Election Brings Uncertainty to Big Advertisers

Tax Reform Could Return to the Fore

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The midterm election that resulted in the ouster of many Democrats has also created uncertainty among the nation's top advertisers about whether the new faces on Capitol Hill are friends or foes.

"The world has changed," said Dan Jaffe, top lobbyist for the Association of National Advertisers. "This is like an earthquake has hit and you don't know how strong the foundation is."

Mr. Jaffe said key loses for the ANA include allies like Sens. Mark Pryor, D-Ark., "someone we considered a friend," especially since he agreed with the industry on privacy issues.

It's also not clear who will take over key commitee chairmanships and other posts that had been held by outgoing Democratic senators including Jay Rockefeller of West Virginia, Tim Johnson of South Dakota, Carl Levin of Michigan and Tom Harkin of Iowa. Their committee jobs will now go to Republicans.

Add to that the losses of so many Democratic incumbents in the House and Senate and their replacement by Republicans who don't yet have a record ton the issue the industry cares about and it's "uncertainty squared," Mr. Jaffe said.

"No one knows what's going to happen," he said.

GOP control of both chambers may make it more likely the next Congress will take up tax reform, Mr. Jaffee said, especially since President Obama has indicated willingness to work on the issue with Republican congressional leaders.

Both the House and Senate have produced proposals that would limit the tax deductibility of advertising expenses, albeit spreading the changes over years. Rep. Paul Ryan, R-Wisc., the likely new chairman of the Ways and Means Committee, has said those proposals are still on the table.

Committee assignments will be announced in December. In the meantime, Mr. Jaffe and other lobbyists for the industry will reach out to new lawmakers and hope they are sympathetic to the concerns of advertisers.

"We knew the results of this election could change the face of Congress, and now that the election is over, it is time to get to work on a range of bipartisan issues," the ANA said in a statement last week.

The ANA said those issues include online privacy, monitoring ICANN's continued rollout of new online domain names and the Children's Food and Beverage Advertising Initiative, a voluntary program of the food and advertising industries intended partly to stave off federal restrictions on advertising to children.

The ANA also said "we urge Congress to actively oppose any tax on advertising."

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