Old Friends Depart, New Ones Arrive

Changes in the makeup of Congress will have implications for direct marketers.

Several congressmen who have supported direct and Internet marketing causes were defeated in last year's election, including Sens. John Ashcroft, R-MO, and Spencer Abraham, R-MI.

However, Ashcroft has been nominated for attorney general by President-elect George W. Bush.

Ashcroft has spoken against Internet taxes and government regulation of the Internet. In 1998, he joined a majority in Congress in voting for the Internet Tax Freedom Act, which placed a three-year moratorium on new federal, state and local Internet taxes. President Clinton signed the act into law.

Abraham also was an integral part of the initial effort to pass a moratorium on new Internet taxes.

However, Congress gained two potential friends of the industry: Sens. Ben Nelson, D-NE, and John Ensign, R-NV. The Direct Marketing Association supported them in their campaigns, and both are on the DMA's side on Internet tax issues.

Congress also named several new House committee chairmen who will have an effect on direct marketers. The new chairmen were named as a result of retirements and rules instituted by the House Republicans in 1994 limiting committee chairmen to six-year terms.

Most importantly, Rep. W.J. “Billy” Tauzin, R-LA, formerly the chairman of the House subcommittee on telecommunications and consumer protection, was named chairman of the House Committee on Energy and Commerce, formerly called the House Commerce Committee. This committee has jurisdiction over the Federal Trade Commission, the Federal Communications Commission and most telemarketing and Internet-related issues, as well as various privacy issues.

Tauzin replaces the retired Rep. Tom Bliley, R-VA.

“Tauzin is pretty knowledgeable on privacy, caller-ID and telemarketing issues, especially since he's been chairman of the relevant subcommittee,” said Roscoe P. Starek III, senior vice president of catalog issues at the Direct Marketing Association.

Jerry Cerasale, the DMA's senior vice president of government affairs, said that while Tauzin does not always agree 100 percent with the DMA, “he is very aware of the industry and wants to try and create some sort of balance, generally.”

While the commerce committee has added energy to its jurisdiction, it no longer has jurisdiction over securities and insurance. This will be handled instead by a new committee replacing the House Banking Committee called the House Committee on Financial Services.

Rep. Richard H. Baker, R-LA, chairman of the subcommittee on capital markets, securities and government-sponsored enterprises, said the creation of the new financial services committee “reflects an effort founded entirely on sound public policy. An increasingly integrated financial services market will be mirrored appropriately by a single integrated financial services committee, with the effect, I trust, of demonstrating Congress' understanding of markets and our desire to promote the interests of every American consumer.”

The House Banking Committee had jurisdiction over the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, which President Clinton signed into law in November 1999.

The law allows banks, insurance companies and securities brokers to enter into each other's businesses and permits the sharing of customer information among financial institutions under the same corporate umbrella. It also sets parameters by which banks, insurance companies and other financial institutions can use and share information about their customers.

Direct marketers who offer products to bank customers applauded the privacy provisions in the bill.

Rep. Michael G. Oxley, R-OH, who was formerly a member of the commerce committee, now is chairman of the financial services committee. Oxley is also supported by the DMA and is a prominent ally of the credit card and insurance industries.

Rep. F. James Sensenbrenner Jr., R-WI, who has also supported the DMA's position on Internet tax, will chair the Judiciary Committee, which also oversees many aspects of privacy policy as well as Internet tax. Rep. Henry Hyde, R-IL, formerly held this post; he now will head the Committee on International Relations.

Rep. Dan Burton, R-IN, is still chairman of the House Committee on Government Reform, which oversees postal legislation, including sweepstakes policy.

However, the House subcommittee on the postal service is still up in the air and probably will not be decided until the beginning of February. Under House rules, Rep. John McHugh, R-NY, must step down as chairman, although he could be granted a waiver by the leadership. It is also possible that the subcommittee could be eliminated altogether and its functions folded into another subcommittee, such as civil service.

It is not clear whether there is another House member who would take up the cause of postal reform, although insiders said chairmanship may be given to Rep. Ben Gilman, R-NY, who was chairman of the former House Post Office Civil Service Subcommittee.

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