Gucci Gulch Can’t Hold All Lobbyists Engaged in Tax Fight
Few echoes from the 1980s in current overhaul effort
Lobbyists are ready to prowl the hallways outside the tax-writing committees as Congress seeks to overhaul the tax code, but the scenes won’t be reminiscent of the 1980s-era Gucci Gulch.
The tools of influence and communication have exploded in the past three decades. Back then, for example, only the richest denizens of Gucci Gulch sported “those brick-like cell phones,” recalled Jeffrey Birnbaum, who co-wrote a 1988 book about the last major tax overhaul, “Showdown at Gucci Gulch: Lawmakers, Lobbyists and the Unlikely Triumph of Tax Reform.”
During the bipartisan effort that led to enactment of the 1986 tax overhaul, then-Ways and Means Chairman Dan Rostenkowski urged voters to send him messages with their thoughts on tax overhaul. In a campaign dubbed “Write Rosty,” the Illinois Democrat received tens of thousands of postcards from interested citizens, Birnbaum said.
While it was big at the time, “tens of thousands seems like a very quaint number” now, said Birnbaum, noting that lobbying campaigns today can generate that many tweets in 10 minutes.
“The speed and number of communications is legions larger than in ’85 and ’86,” said Birbaum, who has an inside perch on K Street as president of BGR Public Relations.
Gucci Gulch, which refers to the hallways outside the tax-writing committees, “couldn’t possibly accommodate the number of lobbyists and other professionals who now will want to influence a new tax reform bill,” Birnbaum observed. “Everything is much larger and faster — and more precisely targeted.”
It’s not clear how that may complicate, or help, this year’s bill. “If there is a large enough popular view, either for or against either the bill or one of its provisions, then the influence of that could be gigantic,” he said.
That may be one reason for the Republicans’ ambitious timeline for moving their legislation. House Republicans say they plan to vote on the measure before they sit down to eat their Thanksgiving dinner.
Rachelle Bernstein, a tax lobbyist with the National Retail Federation, worked at the U.S. Chamber of Commerce in the 1980s. The tax overhaul measure then, she said, included a 26-day markup at Ways and Means and a 17-day markup at Senate Finance.
Current Ways and Means members say they anticipate spending a full week on their markup.
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“So if they took a week on this, it would not be a long time,” Bernstein said. “Is this, at the end of the day, something you call reform or a tax cut? The thing about the ’86 act, it really was reform. It went through the entire tax code.”
Shaping the debate
K Street lobbyists still haven’t gotten their hands on the full text of the House GOP’s plan, but business representatives have already begun to dig in on how to message it.
The 1980s debate isn’t the only history lesson that K Street has turned to.
“Cutting taxes is easy,” said former Sen. John B. Breaux, now a lobbyist with Squire Patton Boggs. “If you want to pay for the tax cuts, that’s very difficult.”
Though congressional Republicans already abandoned the idea of a plan that doesn’t add to the deficit, they are still looking for ways to minimize the cost and simplify the code by scrapping some popular breaks.
Breaux, who has clients engaged in the current debate, feels for the folks on the Hill.
The Louisiana Democrat was part of a bipartisan tax commission during the George W. Bush administration that the president charged with coming up with an overhaul that would not increase the deficit — meaning that for all the tax cuts, they’d have to equally trim existing deductions and breaks.
Breaux and his colleagues on the tax commission suggested an elimination of the state and local tax deduction, the subject of huge controversy this year, as well as caps on deductions for mortgage interest and health care.
“As a result of all that, President Bush ignored it, and Congress didn’t move on it at all,” the former senator recalled.
Given the intense partisanship on the Hill and around the country, it may be difficult for Republicans to woo Democrats to their proposal. House and Senate tax writers are drafting current legislation without Democratic input. Breaux warned that Republicans are pursuing a partisan tax overhaul path at the measure’s peril.
“To Trump’s credit, he has reached out to some Democrats, had them over to the White House,” he said. “The only way you’re going to pass tax reform is to do it in a bipartisan fashion, when people hold hands and jump off a cliff together.”
As the details of the House GOP plan emerge in full context, lawmakers and lobbyists alike will hone their talking points on the bill. But whether they try to sell the bill or take it down, it won’t be easy to promote a position on what is widely considered a wonky slice of policy.
“It’s tax — as much as I love it, it’s not passionate,” said Democratic lobbyist Dawn Levy O’Donnell, who runs the lobby firm D Squared Tax Strategies. “It doesn’t have the emotional draw that health care does. It’s very easy to get people to say ‘no’ to something because they know it will hurt, and unless they know for a fact that it will help, it’s hard to do.”