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Panel May Trigger Lobbying Bonanza

It’s Defense Spending Vs. Everything Else

Two of the biggest spenders on lobbying, the health care and defense industries, might end up working against each other in a furious four-month campaign focused on the deficit reduction committee-to-be.

The tension between the two heavy hitters centers on the provision of the debt ceiling agreement that triggers
$1.2 trillion in automatic cuts split evenly between defense and nondefense spending if a joint Congressional committee fails to produce its own plan for
at least $1.2 trillion in savings by Thanksgiving. For some sectors of the health care industry, especially those that involve Medicare, that “trigger” could be the lesser evil. As a result, those interests might want the committee to fail to reach an agreement.

Andrew Rosenberg, a Democratic lobbyist who represents pharmaceutical companies and medical device firms, said drug companies may prefer the broad cuts of the trigger, which would be capped at
2 percent and would hit all players equally, to the committee’s recommendations.

“They need to figure out how that across-the-board cut would actually be administered … and how that stacks up against the risks that may result from the committee process,” he said. “In either case, providers feel like it’s hunting season and they are the only animal that is in-season.”

Another health care lobbyist, Stacey Rampy with Mehlman Vogel Castagnetti, agreed that across-the-board cuts may be more appealing to certain sectors. “Some of the guys who are really on the chopping block might feel potentially better about that,” she said.

But lobbyists for the defense industry are already working to avoid the trigger at all costs and are invested in seeing the Congressional panel of 12 members succeed.

“The 50 percent cut as a trigger would be devastating to the defense community, which means not only a loss of jobs among the major prime contractors but also among the subcontractors they use,” said defense lobbyist Michael Herson, who runs American Defense International. “Couple that with a loss in military capability and military might and a loss of our manufacturing base in the United States.”

In recent months, the pharmaceutical industry successfully lobbied against a proposal that would have required drugmakers in the prescription drug Part D program to give the government the same rebates that they are forced to offer under Medicaid, but that would likely be back on the table in the new committee’s deliberations.

Hospitals, nursing homes and home health care providers have also been seriously eyed for cuts as part of deficit negotiations.

Val Halamandaris, president of the National Association for Home Care and Hospice, said that while his organization is grateful that Congressional leaders came up with an agreement to avoid a catastrophic default, he’s afraid his industry and its clients will take a hit.

The group plans to bring nurses and patients’ family members to Washington, D.C., over the coming weeks to make the pitch that the Medicare home-care benefit should not be subject to a copay. The homebound patients themselves obviously can’t make the trip, Halamandaris noted.

“We’re going to continue to bring the most credible people you can find,” he said. “And we’re going to release letters from people that were around and helped write the Medicare home-care benefit.”

Of course, not all health care interests will be playing pure defense with the committee.

Doctors, for example, are hoping lawmakers will include a permanent fix to their Medicare reimbursement rates. As it is now, doctors return to Congress year after year for their “doc fix” to prevent severe cuts to their Medicare reimbursement rates.

The joint committee process is an ideal venue to deal with a long-term doc fix “because you can’t realistically address the national debt without solving the physician payment problem,” said Rich Tarplin, a former Clinton administration official who runs Tarplin Strategies and represents the American Medical Association.

Several sources said they are already trying to devise a way to influence the panel, whose members have not yet been named.

Because of the truncated schedule — Congress will have to vote on the committee’s recommendations by Dec. 23 — lobbyists expect areas that have been targeted in previous proposals from the “gang of six,” the Biden group or the Simpson-Bowles commission to remain on the table.

“It’s going to be a very intense effort here over the next few months,” said Jack Howard, a Republican lobbyist with Wexler & Walker Public Policy Associates who represents defense companies. “In many ways, it is going to blot out the sun between now and Thanksgiving.”

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