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K Street, Democrats Make Nice

Stimulus Debate Softens Long-Held Tensions

Despite fears of being on the outside looking in this Congress, GOP-leaning business interests say they are finding they have much more in common with House and Senate Democratic leaders than they may have imagined.

Indeed, several trade association lobbyists say they have been surprised by the willingness of Congressional Democrats such as Senate Majority Leader Harry Reid (Nev.) to work with them in the early days of the 111th Congress. In turn, Congressional Democrats are applauding what they say is a lack of partisanship demonstrated by GOP-dominated trade associations and lobbying firms.

“We’ve tried to go out of the way to open a dialogue and relationship with folks downtown,” Reid spokesman Jim Manley said, adding that the Majority Leader “very much appreciates the support” that the business community has shown to Democratic efforts to address the economy.

The relationship, while far from chummy, is on its face a dramatic change from last year, when Reid launched an aggressive campaign against the National Association of Manufacturers and other firms that he viewed as too closely aligned with Republicans. The spats grew bitter behind closed doors, with senior Congressional Democrats making clear they expected more from K Street now that their party controlled Congress.

In one instance, NAM President John Engler, the former Republican governor of Michigan, ruffled Democrats’ feathers when he chose to weigh in on the judicial nomination fights of the 109th Congress. His decision infuriated Reid, who argued that business groups had no place in the judicial battles, which were traditionally waged by socially minded organizations.

While the fight over judges angered Senate Democrats, a source with NAM insisted that Engler’s decision was not a partisan one. Rather, it was based on his belief that the judiciary has a direct influence on the health of manufacturers.

“NAM’s involvement in Supreme Court nominations was motivated by the fact that there was a common perception at the time that the judicial branch could make or break the business community. … It was not an effort to insert NAM into social fights,” the source said.

Nevertheless, this situation, and other instances of alleged partisanship, led many Democrats to believe that NAM was working against their interests. As a result, there has been a “tremendous misperception that the NAM is some kind of Republican organization,” the source acknowledged.

Sources on and off the Hill said the recent Congressional debate over the $787 billion stimulus package proves that the former rivals may have turned the corner.

Congressional Democrats showed “that they understand the role business plays in creating jobs in this country and that they want to work with us, and vice versa,” the NAM source said.

The reason: the dire state of the economy, which one lobbyist described as “priority one, two and three” for Americans and lawmakers on Capitol Hill. With the economy possibly in its worst state since the Great Depression, business interests and Congressional Democrats have found a shared goal in finding compromise.

Additionally, lobbyists say the Obama White House has taken a far more inclusive approach to legislating than they initially expected.

Unlike the previous administration, which often crafted its proposals in relative isolation, Obama and House and Senate Democrats have met with business leaders, unions and others in developing their agenda.

And while Republicans did find themselves shut out of many of the negotiations on the stimulus, the final package was not as partisan a bill as many had feared. It garnered strong support from NAM, the U.S. Chamber of Commerce and other business organizations.

A more subtle but potentially more significant factor has been the fact that trade associations such as NAM and the chamber — which are run by former Republican politicians — have demonstrated an openness to working with Democrats in the 111th Congress.

During the stimulus debate, those factors helped set the stage for a significant amount of dialogue and cooperation between the two sides, sources say. For example, during work on the final conference report, business interests were able to insert a number of provisions into the package, which, while weaker than they may have liked, were strong enough.

And after the final deal had been hammered out, trade associations quickly swung into action to support the bill. Engler appeared at an event on Capitol Hill with Reid, while the chamber’s Executive Vice President of Government Affairs Bruce Josten praised the measure and urged the House and Senate to back it.

Engler and other business leaders also took an active role behind the scenes in attempting bring on more Republican support. Although none of the GOP Conference broke party ranks in the House, Democrats embraced the lobbying campaign. “Engler was making phone calls to Republicans” for the bill, one previously skeptical Senate Democrat said.

“I think everyone understands we need to join hands and work together. … So whatever those perceptions were in the past, I just don’t think they’re relevant anymore,” the NAM source said.

Politically, business leaders have also been more than willing to give Democrats the kind of perks that the Republican majority enjoyed in previous years. For instance, NAM listed the vote on the stimulus bill as a “key vote,” making it part of the organization’s scorecard on how lawmakers vote on priority legislation.

Similarly, after passage of the stimulus, the chamber went on to publicly praise more than 20 Democratic House Members.

A House Democratic aide noted that the chamber has targeted freshman and sophomore Members who typically hail from Republican-leaning districts and who could use the show of support from the business community to help buttress their re-election efforts next year.

It’s “very helpful to respond to claims by the Republicans that the bill is not going to help the economy, create jobs and will hurt the business community,” this aide said, adding that it “gives our new Members a lot of cover and a lot of validators.”

A chamber source acknowledged that the organization was looking to applaud Members who found themselves in a difficult position in voting for the bill, noting that the legislation, like last year’s financial sector bailout measure, may not be popular with constituents.

The stimulus and financial bailout bills were “tough, difficult votes, no doubt,” the source said.

How the positive feelings left over from the stimulus debate will affect future legislation is unclear, but both sides acknowledge there are numerous legislative tests on the horizon. Sources say the upcoming fight over “card check” legislation, which loosens labor organizing rules, will be a key example.

The success of the stimulus package “doesn’t mean we’re always going to agree, but that we are going to look for areas we can agree on,” the NAM source said.

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