So much for the August recess. Congress may be getting one, but not the folks paid to influence the institution. After months spent watching the debt-limit debate from the sidelines, Washington’s lobbyists are racing to understand—and figure out how to influence—the newly created committee charged with slashing $1.5 trillion in federal spending by the end of the year.
The size and scope of the task appear unprecedented. The closest comparison, Washington insiders say: 1986 tax reform. Except instead of having two years to finish the job, lawmakers have four months, putting the “normal congressional committee process on steroids,” as GOP lobbyist Jack Howard put it.
“There are more nervous lobbyists in this town tonight than [anytime] since 1986,” Paul Bledsoe, a senior adviser at the Bipartisan Policy Center, said. “It will be a feast for them in the short term, but a lot of them are going to lose.”
Among those likely to be guzzling Pepto-Bismol are defense contractors, doctors, hospitals, educators, and farmers. And because lobbyists get paid to win, they are scrambling to figure out the rules of the new game. Here’s what they’re thinking.
Lobbying the Leadership. As soon as they’re named, the 12 lawmakers on the so-called super committee—and their staffs—will be besieged by K Streeters. But some lobbyists aren’t waiting to find out who the members will be; they’re already talking about lobbying the leadership offices to appoint favored lawmakers to the committee. “Lobbying leadership is the best way to impact who is on those committees,” a Democratic lobbyist said.
However, lobbying appointments can be a dicey proposition. “They are the prerogative of the leadership. You launch too high-profile of a campaign or flex too much muscle, it can backfire on you,” said Howard, who worked as a top aide to then-Senate Majority Leader Trent Lott and then-House Speakers Newt Gingrich and Dennis Hastert. “It becomes readily apparent that you want so-and-so on there because it will protect my interests.”
Shaping the Conversation. The stakes are so high that once the committee members are named this month, some insiders are predicting that corporations and other organizations will launch home-state advertising blitzes to try to influence the Washington conversation before it even begins. In fact, some insiders predict that the “Divine Dozen” will eventually stop meeting with lobbyists, making home-state pressure all that much more important.
“The real trick will be to mobilize public-affairs/grassroots efforts and working with members not on the super committee but who are in the position of ‘lobbying’ the members of the committee,” said GOP lobbyist Ed Kutler.
Looking for Bank Shots. In all likelihood, the super committee members will be veterans of past budget and spending debates, their ears burning from hearing the all-too-familiar ‘Don’t cut me, cut the other guy’ pleas. So positioning will be extremely important as the debate kicks off. To that end, lobbyists are already eyeing the standing committees that can make recommendations to the new panel.
Interests that end up on their lists of recommended cuts head into the super committee playing defense, while other players are able to work on dodging cuts. “Once you start negotiating, you’ve lost,” a Democratic lobbyist said, “because then it’s [about], ‘How much are they taking from you?’ ”
And that raises the sticky question of when is the right time to start …
Cutting a Deal. Faced with the prospect of massive cuts, some industries will likely try to promote compromises to save particularly important programs or their bottom lines. A prime example of that strategy: The pharmaceutical industry’s play early in the health care reform debate to sign a pact with the White House and Senate Democrats. The deal protected the industry from Medicare rebates and drug reimportation in exchange for an $80 billion commitment to help fund reform.
In the end, the deal largely held, but not before lawmakers squeezed another $10 billion out of the industry—though even today, a year later, top industry officials still aren’t sure exactly how much reform will cost them. The experience and its aftermath could complicate the deal-making process this time around.
It infuriated some industry insiders in April when Obama pitched Medicare drug rebates as a solution to help curb federal spending, an idea that became part of debt-limit negotiations. And while some drug-industry insiders begrudgingly admit that their deal didn’t extend past health care reform, they were surprised at how fast their former allies turned on them.
“That’s the one thing that leaves people in the industry bewildered, that the White House would put back on the table a policy right after health care reform was over. I think people felt it was dishonorable,” said a lobbyist familiar with the deal. “There’s the letter of the agreement and the spirit of the agreement.… We would say this really violates the spirit of what we all agreed to.”
As K Street prepares to take on the super committee, drug lobbyists shared several lessons learned from health care reform:
• Make deals as explicit as possible. Pharmaceutical-industry lobbyists pushed to extend their deal for the rest of Obama’s first term but never got a commitment from the White House. “It is industry’s job to get as explicit a deal as possible, and it’s the administration’s job to keep it as vague as possible,” a Democratic lobbyist for the drug industry said.
• Be vigilant. This isn’t a business deal. There are no courts to enforce it, and it’s bound to change as quickly as conditions on the ground.
• Deal with all the players. The industry never won over House Democrats, which caused endless headaches. White House, Senate, and House leadership should all be brought in.
For some on Capitol Hill, there was another lesson.
As a Senate Democratic source said, “Folks everywhere are nervous about this White House’s ability to negotiate. Every time the Republicans stare them down, they blink.”
The debt-limit law creates a 12-member Joint Select Committee on Deficit Reduction, or super committee, responsible for making significant cuts on a turbocharged timeline.
August 16: Legislative leaders from both parties must appoint members.
September 16: The super committee must have held its first meeting.
October 14: Standing congressional committees wishing to weigh in must make cut recommendations.
November 23: The super committee’s budget-cut recommendations are due.
December 23: If Congress fails to pass a super-committee bill by the time the president needs to request another debt-limit increase, predetermined spending cuts in defense and domestic spending would be triggered.
Coral Davenport contributed
This article appears in the Aug. 6, 2011, edition of National Journal.