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The effect of the midterm election results on restaurants

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This post is by SmartBlog on Restaurants and Restaurant SmartBrief contributor Janet Forgrieve.

Will the outlook for restaurants change post-midterm elections?

Many among the newly elected Republican House majority have hopes of repealing sweeping health care legislation, but the reality is that Democratic President Barack Obama wields veto power that will block most attempts. Obama did express willingness to discuss changes to certain areas of the bill, however, including a controversial new tax reporting regulation that would require businesses to file 1099 forms for any vendors to whom they’ve paid $600 or more during the year. The nonhealth related provision has generated plenty of buzz in recent months as more small businesses worry about the huge additional paperwork and record-keeping burdens that promise to come with it.

Time will tell whether the shift in control in the House will prove a win for the restaurant industry, which has taken an increasing financial role in supporting pro-business candidates and lobbying on key issues such as immigration reform and labor laws in recent years, according to, the Center for Responsive Politics’ site that tracks political contributions and lobbying expenditures. Restaurant companies and their trade groups and political action committees spent almost $10 million on lobbying efforts last year, more than twice the amount they shelled out in 2005. The industry hit a record in political contributions two years ago, kicking in more than $11 million to support mostly pro-business Republican candidates.

Immigration reform is one ongoing issue of interest for restaurants, as a lack of a strong federal policy has opened the door for states to craft their own, often punitive, policies, such as a law passed in Arizona that calls for imprisonment of anyone who can’t document his or her citizenship, followed by prosecution. A Senate bill put forward by Senate Majority Leader Harry Reid, which included a path to citizenship for some illegal immigrants — a provision the restaurant industry supports — stalled in this year’s session, but Reid promised just before the election to bring it up in the upcoming lame-duck session. If the effort doesn’t go anywhere before the end of the year, congressional Republicans are likely to address the issue with a stricter bill that doesn’t include citizenship opportunity for workers here illegally.

While many in the business community applaud the shift in power as a positive thing, if only because it promises to force more bipartisan cooperation on key issues, some say the newly Republican House and a Senate still under Democratic control may be a recipe for two years of gridlock.

Do you think the shift in power is likely to change anything for restaurant operators?