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K Street Busy Preparing for Whirlwind 2013

Capitol Hill might be grinding to a partisan, election-year standstill, but there is still plenty to do on K Street.

The influence sector is planning an aggressive agenda, casting policies such as tax reform with plenty of political spin. Business lobbyists say they will capitalize on the acrimony between the House GOP and the White House in an attempt to use Congress to rein in federal regulators.

They also will quietly work the halls of the Capitol to set the stage for what K Street expects to be a whirlwind 2013.

“People just can’t put up the ‘Gone Fishing’ sign for the year and pick up next January where they left off,” said Republican Ken Kies, a longtime tax lobbyist who is managing director of the Federal Policy Group. Like most of his downtown colleagues, Kies doesn’t expect the second session of the 112th to produce much in the way of legislation or bipartisan agreement.

“We’re in the most partisan, nasty environment — Republican on Democrat, Congress on White House — we’ve seen in 50 years,” he said. “It’s just about as ugly as you can imagine.”

Still, Kies and other K Streeters say that especially when it comes to taxes and deficits, big deals aren’t outside the realm of possibility if, say, the European Union were to collapse into a deep recession.

Even absent big legislation, lobbyists will make sure Members of Congress get an earful of their clients’ priorities.

“You’re still going to have a tremendous amount of behind-the-scenes positioning,” said Democrat Andy Rosenberg, who heads the firm Thorn Run Partners. “We’ve been adding clients, not losing clients. There’s a real sense that there’s a lot at stake this year.”

For example, lobbying interests will continue spending big on fights over online sales tax and online piracy bills.

And Jade West, a top in-house lobbyist for the National Association of Wholesaler-Distributors, said her organization is keeping a close watch on tax policy, including tax reform and tax extenders. At the end of December, Congress passed a two-month extension of the payroll tax holiday, unemployment benefits and the Medicare “doc fix,” setting the stage for a fresh fight early this year.

“The term ‘Groundhog Day’ just keeps rolling through my mind,” West said. “We are starting a new year with the first order of business being the unfinished business from the last session.”

The same debates, though, this year will “be colored by the fact that it’s an election year” and lawmakers may not be “looking at what’s good for the country but what’s good for somebody’s campaign brochures and ads,” she said.

The campaign-tinged year can hinder individual industries’ priorities. National Association of Federal Credit Unions’ President and CEO Fred Becker said his group is looking for regulatory relief in the form of the Communities First Act, which focuses on smaller financial institutions.

“I don’t think it’s realistic that it would happen this year,” Becker conceded. “The partisan issues turn out to be a distraction, and it becomes harder to get attention on your issues that are important to your industry.”

But some lobbyists see an advantage to election-year politicking.

Scott Segal, a partner at Bracewell & Giuliani, said it’s all about knowing how to frame your clients’ issues to get the maximum bounce — from voters and government officials — during a big election year.

“Policy issues get more attention during election years, so the government relations field is usually more active,” he said. “I have never felt that presidential election years are somehow boring and unproductive.”

If a lobbyist frames an issue that might otherwise cause Congressional eyes to glaze over — such as shale oil and gas — in the context of constituent jobs, then the message will likely resonate. “It’s significant in some real battleground states like Pennsylvania and Ohio,” Segal said. “To the extent that some of the Democrats in Congress have not been as open to shale gas development, they can put themselves in opposition to job growth in battleground states.”

Energy and big business interests also will look to Republicans to help put the stop on regulations coming out of the Environmental Protection Agency and the National Labor Relations Board — again, rich campaign themes.

Segal said a suite of EPA regulations “are all policy initiatives that are motivated by the administration’s desire to achieve through regulation what it couldn’t get passed through climate legislation.”

The National Association of Manufacturers is likely to be a thorn in the administration’s side, opposing the EPA and NLRB. But the group’s Aric Newhouse said it would support Congress giving the president fast-track authority to negotiate new trade deals, which the group views as job creators. “Our hope is that this won’t be a year of gridlock and partisanship,” Newhouse said.

While the prospects of Republican-Democratic comity inside the Beltway remain low, some lobbyists say Members could rally around a few specific areas. Rosenberg said in the health care sector, K Street sees the prospect of action on a duo of bills to reauthorize the Prescription Drug User Fee Act and the Medical Device User Fee and Modernization Act.

And even if the summer is slow, there could be an extremely active lame-duck session in November.

“Having been around this place for quite a while, you have to worry about what you don’t see coming,” tax lobbyist Kies said. Could Congress really tackle the deficit and pass tax reform? “You’d have to say, ‘Surely you’re joking,’” he added. “But sometimes crises prompt people to act.”

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