Bush win seen as boon to many industries

NEW YORK — President Bush’s victory in Tuesday’s election is shaping up as a potential bonanza for Wall Street, where firms are salivating about the possibility that he will follow through on his pledge to allow private investment of Social Security funds.

A second term for the Republican president also makes it likely drug makers can head off government-mandated price controls for now. The defense industry also looks like a winner, more regulatory victories may be in store for the Baby Bells, and look for a new push for oil drilling in the Alaska wilderness.

While the privatization of Social Security has taken a back seat in this current election, experts predict the president will work with congressional Republicans, who boosted their majority in both houses, on what would be the most dramatic changes in the government retirement program’s 69-year history. In addition, the president has gone on record as supporting an increase in medical savings accounts for individuals.

Banks, investment firms, mutual fund companies and insurers, of course, would offer to help individuals manage these new private retirement investments, which could lead to billions of dollars in new funds under their control and higher profits if legislation clears Congress.

Here is a rundown of economic sectors:

Drug makers: Status quo is good news for drug makers and investors in the stocks of companies like Pfizer Inc. and GlaxoSmithKline PLC, which were facing the potential of much tougher oversight on pricing under a John Kerry presidency. Consumer advocates counter that that’s bad news for average Americans.

Industry analysts say that with Bush in the White House and Republicans increasing their control of Congress, government price controls for prescription medicines won’t be on the table. The free-market system, where demand drives price, will continue, said Barbara Ryan, a pharmaceuticals analyst and managing director at Deutsche Bank Securities.

Still, Bush may have to budge slightly on one of the most contentious issues for the industry, allowing reimportation of cheaper prescription drugs. “Reimportation may actually happen under Bush,” said pharmaceuticals analyst Tony Butler of Lehman Brothers, “but only from Canada.”

Health care companies: Businesses have identified soaring health insurance costs as the most critical issue facing them today, but proposals by Bush aren’t likely to immediately slow the growth in spending for both companies and their employees.

This year, employers will pay on average of almost $7,300 for their share of the cost to insure a family of four and $3,137 for single coverage, according to the survey by the Kaiser Family Foundation and Health Research and Educational Trust. Premiums also rose for the fourth straight year at a double-digit increases rate.

The president also is expected to renew his push for legislation that provides tax benefits to businesses and their employees if they contribute to Health Savings Accounts.

Energy: The president is likely to call on Congress to revive stalled legislation that would have allowed private companies to search for oil, coal and natural gas on federal lands currently off limits to exploration and production, including Alaska’s Arctic National Wildlife Refuge. Such a move, part of Bush’s plan to reduce the country’s rising dependency on imports, could benefit large petroleum producers such as BP PLC, Anadarko Petroleum Corp. and Devon Energy Corp.

Bush also wants to make it easier for the oil industry to build new refineries. There hasn’t been a new refinery built in the United States in 28 years and the industry complains about meager profit margins, hefty environmental costs and too much government regulation.

Bush will push Congress to require reliability standards for power lines and provide incentives for new power line construction, measures that are widely backed among power producers, such as American Electric Power Company Inc., and makers of power grid equipment.

Defense and technology: Government technology spending will likely continue to be concentrated on defense and homeland security, with a question mark hanging over promises of an ambitious space program.

During Bush’s first term, federal spending on research and development rose more than 50 percent, jumping from $84 billion in 2000 to $126 billion in 2004. Most of that money— $71 billion in 2004 — was spent on research and development for defense, said Kei Koizumi, director of the budget and research policy program at the American Association for the Advancement of Science.

Another $4 billion went to research and development for homeland security.

The administration spent billions on missile defense and is likely to plow more into continued research and deployment of missile defense systems, which will benefit Boeing Co., Lockheed Martin Corp., Raytheon Co. and Northrop Grumman Corp.

Autos: The Bush administration has instituted a slight increase in fuel-economy standards for light trucks — a minimum fleet average of 22.2 miles per gallon by 2007, up from 20.7 mpg — but maintained the standard for cars at 27.5 mpg.

Automakers, in general, oppose government-mandated changes in fuel-economy standards. Still, some analysts say the combination of high oil prices and environmental concerns may force the second-term president to push for more aggressive measures on fuel economy. He already has proposed increased federal support for the development of advanced technologies such as hydrogen-fueled cars.

Telecommunications: Michael Powell is expected to step down as chairman of the Federal Communications Commission after leading the agency to a series of deregulatory decisions that benefit the regional Bell telephone companies. President Bush’s replacements for Powell and a Democratic commissioner who’s term is up will ensure a continuing GOP majority, leading to further deregulation with a goal of bridging the digital divide more quickly.

Freed of an obligation to lease new fiber lines to rivals such as AT&T Corp. and MCI Corp., three of the four Bells — Verizon Communications Inc., BellSouth Corp. and SBC Communications Inc. — said last month they were accelerating plans to replace copper wires with speedy fiber-optic cables which can deliver high-speed Internet access to more homes, schools and businesses.

Transportation: Bush wants to keep funding for highways and Amtrak relatively limited, and both he and the Republican majority in Congress seem unwilling to offer any more financial assistance to the ailing airline industry.

Bush wants to spend $256 billion on highways over the next six years, about $60 million less than Kerry said he would seek. Bush has proposed spending $900 million on Amtrak, about 30 percent less than Kerry, and privatizing parts of the financially struggling railroad. He would also like to eliminate the railroad’s unprofitable long-distance lines.

As for the airline industry, the Bush administration supported $10 billion in loan guarantees and $5 billion in emergency funding after the Sept. 2001 terrorist attacks, though no further bailout is expected.