U.S. firms should expect more scrutiny under Obama

Analysis

WASHINGTON (Reuters) - Businesses should expect more scrutiny of their books, moves to expand health insurance, an end to no-bid Pentagon contracting and a host of other changes when President-elect Barack Obama takes office.

Obama, who will be sworn in on January 20, has supported the $700 billion rescue plan to inject liquidity in the U.S. financial industry, but has insisted that banks taking the money must accept rules.

In his first news conference after the election, Obama said he wanted Congress to pass another stimulus package, but gave little in the way of specific business initiatives.

He did indicate that help may be coming for General Motors Corp, Ford Motor Co and Chrysler LLC, which have been hobbled by the credit crunch.

"I have made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis, and succeed in producing fuel-efficient cars here in the United States," he said.

Among other appointees, Obama will name a new chairman of the Securities and Exchange Commission, which was criticized for inadequately supervising investment banks and not protecting investors.

"I think it will become a more robust agency with increased powers," said Rich Ferlauto, director of pension and benefit policy at the American Federation of State, County and Municipal Employees. "I think they will appoint a strong chairman."

The loss of trillions of dollars of shareholder value even as top executives walked away with hefty pay packages transformed executive pay into a bipartisan whipping boy.

Under pressure, the current White House did set some limits on executive pay as part of the government's costly rescue plan to thaw frozen credit markets. But even before the financial collapse, Obama supported moves to give shareholders more say on setting executive pay.

HIGH-TECH PREZ ELECT

Obama is expected to promote economic growth by encouraging building infrastructure for high-speed Internet use, and has vowed to create a new chief technology czar that may be at the Cabinet level.

"Making broadband available to everyone will be priority No. 1," for Obama, said Paul Glenshur, an analyst at Stanford Eagle.

Some have suggested the infrastructure piece of a second stimulus package could include incentives to develop and expand broadband. One growth area could be rural areas.

Expanding the universal service fund -- which phone companies pay into to subsidize service in the countryside -- to include broadband is seen as one potential mechanism to expand this broadband access.

On the campaign trail, Obama talked about the need to control the ballooning weapons' costs, review major Pentagon acquisition programs and end no-bid contracting. He also pledged to make changes to reduce budget overruns, schedule slips and product underperformance.