2009 Legislative Preview

It’s no secret that President-elect Obama, his new Cabinet and the 111th Congress have some seemingly insurmountable tasks in front them, the most pressing of which is to fix the tanking economy (and fast!). But their agenda also includes sweeping reform of the health care system; slowing global warming and investing in alternative energy; improving foreign relations and dealing with two wars abroad; and finding a way to send more students to college, regardless of their family’s income level. The list goes on.

Within the first few months it will become increasingly clear how the federal government intends to tackle these issues. Those efforts, led by a Democratic president and an expanded Democratic majority in Congress, might look drastically different from those of the last eight years under Republican President Bush. What won’t change, however, are the attempts by special interests to influence legislation, even those that have less money to spend than in recent years and that have to adjust their strategies for the first time in nearly a decade to win over Democrats.

The following is a look at some of the key issues that Obama, whose inauguration is Jan. 20, and Congress will be working on in the coming months–along with the industries, sectors and groups trying to influence the debate.

Economic Stimulus

Lobbyists representing every industry are lining up on Capitol Hill
with sharp elbows and open hands. Coalitions are forming coalitions of
coalitions. Enemies are joining forces and allies are being divided.
With the country facing the worst economic crisis since the Great
Depression, everyone wants to make sure to get a piece of the whopping
$775 billion economic stimulus package currently on the table, and
they’re willing to cough up the extra cash, despite the hard times, to
put their lobbyists on the job.  

A bulk of the giant relief
package will be dedicated to tax cuts, but Congress has yet to
determine how those will get divvied up. Business lobbying groups
representing a diverse clientele are pushing for tax breaks for the
industries they represent, including carpet and rug dealers, airlines, hotels
and biotech companies. Some want lawmakers to give consumers refundable
tax credits to spend on their goods. Others want tax credits for hiring
new employees. In general, big business associations
seek a tax holiday for offshore income, tax refunds on taxes paid
during profitable times in the last five years (rather than two) and
the ability to write off 50 percent of new equipment costs the year of
the purchase.

At the head of the pack is the Chamber of Commerce,
which spent at least $58 million on lobbying in 2008 and wants to see
tax breaks across the sectors. The Chamber, joined by lawmakers at
local levels and lobbyists for the transportation, labor and construction
sectors, has also urged Congress to fund infrastructure projects. An
alliance called Transportation for America is more specifically focused
on “clean” transportation. The Associated General Contractors
have submitted a long list of construction projects that can get
underway immediately with funding. And the Conference of Mayors,
National Governors Association and National Association of Counties
are each trying to obtain funding for infrastructure projects in their
jurisdictions. Their efforts are complicated by the prohibition of
earmarks in the legislation.

In addition to an upgrade of
health-care technology, increased funds for food stamps and Medicaid
and an extension of unemployment benefits, the stimulus package also
focuses on creating “green” jobs and ramping up the country’s renewable
energy efforts. The American Wind Energy Association and Solar Energy Industries Association,
which together spent at least $1.4 million on lobbying last year, have
called on Congress to make their industries’ tax credits refundable so
that they can successfully meet President-elect Obama’s goal of
doubling renewable energy production over the next three years. Environmental groups, such as Friends of the Earth, are supporting efforts to replace old buses with “clean energy” vehicles and to create more bike and walking paths.

Health Care

In what appears to be a strategic move, the health sector has been
paying less attention to what the doctor ordered and more attention to
what the Democrats ordered–and that’s campaign cash. In the 2008
election cycle, an unprecedented 54 percent of the recently
Republican-leaning industry’s nearly $150 million in contributions
went to Democrats. Compare that to the last presidential election in
2004, when Republicans collected 61 percent of the $123.7 million that
the health sector gave. The sector also spent at least $73.5 million
more on lobbying in the ‘08 cycle than it did the election cycle prior to that, $804.1 million compared to $730.6 million.

Under
a Democratic president who touted health care reform on the campaign
trail and an expanded Democratic Congress, this year could be one of
many changes for the health sector. Organizations such as the American Medical Association, which represents doctors, and AARP, which advocates for retirees, were frustrated after President Bush twice vetoed a measure to expand the State Children’s Health Insurance Program
(SCHIP). But the new Congress is moving fast to pass the bill–the
House approved it this week. President-elect Barack Obama could sign it
within days after being sworn in, should the Senate also pass it, as
expected. Obama voted for expanding SCHIP as a senator and denounced
Bush’s veto. The AMA spent at least $15.5 million on lobbying measures
in 2008, while AARP spent $21 million. Obama collected $16.8 million
total from the health sector for his presidential campaign. Other Democrats are already spearheading efforts to expand Medicaid to cover more uninsured adults.

Insurance companies, represented by groups such as America’s Health Insurance Plans,
however, will be fighting any proposals that could take business away
from the private sector. This includes SCHIP and any reform giving
Americans the choice to opt into a government-run plan, which could be
a reality under the Obama Administration. Insurance companies spent at least $116.1 million on lobbying in 2008. Pharmaceutical companies
will also be on the defensive. Led by lobbying powerhouse PhRMA, the
industry will continue to try to fight off a measure that requires drug
companies to disclose all of their gifts and payments to doctors, and
another that gives the FDA the authority to ban direct-to-consumer
advertising for new drugs. Drug companies spent at least $171.7 million
on lobbying in the first nine months of 2008.

