N.J. business takes wait-and-see approach after Obama victory
While President Barack Obama's re-election has given industry leaders across New Jersey's business landscape some clarity about what lies ahead in the next four years, several looming issues could extend employers' wait-and-see period for investment and hiring plans into his next term.
"If I went to sleep on Monday night and didn't wake up until Wednesday morning, nothing would be different. We have the same group of national leaders in place and the same gridlock in Washington," said Tom Bracken, president of the state Chamber of Commerce. "There were a lot of uncertainties with taxes, energy and the fiscal cliff that's staring us in the face from the group in office before the election, and the group hasn't changed. If we're going to 'move forward' and rebuild the economy, the group has got to change their attitude and focus and eliminate red tape."
While stakeholders in the health care and biotechnology industries agree that Obama's re-election sends a full-speed-ahead signal to implement the 2010 Affordable Care Act, they don't have a clear vision about how New Jersey will embrace it, especially in terms of creating a health insurance exchange.
By Nov. 16, the state must choose whether it will run its own exchange or turn the job over in whole or in part to the federal government, and public- and private-sector leaders agree the decision is resting on Gov. Chris Christie's shoulders.
State Sen. Joseph F. Vitale (D-Woodbridge), chair of the Senate health committee, said he believes New Jersey will maintain at least partial control of its exchange, because turning the task to the Obama administration "would not be in (Christie's) interests or in the state's interests, and (Christie) has always said he will do what is in the state's interests."
In terms of implementing the health care reform pieces of the Affordable Care Act, Joseph A. Trunfio, president and CEO of Atlantic Health System, said the driving forces behind it — including rising costs and increased access needs — were in place regardless of the election outcome, though he noted the continuity in both the direction of policy and the federal government's infrastructure will accelerate the work already being done.
In New Jersey, Trunfio said health care providers are on pace with implementing changes to delivery of care, but the regulatory processes could potentially be delayed into Obama's next term.
Debbie Hart, president of the trade group BioNJ, said looming regulatory issues following the election also apply to the pharmaceutical industry, as changes to Medicare and the Food and Drug Administration's implementation of a regulatory pathway for biosimilar drugs — or generic forms of biologic drugs — still remain uncertain.
In the state's real estate industry, experts worry about the impact of federal policy in areas related to capital gains taxes and financial regulation will have on property investments.
Gil Medina, executive managing director of Cushman & Wakefield's New Jersey operations, said Obama had promoted a plan that would raise the tax rate on capital gains for higher earners, while Romney called for maintaining the current 15 percent rate.
"That's a potential area where investment in commercial real estate could be impaired and impacted, if this rule is implemented," Medina said. He added, however, that such a change may be difficult because control of Congress is still divided.
Real estate watchers also will monitor how the federal government implements banking regulations under the Dodd-Frank reforms, Medina said, now that efforts to repeal the law may have died with Romney's candidacy.
For residential real estate, a key issue could be the future of the mortgage interest deduction for homeowners, said Peter Reinhart, director of Monmouth University's Kislak Real Estate Institute. As federal lawmakers look at various tax cuts, reducing or eliminating the deduction is always a possibility but that would "affect the affordability of housing in a negative way," he said.
"A strong housing industry is so important to the overall economic recovery," Reinhart said, pointing to widespread beliefs that any policy that would stop the housing recovery "would probably be a mistake."
While Michael McGuinness, CEO of NAIOP New Jersey, said he's optimistic that Obama and Congress will be more focused on fixing the economy after campaign season, Bracken said businesses aren't seeing any signs of anything being accomplished in Washington over the next four years — though he noted the federal government could learn a thing or two from New Jersey's public leaders.
"With Hurricane Sandy having hit New Jersey and leaving municipalities to deal with destroyed infrastructure, the governor and (state Department of Environmental Protection Commissioner) Bob Martin told municipalities to fix their roads now and worry about getting permits later — and that is a great step forward," Bracken said. "That kind of focus and attitude to get things done is what we need more of from Washington."
Contributing: Joshua Burd, Melinda Caliendo, Katie Eder, Beth Fitzgerald, Jared Kaltwasser