ownership society” theme by promoting individual control of benefits. An instance of that was evident in September, just before the congressional recess, when the House Ways and Means Committee approved a proposal to increase annual contributions to HSAs. Also, Republicans advocate job-training programs that give the unemployed flexibility to choose their courses through one-stop career centers.

Assuming that the Democrats win, they are likely to move immediately to raise the federal minimum wage from $5.15 to $7.25. Over the summer, Republicans folded that proposal into a bill that included the permanent elimination of the estate tax. Democrats balked, saying the hike shouldn’t be tied to what they called a tax cut for the rich.

Boosting hourly pay is one step Democrats hope to take toward raising household income to match productivity gains.

“If we win a majority of seats in the House this November, we will work to ensure that all families benefit from a growing economy,” says Rep. George Miller, D-California, the ranking member of the House Education and the Workforce Committee. Miller likely would become chairman of the panel in a Democratic House.

Democrats also will pursue their Innovation Agenda, which calls for graduating 100,000 new scientists, mathematicians and engineers over the next four years, investing in scientific and medical research like stem cells, establishing universal broadband access and achieving energy independence.

On health care, Democrats will resist President Bush’s push to expand health savings accounts.

“HSAs are not health policy, they’re tax policy, and we’re shifting more of the health burden onto workers,” Rep. Pete Stark, D-California, said at a House Ways and Means Committee hearing in September.

Stark, who asserted that tax breaks for HSAs would be better spent on expanding health coverage for children and seniors, would likely become chairman of the Ways and Means health subcommittee. He also is advocating a proposal aimed at achieving universal health coverage by establishing a program to provide insurance to people not covered by employers.

One analyst says Democrats would be loath to advocate a government-based health care proposal like the one that foundered during the Clinton administration. But they may try to facilitate state efforts to force employers to provide coverage.

A Maryland judge shot down that state’s so-called Wal-Mart bill because he said it violated the Employee Retirement Income Security Act, which ensures that multi-state employers can offer the same benefits package to all of their employees. More than 30 similar measures are percolating in state legislatures nationwide.

Democrats “would weaken ERISA to the point that it would enable these state-by-state health care reform initiatives to move forward,” says Bruce Davis, a principal at Findley Davies, a consulting firm in Toledo, Ohio.

Setting the agenda
The political equation may not add up to a decisive change on Capitol Hill. For one thing, many of the Democratic candidates who are trying to unseat Republicans are running to the right of their party’s Washington leadership. So, it’s a good bet that they won’t roar into the Capitol raring to implement a liberal agenda.

Besides, if Democrats win, they’re not likely to achieve a House majority that’s even as big as the Republicans’ current 15-seat advantage. That means they’ll have to scramble—and compromise—for votes.

Democrats are less likely to gain control of the Senate. But the political atmosphere has grown so bad for the GOP that many political observers believe that the Senate is within reach.

Even if Democrats control both chambers, Bush will remain at the other end of Pennsylvania Avenue—with his veto pen in hand.

“In order to get anything done, we’re going to have to have tight majorities, which means that legislation that emerges from either party is likely to be more moderate,” says Mike Aitken, director of governmental affairs for the Society for Human Resource Management.

On the other hand, the fierce partisanship that has defined the midterm elections may carry over into the Congress and bog down the legislative process.

“The desire to sharpen party differences for the 2008 presidential race militates against compromise,” says Geoff Manville, a principal in the Washington office of Mercer Human Resource Consulting. “We’re in for a session of stalemate.”

The difference for Democrats, if they take over the House, is that they will be the protagonists in the drama. They’ll set the agenda while the Republicans push back. The GOP has warned that Democratic control of the workforce committee would result in higher taxes, new employer mandates and more government influence on business.

Although a small difference in the number of Democrats and Republicans in the House would make for close votes, the ability to move legislation to the floor is solely under the purview of the majority party. If Democrats win, they will wield a parliamentary mechanism that they have not enjoyed since 1994. The party will control the Rules Committee, which determines the House agenda and sets limits on how a bill can be amended.

That means legislation under which a union could be authorized if a majority of workers sign cards would almost certainly come to a vote before the full House. The bill already has 216 co-sponsors, some of whom are Republicans.

Unions have made the so-called card-check bill, titled the Employee Free Choice Act, a legislative priority. The Republican majority has blocked that bill while promoting its own legislation that would require that every union vote occur by secret ballot.

Another bill that may get a boost from a Democratic majority is a measure that would make it illegal for a corporation to eliminate retiree health benefits. Right now, the legislation has about 60 co-sponsors, all of whom are Democrats.

It’s not clear whether the measure would be a priority for a Democratic majority, but its journey to the floor would be smoother in a Democrat-led workforce committee.

Committee control
By gaining committee power, Democrats would be able to frame the policy discourse in a way that eludes them in the minority.

Elisabeth Gehl, director of public policy for Business and Professional Women/ USA, says that Democrats would be more inclined to expand the Family and Medical Leave Act and consider the Healthy Families Act, a piece of legislation that would provide paid sick leave for those who don’t have it.

If Sen. Edward Kennedy, D-Massachusetts, were to become chairman of the Senate Health, Education, Labor and Pensions Committee, workplace flexibility likely would become more prominent.

“One of the big differences is that some of these bills would get committee hearings,” Gehl says. “Hearings get the issue out there and talked about.”

Advocates of comprehensive immigration reform are hopeful that under a Democratic majority, the House might produce legislation that is closer to the Senate’s package, which includes increasing legal immigration and providing a path to legalization for many undocumented people. The House version focuses solely on border security and workplace enforcement.

“If the Democrats control the House, it will have the positive effect of putting us in a better position to move the issue forward through committee,” says Angela Kelley, deputy director of the National Immigration Forum, a pro-immigration nonprofit.

Yet even if they’re empowered on House panels, Democrats won’t be able to accomplish much alone. That’s why Paul Miller, executive director of ProtectSeniors.org, is reaching out to Republicans on the retiree health benefit bill.

“We’re looking for a bipartisan approach,” he says. To appeal to the GOP, he’s highlighting provisions that would help companies that face financial hardship in maintaining their retiree programs.

On one issue that is increasingly important to corporate executives—education—Republicans and Democrats already seem to be moving toward harmony. Company leaders see education reform as the key to improving the U.S. labor market. Next year, the No Child Left Behind law, which is designed to improve school standards, will be up for reauthorization.

Reps. Miller and McKeon, appearing together at a recent Washington event sponsored by the Business Roundtable, were on the same page. “This should not be a partisan issue,” McKeon says.

Those words no doubt were reassuring to Arthur Ryan, chairman and CEO of Prudential Financial and chairman of the Business Roundtable’s Education and the Workforce Task Force.

“We need a skilled workforce,” he said. Manual labor is no longer enough to keep a family going, he said. “You have to use your brain.”

If solutions to challenges facing employers are going to emanate from Washington, the more Miller and McKeon cooperate, the better—no matter who’s in charge.

—Mark Schoeff, Jr.