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lobbyists for the banking industry were gathered in a war council.
The Obama administration had proposed big changes in financial
industry oversight, including a consumer protection commission and
regulation of some executives’ paychecks. The lobbyists listened to
presentations from big Washington public affairs firms ready to
deploy arsenals including television commercials and direct-mail
campaigns.
But at the end of the meeting, the lobbyists publicly opted to
emphasize, if with caveats, their industry’s backing of President
Obama’s broader call for reform.
Steve Bartlett, president of the Financial Services Roundtable and a
participant in the discussion, said in an interview,
“This administration has
reminded us of the lesson our mother taught us: If you can’t say
anything nice, don’t say anything at all.”
And so it goes the length of K Street. Industry groups and lobbyists
typically hostile to intrusive government programs have been
professing solidarity with Mr. Obama and his agenda on matters like
health care, energy and financial regulation. Industry has
calculated that it stands a better chance of achieving its ends by
negotiating with the White House than by fighting it — at least
publicly, and at least until the various proposals get down to the
final details.
For partisans who are more ideological, the parade of industry
lobbyists trooping to the White House is unnerving. Conservatives
fret that to avoid a messy fight, their business allies are selling
out too cheaply, while liberals voice the same worry about the White
House and its Congressional supporters.
Some lobbyists argue that
all the “kumbaya,” as several called it, may be reaching its final
chorus, for instance with banks’ efforts to redirect the regulatory
overhaul.
“We have sort of a dual goal,” Mr. Bartlett said. “One is to support
comprehensive reform, and the other is to kill the consumer
financial protection commission.”
In any case, the administration’s emphasis on inviting in business
lobbyists has arguably changed the way Washington does business as
much as any of the White House’s new rules intended to shut them
out.
“The Obama people have very
skillfully said, ‘Hey, we are working on this, and if you want a
seat at the table you can’t be out there throwing rocks at us,’ ”
said Doug Goodyear, chief executive of DCI Group, a corporate public
affairs firm. “And that has restrained large corporations or trade
associations from waging full-scale campaigns.”
In the last two weeks, the American Medical Association has endorsed
the House’s version of the health care overhaul, and lobbyists for
pharmaceutical companies and for-profit hospitals have stood with
the White House to pledge billions in cost cuts so long as the
proposed public health insurance program does not threaten to
undercut them. The drug companies are even underwriting television
commercials supporting an overhaul.
Lobbyists for coal-powered electric utilities say they are backing
House emissions-cap legislation as it moves to the Senate, so long
as they can perhaps loosen the caps a bit and retain subsidies that
the House provided to win their support.
Lockheed Martin publicly washed its hands of any lobbying to save
its F-22 fighter jet contract from Pentagon cuts, then watched as
its unions, subcontractors and Congressional allies persuaded House
committees to restore the plane. (The White House is threatening a
veto.)
And Wall Street firms insist
that they welcome more oversight, so long as it does not cramp their
profits or involve checks on compensation.
Conservatives complain that the support for “reform” deprives them
of firepower. “Disgusting,” said Amy Menefee of the conservative
group Americans for Prosperity.
Ms. Menefee’s organization recently announced a $1.2 million
advertising campaign against the health care overhaul, but she said
none of that campaign’s cost was being paid by the industry.
Similarly, Patrick Creighton, a spokesman for the
oil-industry-backed American Energy Alliance, said that group had
been unable to finance a full assault on the greenhouse-gas
emissions limits. The alliance wound up spending only about
$200,000, for radio commercials in 10 districts, before the bill
passed the House, Mr. Creighton said.
“Why didn’t the floodgates
open?” he said. Because “a lot of industry was at the table looking
for their cutouts and carve-outs” — that is, special treatment.
Liberals, meanwhile, say they fear that the White House and
Democratic Congressional leaders are conceding too much. The House
emissions bill, for example, gave away as sweeteners about 85
percent of the emissions permits that Mr. Obama had proposed to sell
at auction.
Representative Raúl M. Grijalva, Democrat of Arizona and co-chairman
of the Congressional Progressive Caucus, called the emissions bill a
cautionary lesson for the health care fight.
“Collaboration can turn into concessions,” said Mr. Grijalva, who
recently sent the president a letter saying the caucus feared
accepting conditions in exchange for the support of hospitals or
drug makers.
The conciliatory tone on K Street has combined with the recession to
tamp down lobbying firms’ revenue. Total reported lobbying spending
was about $789 million in the first quarter, roughly flat from the
corresponding period last year.
Health industry spending rose about 10 percent, to some $126
million, but financial industry spending fell about 7 percent, to
$110 million. And even in the face of a major overhaul of the
Pentagon’s budget, spending by the defense industry dropped a bit,
to roughly $30 million.
“The issues are more complicated,” said Charles M. Campion, a
founder of the public affairs firm Dewey Square Group, “but the
budgets are smaller.”
Certain lobbyists with strong Democratic connections have bucked the
revenue tide, though. The Podesta Group, whose chairman, Tony
Podesta, is a top Democratic fund-raiser and the brother of the
Obama administration’s transition chief, John D. Podesta, reported
that first-quarter lobbying fees were up 60 percent, to $5.4
million, from $3.4 million a year ago.
At the firm of Steve Elmendorf, a longtime aide to Richard A.
Gephardt, a former House Democratic leader, fees jumped nearly 24
percent, to about $1.6 million.
Mr. Elmendorf said he
encouraged clients to work with the administration. “Look at the
landscape,” he tells them, “and realize the Democrats will control
the White House, House and Senate for at least four years.”
Republican lobbyists say they are growing tired with the talk about
shared goals.
“How do you oppose such a popular president, especially when he has
a style that seems so inviting and sensible?” said Ed Rogers, a
Reagan administration official whose lobbying firm, BGR Group,
reported a 13 percent decline in first-quarter fees, to about $4.1
million.
“A lot of the typical industry players that would, on paper, be
against these initiatives,” Mr. Rogers said, “have been in part
co-opted and in part intimidated by the administration.”
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