Industry Optimistic About Obama

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TORRANCE, Calif. — Not-withstanding the specter of a “tax and spend liberal” assuming the White House, the electronic security industry stands cautiously optimistic about the incoming Obama administration.

When asked to gauge their expecta-tions of Obama, sources interviewed for this story say they anticipate the President-elect will tackle economic concerns first and foremost, allowing contentious labor and tax issues instead to take a backseat.

Donald Erickson, director of gov-ernment relations for the Security Industry Association (SIA) says one advantage to single party control of the White House and Congress is that appropriations bills can be expected to pass on time. Erickson believes that, in general, homeland secu-rity spending will increase under Obama.

“My personal opinion is the Democrats tend to be a little stronger, gener-ally speaking, on funding some of the programs that the electronic security in-dustry cares about, like port security, like transit security and school programs,” he says. “Had McCain won, I think it would have been Bush all over again in terms of cutting some of these programs.”

Erickson met with an Obama homeland security advisor in recent weeks and was told the President-elect intends to make cyberspace and IT security a top priority.

“If Obama chooses to put more funding into cyber security it potentially could lead to additional funding for HSPD-12,” Erickson says. “Because of the whole security convergence phenomenon, and with everything riding in IP networks, obviously that would be a great thing.”

For integrators doing business with Uncle Sam, and other state and local agen-cies, the Obama administration is seen as potentially increasing government security spending, says Lynn de Seve, founder and president of GSA Schedules Inc., a government contracting consulting firm.

“My phone is ringing off the hook with people wanting to get GSA contracts because with commercial business being down or flat they think there is going to be a lot of government activity,” de Seve says.

Many in the electronic security in-dustry, suppliers and security contractors alike, are also closely watching Obama’s Cabinet appointments and other Congressional positions that could impact business.

“People are anxious to see who some of the new people are going to be. I don’t mean at the highest level, but who will be the people influencing the real decision-making affecting our industry at the sub-Cabinet level,” Erickson says.

One recent development viewed favorable by the security industry is Rep. Ed Towns (D-N.Y.) assuming the chair of the House Oversight and Government Reform Committee, replacing Rep. Henry Waxman (D-Calif.). Towns fervently supported the “Local Preparedness Acquisition Act” that allows state and local governments to buy security products at GSA-approved reduced prices, which ultimately became law.

“We are all hoping the Local Preparedness Act will help create business, and it should especially help integrators,” says de Seve. “I believe the Obama administration will absolutely support it because it is in favor of small business and the everyday man that everyone keeps talking about, like Joe the Plumber. Well, how about Joe the Security Integrator?”

There are, indeed, tax decisions yet to be made that are looming over the business community. Obama campaigned on maintaining the estate tax at 45 percent after the first $3.5 million, and increasing the capital gains rate from 15 percent to 20 percent.

Capital gains, in particular, is paramount in the minds of security business owners, says Raymond Lynn, vice presi-dent of Sandra Jones and Co., who provides valuation and financial services to dealers and integrators. A rate hike could cut into the profit from the sale of a security firm, a concern that may motivate some owners to hasten the sale of a busi-ness to beat the coming changes, says Lynn.

While thoughts of tax increases and union-friendly legislation continue to spook business owners, comfort is being taken in Obama’s insistence for quick passage of an economic stimulus bill. Considering the dire state of the economy, sources interviewed for this story say the Obama administration ought to and likely will delay his promised tax hikes on couples earning more than $250,000.

“He may decide one day soon that those taxes are necessary. I don’t have a problem with that because things cannot get much worse,” says Gene Riddlebaugh, president of the National Alarm Association of America (NAAA). “If that is what they deem necessary to fix the economy, then go for it.”

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About the Author

Rodney Bosch, Senior Editor

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Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.