In Obama’s first
few days in the White House, he may also reverse President Bush’s 2001
executive order prohibiting the funding of research involving new
embryonic stem-cell lines. If members of Congress wanted to make it
difficult for a future president to backtrack, they could pass a
measure later in the session in support of embryonic stem-cell
research. Several special interest groups are gearing up to influence
such a move, including biotech companies, who would benefit; anti-abortion organizations, which oppose stem-cell research on moral grounds; and health professionals and pharmaceutical companies, whose industries could be profoundly changed by such research.

Labor

Union members and PACs overwhelmingly favor Democrats, always giving at least 87 percent of all campaign contributions
to Democratic candidates, committees and parties. This year the sector
will no doubt be looking to cash in on that support and is hoping to do
so early on with the passage of the Employee Free Choice Act, a measure
that would allow a company’s workers to unionize if a majority of them
sign cards supporting the effort. This would replace the current
secret-ballot election, which unions say allows companies to bully
employees into opposing labor organizing.

Labor has another
ally in the new president, who co-sponsored the Employee Free Choice
Act in 2007. Labor unions gave President-elect Barack Obama
$388,500 for his presidential bid and many of the largest unions
fervently endorsed him in the 2008 election cycle, spending millions
independently to put him in office. The sector also spent at least
$29.3 million in lobbying expenditures in 2008 (lobbying end-of-year reports for ‘08 are due Jan. 20). A handful of large unions, including the Service Employees International Union, which gave $2.2 million in campaign contributions in the 2008 election cycle, and the United Food and Commercial Workers, which gave $2.1 million, have joined forces as the Change to Win federation. The nation’s largest labor union, the AFL-CIO,
gave $2.3 million in contributions and is also campaigning for the
measure, which passed the House in 2007 but was killed by the Senate.

Although
the stars seem aligned for labor unions, business groups are trying to
eclipse their efforts. At the center of the opposition is the affluent
and influential U.S. Chamber of Commerce,
which has spent more money on lobbying than any other organization, in
any other sector over time. In 2008, the
Chamber spent at least $58 million on lobbying–$28.7 million more
than all labor unions combined. Other business associations, such as the National Restaurant Association, which spent at least $2 million lobbying in 2008, National Association of Manufacturers, which spent $6.5 million, and the National Federation of Independent Business,
which spent $3.1 million, are also joining forces as the “Coalition for
a Democratic Workplace.” These groups say that doing away with secret
ballots will result in pro-union employees intimidating their
colleagues. But, according to the New York Times, union victory rates
tend to be higher through majority signups, and business groups fear
stronger unions will drive up labor costs.

Some high-tech interest groups have also come out against the bill. The president and CEO of the Consumer Electronics Association,
which represents 2,000 tech companies, said that some members have
threatened to move their operations overseas if the legislation passes.
The Consumer Electronics Association spent $1.3 million lobbying last
year.

Climate Change/Energy

While money has helped traditional energy industries get their way on
Capitol Hill in the past, greenbacks are only going to get so far with
this new type of green-minded Congress and administration.
President-elect Obama and many congressional lawmakers see renewable
energy as a means not only to slow global warming, but to create jobs
and revamp the economy–efforts that are taking precedence despite the oil and gas industry’s $31.1 million in contributions in the 2008 election cycle and $94.5 million in lobbying expenditures last year.

Although environmentalists and alternative energy
producers have never had the kind of capital it takes to win over
congressional allies (these groups together gave $4.4 million total in
campaign contributions in the last election cycle), this could be the
year they see at least some of their legislative wish list fulfilled.
Congressional Democrats are working on measures that provide incentives
and funding for clean-energy technology and that mandate that a greater
percentage of U.S. electricity come from clean-energy sources.

This
year’s agenda could also include comprehensive climate change
legislation that aims to control global warming through a cap-and-trade
program, essentially punishing the companies that pour the most carbon
dioxide into the atmosphere and rewarding those who don’t. Business associations, which spent at least $82.8 million lobbying in 2008, along with energy production companies and chemical
and manufacturing companies, argue that such a move will be expensive
for American industry and could drive more manufacturing overseas. Last
year the U.S. Chamber of Commerce
opposed a climate bill that would have put a cap-and-trade system in
place, arguing that it would result in significant job loss. As the top
all-time spender on federal lobbying, the Chamber has a significant
presence on Capitol Hill. The bill didn’t pass.

Oil and gas
companies also got their way last year when Congress voted to let the
moratorium on offshore drilling expire, but will be fighting any
legislation now that tries to prevent production in those coastal
areas. Nuclear power companies will be opposing carbon taxes and
arguing for the safe storage of nuclear waste. Coal mining companies and electric utilities
that rely on coal, too, will continue to lobby on clean-coal technology
and already have Obama’s support. Prominent environmental groups, such
as the Sierra Club, however, have called clean coal a myth.

Agribusiness
companies, too, have a stake in energy-related issues and will be on
Capitol Hill to argue for money to help them continue the controversial
development of biofuels from ethanol. This agenda will likely be
spearheaded by the Alliance for Abundant Food and Energy, a coalition formed last year by a few major agriculture companies, including Monsanto and Archer Daniels Midland.
In 2008, the coalition spent at least $20,000 on lobbying. But the companies
have also launched an independent assault, spending $6.6 million and
$1.8 million, respectively, on lobbying in 2008. Obama has said he will
support measures that help fund the development of ethanol-based
biofuels. He received nearly $2 million from the agribusiness sector
during his presidential run.