The Stakes In The '86 Elections

This month, all eyes are on the Senate, where a Democratic victory would put business interests on the defensive. Would this be the end of the Reagan revolution?

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Ronald Reagan's "Morning in America" theme played well in 1984, when the economy was booming, jobs were plentiful, and Americans were "standing tall" in bars and boardrooms across the land.

But things are a bit different now. It may be morning in some parts of the country, but in regions heavily dependent on oil, textiles, mining, timber, and farming, it seems more like twilight. And should the have-nots express their economic frustrations at the polls, it could signal an end to the Reagan revolution and to the fundamental realignment of American politics that the Republicans have been talking so much about.

In this most political of months, all eyes are on the U.S. Senate, where the Republicans now enjoy a 53-47 majority, their first since 1954. Of the 34 Senate seats up for grabs this month, 22 are now held by Republicans, including 16 incumbents swept into office in the Reagan landslide of 1980. And of those 16, 14 hail from such economically troubled states as South Dakota, Idaho, Iowa, and Oklahoma. A loss of only 4 seats would put both houses of Congress in the hands of the Democrats and leave a lameduck President politically isolated.

For business, the stakes are enormously high. Although control of the Congress will not give Democrats a free hand in setting national policy -- the Democrats are almost as good at disagreeing with one another as they are with Republicans -- it will allow Democratic leaders to compete with Reagan in setting the national economic agenda. With an eye on the White House in '88, the Democrats would rush to hold a well-publicized series of oversight hearings, highlighting the failures of the Administration in cleaning up the environment, balancing the budget, and protecting American workers from uncaring employers and unfair foreign competition. In a Democratic Congress, Reagan initiatives could be more easily stalled or modified, and nominations to federal agencies more easily set aside.

In the House, the Democrats may increase their 71-seat majority, but their program will probably change very little. Much will depend on the new Speaker of the House, Jim Wright of Texas, whose political agenda is defined by the three Ps: populism, protectionism, and public works.

More dramatic would be the changes in the Senate, where even a bare Democratic majority would put ambitious and strong-willed liberals back in control of the Senate's powerful committee system. Here's a look at those Democratic chairmen-in-waiting, and a committee-by-committee look at what their return to power is likely to mean for American business.

COMMERCE, SCIENCE, AND TRANSPORTATION.

Missouri's John Danforth would hand over his gavel to Democrat Ernest "Fritz" Hollings of South Carolina, who has aspired at different times to be Senate majority leader and President and is always a viable Vice-Presidential possibility.

One immediate result of Hollings's chairmanship would be the almost certain death of product-liability reform, which Danforth was never able to steer through the Republican Senate. A trial lawyer by training and a states' righter by inclination, Hollings defends the authority of the 50 states to write their own liability statutes and the right of trial lawyers to bring whatever lawsuits they think are in their clients' best interests. Hollings is also an archfoe of the insurance industry, and he suspects it is the insurers, not the attorneys, who are responsible for any liability-insurance "crisis."

It is also the Commerce Committee that, under both Democrats and Republicans, has led the way on deregulation of the transportation industry -- railroads, airlines, and trucking. But Hollings, who has called himself a "born-again regulator," thinks it has all gone too far, particularly in aviation. The senator believes airlines are neglecting safety, engaging in damaging price wars on popular routes, and gouging passengers on noncompetitive small-city routes, such as those that take him home to his own Charleston, S.C. An aide, however, concedes that Hollings's inclination to reregulate will be held in check by fellow committee members from both parties, who might agree to adjustments to the policy of deregulation, but not to a wholesale retreat.

BANKING, HOUSING, AND URBAN AFFAIRS.

Wisconsin's William Proxmire used to be chairman, and he would probably be again, taking over from Utah's Jake Garn. Proxmire would inherit more than a committee, however. He'd inherit a hornet's nest.

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