Comprehensive Tax Reform Kicks Off Lobbying Frenzy

Speaker of the House John Boehner waits for the next congressman to swear into office at a ceremonial swearing in in the Rayburn Room of the Capitol on Wednesday, January 5, 2011.
National Journal
Billy House
Add to Briefcase
See more stories about...
Billy House
Oct. 23, 2013, 2 p.m.

Hun­dreds of cor­por­a­tions and busi­ness groups — from Fe­d­Ex to Wal-Mart — have been spend­ing mil­lions of dol­lars on lob­by­ing the Obama ad­min­is­tra­tion and Con­gress on com­pre­hens­ive tax re­form.

“What’s the old ad­age? If you’re not at the table, then you’re prob­ably on the menu?” sug­gests Lee Drut­man, a seni­or fel­low at the Wash­ing­ton-based Sun­light Found­a­tion, a non­profit, non­par­tis­an gov­ern­ment-watch­dog or­gan­iz­a­tion.

This table was set last fall, when Ways and Means Com­mit­tee Chair­man Dave Camp, R-Mich., an­nounced un­equi­voc­ally that his pan­el would write, mark up, and pass ma­jor tax-re­form le­gis­la­tion in 2013. Then, Speak­er John Boehner said over­haul­ing the un­wieldy tax code was one of the highest pri­or­it­ies.

The menu cer­tainly holds im­plic­a­tions for in­di­vidu­al tax­pay­ers. But for many cor­por­a­tions and oth­er busi­ness groups, there are hopes — even ex­pect­a­tions — of a cut in the cor­por­ate tax rate from 35 per­cent to as low as 25 per­cent. There is also a push for oth­er moves, such as the re­pat­ri­ation of some off­shore cor­por­ate profits. At the same time, busi­nesses are eager to pre­vent a wide ar­ray of oth­er things from hap­pen­ing, such as the clos­ing of some ex­ist­ing loop­holes.

The dev­il of any re­form is in the de­tails of what ex­actly will be tar­geted. Drut­man’s re­search has found that thou­sands of lob­by­ists are work­ing to make sure roughly 2,000 cli­ent or­gan­iz­a­tions wind up happy, and some of these ef­forts are em­ploy­ing high-pro­file former law­makers.

But gauging the depth of these lob­by­ing ef­forts from the out­side is dif­fi­cult. Rep. Bill Pascrell, D-N.J., a Ways and Means mem­ber, says he’s de­tec­ted “no great change … no spe­cial gnash­ing of teeth” in the in­tens­ity of lob­by­ing on tax is­sues this year.

But he says that’s be­cause this lob­by­ing sec­tor is al­ways busy and alert. That’s par­tic­u­larly been the case in an era of el­ev­enth-hour fisc­al-cliff bills and last-second budget man­euvers.

Pascrell did say there seems to have been more dir­ect in­volve­ment from lob­by­ists and stake­hold­ers this time around through par­ti­cip­a­tion in the 11 sep­ar­ate tax-re­form work­ing groups the com­mit­tee has used to re­search is­sues and get feed­back.

The Cen­ter for Re­spons­ive Polit­ics lists the con­tri­bu­tions to Ways and Means mem­bers by polit­ic­al ac­tion com­mit­tees and in­di­vidu­al donors. Based on fil­ings with the Fed­er­al Elec­tion Com­mis­sion dat­ing from Janu­ary through Aug. 19 of this year, the site shows that the fin­ance/in­sur­ance/and real es­tate sec­tors have been lead­ing the way—giv­ing about $3.8 mil­lion al­to­geth­er to com­mit­tee mem­bers. These groups are fol­lowed by the health sec­tor, mis­cel­laneous busi­ness in­terests, and or­gan­iz­a­tions tied to en­ergy and nat­ur­al re­sources.

And in the last ses­sion, only two of the top 25 sec­tors with the most tax-re­lated lob­by­ing activ­ity over 2011 and 2012 were not in some way tied to cor­por­a­tions look­ing for their own tar­geted be­ne­fits, ac­cord­ing to Drut­man’s re­search for the Sun­light Found­a­tion.

But law­makers and lob­by­ists note there are oth­er as­pects to lob­by­ing that might not ne­ces­sar­ily show up in fil­ings. Those range from un­der­scor­ing the con­cerns of home-dis­trict busi­nesses that might be im­pacted by tax de­cisions in Wash­ing­ton, to the im­pact for law­makers on per­son­al ties that can im­pact fu­ture job pro­spects in the re­volving-door cul­ture of Wash­ing­ton.

The lob­by­ing on tax re­form con­tin­ues des­pite a grow­ing skep­ti­cism that not much sig­ni­fic­ant re­form will ac­tu­ally take place this year.

Law­makers and lob­by­ists alike say that next week’s kick­off of a budget con­fer­ence com­mit­tee, to be co­chaired by House and Sen­ate Budget Com­mit­tee chairs Paul Ry­an and Patty Mur­ray, all but en­sures that Camp must now wait for a sort of “road map” from the con­fer­ence com­mit­tee on what might be pur­sued with the Sen­ate, per­haps un­der the bi­par­tis­an cov­er of re­con­cili­ation.

“At this junc­ture, it’s more about put­ting every eye and ear on the ground … to be fo­cused on in­form­a­tion gath­er­ing, and to be ready,” said Steve Pruitt, a former House Demo­crat­ic Budget Com­mit­tee Staff Dir­ect­or who is now a man­aging part­ner at Watts Part­ners, one of the cor­por­ate and gov­ern­ment af­fairs firms that has grabbed a share of the Wal-Mart lob­by­ing budget in 2013.

What We're Following See More »
Court: Selfies in Voting Booth Now OK
1 hours ago
Obama to Travel to Israel for Peres’s Funeral
1 hours ago
Reuters/Ipsos Shows Clinton Ahead by 6
1 hours ago

In one of the first polls released since Monday night's debate, a Reuters/Ipsos survey shows Hillary Clinton leading Donald Trump 44%-38%. When third-party candidates are thrown into the mix, Clinton's share of the vote drops to 42%, with Gary Johnson picking up 7% and Jill Stein at 2%.

Senate Votes to Fund Government
2 hours ago

The Senate voted on Wednesday 72-26 on a bill to fund the government through Dec. 9, averting a looming shutdown. The legislation will now go to the House, where it could be voted on as early as Wednesday. After this legislation is approved by the House, Congress will recess until the lame-duck session following elections.

House Completes Override of Obama Veto
3 hours ago

"Congress voted Wednesday to override President Obama for the first time in his eight-year tenure, as the House followed the Senate in rejecting a veto of legislation allowing families of terrorist victims to sue Saudi Arabia. The House easily cleared the two-thirds threshold to push back against the veto. The final tally was 348-77, with 18 Republicans and 59 Democrats voting no."