Lobbyists Eager for Short-Term Fiscal Deal

K Street Prepares for Lame-Duck Congress

Posted November 7, 2012 at 6:52pm

K Street’s calls for a legislative Band-Aid to carry clients past the “fiscal cliff” and into the next Congress became increasingly desperate Wednesday.

Indeed, the day after the elections provided little promise of how, or whether, the lame-duck Congress would manage to compromise on a plan to avert the impending budgetary time bomb.

“The stakes over the fiscal cliff discussion just got significantly higher,” said David French, chief lobbyist at the National Retail Federation. “If Washington was looking to guidance from the voters on the path ahead, voters weren’t exactly clear.”

As the nation approaches its debt ceiling yet again, lawmakers have less than 20 legislative days to decide what to do about the simultaneous expiration of the Bush-era tax cuts and the Social Security payroll tax holiday, as well as the first round of sequestration cuts.

Every interest group has a stake.

Business advocates argue that the tax provisions set to expire on Dec. 31 will stifle the still sputtering economy. Defense lobbyists fear that the longer the Pentagon budget remains up in the air, the harder it will be for contractors to recover. And unions and other liberal groups worry that emboldened Senate Democrats may agree to cuts in Medicare as part of a last-minute compromise.

Add to that pleas from lobbyists representing municipalities ravaged by Hurricane Sandy that are desperate for federal funds to speed disaster relief efforts.

“Folks in the business community believe it’s time to unite our country because America’s competitiveness is at stake,” Jay Timmons, the president of the National Association of Manufacturers, said on a conference call Wednesday. “I don’t think there’s anything more urgent than dealing with our fiscal crisis.”

For the past year, defense giants and, to a lesser degree, technology firms, have begged lawmakers to avoid billions of dollars in cuts associated with sequestration.

Michael Herson, a Republican lobbyist with American Defense International, said he is optimistic that lawmakers will delay sequestration until the next Congress and said most defense lobbyists will adopt a wait-and-see approach for the lame-duck session.

The U.S. Chamber of Commerce, which fielded its largest voter mobilization effort ever and spent millions in support of Republicans this cycle, also urged the parties to come together on comprehensive tax and entitlement reforms.

But with many of the same faces returning to Washington, D.C., next year, lobbyists wondered whether the illusive “grand bargain” is little more than a pipe dream.

“[It] hinges on how Obama plays it. If he and his team really bear down and work with GOPers — an element sadly lacking the last four years — they can make a lot of progress,” said Jack Howard, a Republican lobbyist at Wexler & Walker Public Policy Associates. “If, however, he takes a hands-off approach, then I don’t really see much of a path forward. He has to be the arm-twister, the head-knocker to move things forward.”

Firms have spent the past few months trying to position themselves for intense focus on budgetary and tax matters during the lame duck and into the next Congress. The struggling Ogilvy Government Relations, for example, recently joined forces with the boutique tax lobby GDS Strategies.

K Street historically sees end-of-year packages as an opportunity to squeak pet provisions past Members eager to begin the holiday recess or to, on occasion, tackle major matters, but lobbyists said this year will be different.

“This is a lame-duck session, put the emphasis on lame,” quipped former Michigan Gov. John Engler, who heads the Business Roundtable. “So I don’t have great expectations.”