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
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 »
Everyone’s Taking Their Best Shots at Philly
35 minutes ago

Not since Eagles fans booed Santa Claus have this many people been dismayed at Philadelphia. Traffic gridlock, poor logistics, and the inevitable summer heat and thunderstorms are drawing the ire of convention goers, as "peeved" delegates complained about "Homerian odysseys" to get from place to place. "On Twitter, out-of-town media complained about the logistics of the convention, spread out between the sports complex in South Philadelphia, media tents a hike away, and the daytime events at the Convention Center in Center City."

France Wakes Up to More Terrorism
46 minutes ago

"Two attackers killed a priest with a blade and seriously wounded another hostage in a church in northern France on Tuesday before being shot dead by French police. The attack took place during morning mass at the Saint-Etienne parish church, south of Rouen in Normandy. Five people were initially taken hostage." The case has been referred to anti-terrorism officials in Paris.

Roll Call Sets the Stage for More Drama
53 minutes ago

"Sometimes, unity is procedural. Mr. Sanders’s delegates will get the chance to back him in a roll-call vote from the convention floor on Tuesday, a largely symbolic gesture intended to recognize the breadth of Mr. Sanders’s support as the former rival campaigns negotiate an awkward peace." Around 6 p.m., they'll begin calling the states to vote. Sanders won't be in a generous mood—at least at the beginning. Last night from the stage, he said, "I look forward to your votes during the roll call tomorrow night." Indeed, in 2008, Clinton herself insisted on a roll call, before halting it "midway through, asking that Mr. Obama be approved by acclamation."

Bernie Sanders Seeks to Unite the Party
10 hours ago

Instead of his usual stump speech, Bernie Sanders tonight threw his support behind Hillary Clinton, providing a clear contrast between Clinton and GOP nominee Donald Trump on the many issues he used to discuss in his campaign stump speeches. Sanders spoke glowingly about the presumptive Democratic nominee, lauding her work as first lady and as a strong advocate for women and the poor. “We need leadership in this country which will improve the lives of working families, the children, the elderly, the sick and the poor,” he said. “Hillary Clinton will make a great president, and I am proud to stand with her tonight."

Elizabeth Warren Goes After Donald Trump
11 hours ago

In a stark contrast from Michelle Obama's uplifting speech, Massachusetts Senator Elizabeth Warren spoke about the rigged system plaguing Americans before launching into a full-throated rebuke of GOP nominee Donald Trump. Trump is "a man who has never sacrificed anything for anyone," she claimed, before saying he "must never be president of the United States." She called him divisive and selfish, and said the American people won't accept his "hate-filled America." In addition to Trump, Warren went after the Republican Party as a whole. "To Republicans in Congress who said no, this November the American people are coming for you," she said.