With cuts looming, lobbyists ready for new fight on U.S. spending

10/20/2013 6:51 AM

10/20/2013 6:52 AM

Throughout the tense fiscal deadlock in recent weeks, some of the most powerful forces in Washington - including retirees and defense contractors - largely sat on the sidelines. Now they are preparing for a political fight with billions of federal dollars at stake.

With automatic cuts to the military set to take effect by January and a separate round of cuts scheduled for Medicare, lawmakers will have to decide who gets hit the hardest. Washington’s lobbying machine - representing older citizens, doctors, educators, military contractors and a wide range of corporate interests - is gearing up to ensure that the slices of federal money for those groups are spared in new negotiations over government spending.

It is a debate that almost no one involved wants to have so soon after the nasty fight over the federal budget, which produced the 16-day shutdown and again failed to reverse the automatic cuts resulting from previous disagreements. But Congress managed to reopen the government and extend the nation’s borrowing limit largely by creating a new series of deadlines that run through February, giving special interests several chances to influence the process.

So far, the defense industry is likely to be hit the hardest since the automatic cuts, known as sequestration, set for January would slice an additional $20 billion from the Pentagon’s budget.

“It’s fair to say the volume in Washington is going to be deafening,” said Marion Blakey, chief executive of the Aerospace Industries Association.

Republicans on Capitol Hill are determined to mitigate those cuts by spreading them among various social programs, like education and Social Security, bringing dozens of other special-interest groups into the picture.

“The perfect storm is coming,” is how one health care industry lobbying coalition put it, in an advertisement, complete with dark clouds and lightning, that ran the day the shutdown ended. “Tell Washington, no more hospital cuts.”

AARP, the giant nonprofit group that represents older citizens, has kicked off a million-dollar radio advertising campaign warning that “Seniors are no bargaining chip.”

Sen. Bob Corker, R-Tenn., said he regretted that Congress had created a situation where another budget fight is about to begin - immediately after a crisis ended.

“I have to believe the American people are totally fatigued with this issue, and to be candid, I am pretty fatigued with it myself,” he said in an interview Friday. “It is almost an embarrassment to keep bringing it up.”

But at least, Corker added, the focus this time will be on how the government spends its money, a debate that he said is important to the nation at large.

Good for lobbyists

For lobbying firms, fights like this are good for business. Their revenues have dropped over the last two years because little legislation has moved forward. Now industry lobbyists say they see hints that this is the right moment to re-engage.

Health care industry lobbyists hope to seek a permanent fix to the annual threat of major cuts in the compensation paid to doctors who treat Medicare patients, like the 25 percent cut scheduled to take place again in January. At a minimum, they will seek to have the 2014 cut reversed.

Separately, major American corporations like the Silicon Valley tech giants are once again preparing to intensify their campaign to persuade Congress to pass a comprehensive immigration law, an effort that has been dormant since late spring.

That will include a late November “Hackathon” that will bring together executives and immigrants without work documents to contact members of Congress to push the cause. Technology companies want immigration legislation that would expand the number of visas issued to foreign workers who can fill engineering jobs.

At the same time, many of the major business groups - including the National Retail Federation and the National Federation of Independent Business - plan to push for modest changes in President Obama’s health care law. They are convinced that the defeat of the Republican plan to defund the law has presented them with an opening to seek revisions, like changing the definition of a full-time worker who is entitled to health insurance to one who works 40 hours a week, up from the 30 in the law.

“This is the time to turn up the heat,” said Neil Trautwein, a lobbyist with the National Retail Federation.

Corker said he was not sure that the White House or Democrats on Capitol Hill, fearful that Republicans might try again to curb or repeal the law, were ready to open it up to revision. But that is not going to prevent many of the industry groups from trying.

Long push

The lobbying push is likely to continue at least until early next year, before Congress again gets distracted by coming elections. It will mean competing radio and TV campaigns, millions of emails and Twitter messages, and rival groups organizing trips to Washington by business executives or direct appeals in congressional districts.

The lobbying factions will not, in most cases, be attacking one another. But with Republicans insisting that they will not back down from spending limits set by the 2011 sequestration legislation and rejecting calls by Democrats for new tax revenue, the cuts will almost certainly have to hit some interests, creating unavoidable conflict.

“Everybody who has a piece of pie is now going to try to protect their piece of the pie,” said Steve Elmendorf, a former House aide who now runs a Washington lobbying firm that represents the defense and health care industries.

Joel Packer, the top lobbyist for the Committee for Education Funding, spent last week giving a series of pep talks to education officials across the United States, urging them to get involved.

Even before the government shutdown, realizing this battle was fast approaching, education officials organized by the group held a rally in Washington featuring a mock bake sale, which they followed up by distributing bags of cookie crumbs to lawmakers’ offices on Capitol Hill. “No More Budget Crumbs for Students and Education!!” said a flier promoting the effort.

Packer will continue the push this week, with a gathering in Washington that will feature more than 100 presidents and other top officials from community colleges nationwide.

Elsewhere on Capitol Hill there will be defense industry executives, including Gregory Bloom, chief executive of Seal Science, a small California contractor, who will meet with lawmakers to push them to block defense cuts.

“Our national security has become a pawn in the chess game,” Bloom said. “But everyone needs to remember that the government’s No. 1 responsibility is still to protect its people from enemies, domestic and abroad.”

All these appeals will make it easier for lawmakers to get the fundraising machines revved up again. Many events were canceled during the shutdown, as it seemed in bad form to take checks from lobbyists with thousands of federal employees out of work.

The Senate majority leader, Harry Reid, D-Nev., was in Florida on Friday for one such event, where donations of as much as $35,000 were solicited, while the National Republican Campaign Committee has scheduled its own fundraising event in New York on Oct. 30.

Rep. Steve Israel, D-N.Y., chairman of the Democratic Congressional Campaign Committee, said lobbyists needed to remember that the budget debate was about the nation’s priorities.

“They have the right to be vocal,” he said of the lobbyists, in an interview Friday. “But this process can’t be a special-interest bazaar.”

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