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CommentsA Mitt Romney presidency would have been good financially for the solid waste industry, but a second term for President Barack Obama won't exactly be a negative, according to an industry analyst.
Credit Suisse's Hamzah Mazari said a lower corporate tax rate, as Romney had proposed, would have been significant to the bottom line of many waste companies.
"With Romney in power, you would have seen [the tax rate] in the 25-26% range instead of the 30-35% range," he said. "That would have been a material earnings benefit for the solid waste guys, with Republic [Services Inc.] probably being the biggest beneficiary because their earnings are completely derived from the U.S."
But, a second Obama term isn't necessarily a negative, Mazari said.
"With an Obama administration, it's a net-neutral with a slight benefit to some players if he starts to push for greater environmental regulation, more renewable fuels, maybe more recycling or more CNG vehicles," he said.
Those issues, should they be pushed forward, would benefit Waste Management Inc. and Covanta Energy Corp., Mazari said.
Chaz Miller, head of advocacy for the Environmental Industry Associations, said the environment wasn't an issue in this election, and the big issue facing the industry, and all business, is how President Obama and Congress tackle the looming fiscal cliff.
"I think that's going to be key because just from a pure business perspective, you need economic certainty in the country," he said. "So the question becomes, what does Congress do to address the issue?"
One sticking point in the campaign early on was how to handle the U.S. EPA. Romney had pushed for less regulation, often calling for the end of its supposed "job killing" measures. John Skinner, CEO of the Solid Waste Association of North America, said it's likely the agency will move ahead with revising landfill emissions standards.
The revisions, expected in mid-2013, likely would have been killed if Romney was elected, he said.
"With the reelection of the president, I think they will continue," he said.
A landfill gas tax credit, set to expire at the end of 2013, still might have life, Skinner said. It was another measure Romney may not have supported.
"Gov. Romney said he was against extending the renewable energy tax credits while the president is in favor of extending the credits," he said. "I think there will likely be a compromise between the president and the House of Representatives [on the issue]."
A key to that issue will be wind energy tax credits and if they get extended during the lame-duck session, he said.
"If they are extended in the lame-duck session, I think the chances of the landfill gas and waste-to-energy credits extended in the following year are pretty good," Skinner said.
Obama has argued that the country needs a clean energy standard and it might be something he pushes for in a second term, he said.
"The Senate would generally support that, but [whether] they can get the House to go along with it, that's yet to be seen," Skinner said.
Billy Johnson, director of political and public affairs at the Institute of Scrap Recycling Industries Inc., said there may be a moderation in the amount of regulations that the EPA sets during a second term. Instead, the agency, along with Occupational Safety and Health Administration, will likely focus more on enforcing existing regulations.
"The threat of enforcement could potentially help the industry in a few ways," Johnson said.
He agreed with Miller that the lame-duck session is all about getting the so-called fiscal cliff in order.
"[Obama] has got to work with Congress," Johnson said. "He's no longer the fresh face in Washington. He's part of the problem and part of the solution. I think it's incumbent on him, as the incumbent president, to try to reach out and find common ground."
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