Obama victory expected to help unions, auto companies

[Oracle of Delphi]

By Christopher S. Rugaber, The Associated Press

WASHINGTON - Barack Obama's victory in the U.S. presidential race will give labour unions and the embattled U.S. auto industry a strong ally in the White House, and likely will put pressure on oil and gas producers and pharmaceutical companies.

His election Tuesday also makes congressional approval of a fresh economic stimulus package - perhaps as large as $150 billion - more likely, economists said.

"There is a general consensus that some kind of stimulus plan is called for," said Ken Mayland, president of ClearView Economics.

The new president's biggest challenge will be to turn around an economy that many analysts already believe is in recession. A stubborn housing slump led to the worst U.S. financial crisis in 70 years, which has caused banks to reduce lending and consumers and businesses to sharply cut back their spending.

The economic slowdown, plus a ballooning budget deficit that by some estimates could near $1 trillion in the budget year that began Oct. 1, will restrict Obama's ability to make good on some of his more ambitious promises, such as expanding health care coverage and subsidizing alternative energy.

The Illinois senator has pledged to offset some expenditures by raising corporate tax rates and income taxes on families making more than US$250,000.

Obama is expected to move quickly to put his stamp on the huge $700 billion financial bailout Congress approved last month, analysts said.

Anil Kashyap, an economics professor at the University of Chicago's Graduate School of Business, said Tuesday that naming the next treasury secretary and his top deputies - who will oversee the bailout plan - should be the new president's top economic priority.

In return for the rescue plan, banks, insurance companies, hedge funds and the rest of the financial sector will almost certainly face a regulatory overhaul effort by the Democratic Congress next year.

Obama's reputation as a conciliator, meanwhile, will be sorely tested by the labour-backed Employee Free Choice Act, which would allow workers to form unions by getting a majority of employees to sign a card in support of a union, rather than through a secret ballot election.

Business groups such as the U.S. Chamber of Commerce fiercely oppose the measure because they say the elimination of the secret ballot would open up workers to intimidation and harassment.

The measure, supported by Obama and most Democrats in Congress, was approved in the House of Representatives last year but stalled in the Senate.

Meanwhile, Obama has promised to help Ford Motor Co., General Motors Corp. and Chrysler LLC by doubling a recently approved loan program to $50 billion to help the auto industry develop more fuel-efficient cars.

Oil and gas companies such as Exxon Mobil Corp. and Chevron Corp., however, could face a windfall profits tax, which Obama has promised to impose to pay for a $1,000 "emergency energy rebate" for families.

Also on energy, Obama proposes spending $150 billion over 10 years to speed the development of plug-in hybrid cars and "commercial-scale" renewables, such as wind and solar.

Under an Obama administration, pharmaceutical companies will struggle to defend the lucrative Medicare drug benefit, which pays for medications taken by 47 million elderly people.

Obama has pledged to allow the government to negotiate drug prices under the program directly with the pharmaceutical companies, saying it could save $30 billion.

Link: http://ca.news.finance.yahoo.com/s/0511200...-companies.html

[Camino LS6]

I don't think he has much of a choice about this, nor would McCain have had for that matter.

The auto industry is still vital to our economy and we can't afford for it to fail.

[longtooth]

Barack Obama ran partly on a 'Help Main Street/Health-care/Jobs' platform.

If Detroit plunges into the abyss, dragging all of those insured/employed people that 'benefit' directly or indirectly under the auspices of it's mere existence, the implications of failure for his nascent Administration would be manifest.

So I think all due haste will be made to fix this. Semper Gumby (always flexible)

[loki]

but he's going to help keep GM going , that evil corporation!....but he's helping the unions...still have jobs. YAY!!!! /sarcasm.

I want GM to stay afloat, but obviously the unions have not helped much in giving GM some extra breathing room.

[Intrepidation]

but he's going to help keep GM going , that evil corporation!....but he's helping the unions...still have jobs. YAY!!!! /sarcasm.

I want GM to stay afloat, but obviously the unions have not helped much in giving GM some extra breathing room.

Perhaps but they have given up a lot. Those giant paychecks teh executives get for keeping the company they are in charge of on the course of failing probably isn't any better.

[loki]

Perhaps but they have given up a lot. Those giant paychecks teh executives get for keeping the company they are in charge of on the course of failing probably isn't any better.

I can agree, everyone in the company, should try to help the company... not the fed.

[2005 EquinoxLS]

At least Obama mentions trying to do something to help our economy through the automakers. Bush and McCain dont even talk about it. I guess when you are rich like Bush is from big oil you dont need to worry. And own multiple houses like McCain does you dont need to worry either. I agree the executives could cut back and not ruin their precious rich lives.