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 »
Snowstorm Could Impact Primary Turnout
2 days ago

A snowstorm is supposed to hit New Hampshire today and “linger into Primary Tuesday.” GOP consultant Ron Kaufman said lower turnout should help candidates who have spent a lot of time in the state tending to retail politicking. Donald Trump “has acknowledged that he needs to step up his ground-game, and a heavy snowfall could depress his figures relative to more organized candidates.”

A Shake-Up in the Offing in the Clinton Camp?
2 days ago

Anticipating a primary loss in New Hampshire on Tuesday, Hillary and Bill Clinton “are considering staffing and strategy changes” to their campaign. Sources tell Politico that the Clintons are likely to layer over top officials with experienced talent, rather than fire their staff en masse.

Trump Is Still Ahead, but Who’s in Second?
2 days ago

We may not be talking about New Hampshire primary polls for another three-and-a-half years, so here goes:

  • American Research Group’s tracking poll has Donald Trump in the lead with 30% support, followed by Marco Rubio and John Kasich tying for second place at 16%. On the Democratic side, Bernie Sanders leads Hillary Clinton 53%-41%.
  • The 7 News/UMass Lowell tracking poll has Trump way out front with 34%, followed by Rubio and Ted Cruz with 13% apiece. Among the Democrats, Sanders is in front 56%-40%.
  • A Gravis poll puts Trump ahead with 28%, followed by Kasich with 17% and Rubio with 15%.
CNN Calls the Primary for Sanders and Trump
1 days ago

Well that didn’t take long. CNN has already declared Bernie Sanders and Donald Trump the winners of the New Hampshire primary, leaving the rest of the candidates to fight for the scraps. Five minutes later, the Associated Press echoed CNN’s call.