As default nears, lobbyists push legislation to favor clients

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Congress is often derided as being in the pocket of K Street lobbyists who use relationships with specific lawmakers to push through legislation favorable to their clients.

But as a contingent of new rank-and-file legislators appears unwilling to cement a debt deal while the default deadline approaches, the nation’s largest entrenched interests have pleaded with elected officials, with apparently little success, to come together and raise the debt ceiling.

Some 300 trade associations, corporations and nonprofits spent a combined $100 million lobbying on issues including the debt ceiling in the second quarter, disclosures filed last week show. That group is dominated by health insurance plans and pharmaceutical companies that fear the results of a Medicare disruption, followed by financial institutions that have struggled to educate Congress on the serious repercussions of default.

The warnings from business groups come as a stern rebuke to freshman tea party congressmen — many elected on platforms decrying K Street’s influence — who have threatened to allow the nation to default.

“Failure to raise the debt ceiling and the ensuing default and inability of our country to pay its bills as they come due would have harsh implications for the U.S. Dollar, the international and domestic financial system, economic growth, and job creation,” wrote lobbyists from the Financial Services Forum, a group comprised of executives from the nation’s largest financial institutions.

The discussions also have drawn offensives from groups that view themselves as easy targets in moving toward a balanced budget. Some have been left scrambling to influence legislation in a chaotic process that has left even members in the lurch, and issues only vaguely on the horizon have suddenly been sucked into a rapidly changing process that renders matters of primary importance to industry only details in a major package.

One such issue is a proposal to auction off excess airwave space television stations fear could crowd them out or shut them down. Industry government affairs experts had carefully tracked the plan as it slowly wound through congressional committees — before it appeared on the radar of debt negotiators to whom it could mean a quick $20 billion that wouldn’t require lawmakers to raise taxes or cut spending.

“There’d been some legislative proposals, but suddenly this got wrapped into the debt ceiling because in Washington, spectrum equals money. Whenever you auction some off, some money will come in,” said Dennis Wharton, vice president of the National Association of Broadcasters.

Even as financial groups told Congress to avoid default at all costs, though, for an industry that often drafts verbatim model legislation for lawmakers to consider, K Street has come up with as few coherent and specific plans as elected officials.

Many of its usual suspects worked to fight measures that could be a political necessity for any deal that is both passable and makes significant strides in balancing the budget. The Chamber of Commerce has played the most active role in lobbying Congress to increase the debt ceiling, but it also supports making permanent Bush-era tax cuts that are among the largest policy causes of the growing deficit.

Multiple groups representing the “corporate jet owners” frequently targeted by President Obama have actively lobbied to preserve their perceived tax loophole. Oil and gas companies have spent millions fighting to ensure that any compromise does not negatively impact their bottom lines.

The lobbying firm of Tarplin, Downs & Young has fought to exempt Medicare and Medicaid from any cuts on behalf of 13 pharmaceutical and other health clients, including the trade group PhRMA, that receive such reimbursements. Seven more are represented by Democratic powerhouse firm the Podesta Group.

But for others on K Street, gridlock in Washington has meant a standstill in efforts to influence legislation, and overall spending on lobbying declined from previous quarters. Read the second-quarter lobbying disclosure of Barrick Gold of North America, which spent $700,000 on lobbying last year: “No activity, as debate on the Debt Ceiling absorbed the process.”

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