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Earmark Lobbyists Facing Dismal Prospects

Appropriations lobbyists are accustomed to operating in an uncertain world.

But this appropriations season is even more precarious than past years with new earmark bans in place. That, combined with the House’s slow pace with the appropriations process, has put K Street in a serious bind. None of the House appropriations bills has been marked up, and little progress is expected to be made before a war supplemental passes.

“I’ve never seen it this bad before,” said one appropriations lobbyist, who would speak only on the condition of anonymity. “We’re telling our clients to prepare for the worst, the worst being the supplemental goes down to the wire and the other appropriations bills don’t get done.”

GolinHarris lobbyist Michael Fulton agreed. “I think what people fear is a very long-term continuing appropriations resolution, which is to say, ‘We can’t get it done, and we’re going to live off the prior year’s funding,'” he said.

The House typically marks up all 12 appropriations bills before the August recess. However, this year it’s unlikely that any of the bills will get marked up before August. It’s a common belief on K Street that the Homeland Security, Defense, and military construction and Veterans Affairs appropriations bills will be rolled up into a mini-omnibus before the August recess.

While timing of appropriations bills is always bumpy, House Democrats’ decision to ban earmarks for for-profit entities and House Republicans’ move to go further and ban all earmark requests have added additional wrinkles to the process.

What a difference a year can make. For the current fiscal year, Members of both parties secured 9,499 earmarks worth $15.9 billion, according to a study by Taxpayers for Common Sense.

The new bans have created a load of other uncertainties for K Street and entities trying to secure federal funding. It’s unclear how the Senate and House will reconcile appropriations bills since House Democrats have implemented a policy of not sponsoring for-profit earmarks, but the Senate has no such ban. Still, lobbyists said they believed the appropriations panels would approve the earmarks for both chambers without much fanfare.

Defense lobbyists in particular are feeling vulnerable with House Democrats’ decision to ban earmarks for private companies. Several lobbyists said they are focused on Appropriations Chairman David Obey (D-Wis.) and Subcommittee on Defense Chairman Norm Dicks (D-Wash.), who set up a new program that is to be run by the Defense Department to fund projects that could go to for-profit businesses, particularly startups.

Dicks spokesman George Behan said his boss is putting language in the 2011 Defense bill that would direct the DOD’s Small Business Innovation Research program to administer the pot of money.

“Members of Congress wouldn’t be as much instigating the pursuit of those ideas,” Behan said. Instead it would be up to the DOD to pick which companies get funding.

The working figure that Dicks has publicly said was under consideration to be allocated for this fund is about $500 million, Behan said.

Akin, Gump, Strauss, Hauer & Feld’s John Simmons said he is focusing his attention on the fund for clients such as Syracuse, N.Y.-based Defenshield Inc. Defenshield makes mobile safety shields that protect military and police personnel from incoming fire. Simmons brought a funding request to New York lawmakers, but the entire delegation opted against making earmark requests for private companies.

“It’s one of these small procurement items that doesn’t get a lot of visibility, and it’s always helpful when Congress can prime that pump,” Simmons said. “They all had to turn us down, although it is a small veteran-owned business, because it is a for-profit.”

Lobbyists said they are also continuing to try to get a handle on whether clients will be able to compete for the funding. One appropriations lobbyist said there’s a new concern that has come out of the fund — whether companies will meet the small-business parameters to compete for DOD earmarks.

“The worries have shifted to whether they fit [to compete] for this pot of money,” the lobbyist said.

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