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Debt Talks Worry Lobbyists

K Street Uneasy Over Possibility That Industry Tax Provisions Could Be Nixed

Tom Williams/Roll Call

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K Street lobbyists are scrambling to defend industry tax breaks and spending programs from ending up as fodder to reduce the deficit in the debt limit talks led by Vice President Joseph Biden.

A lack of news about the specific cuts under consideration by the close-lipped bipartisan group, coupled with last week's surprising 73-27 Senate vote to eliminate long-sacrosanct ethanol tax subsidies has put lobbyists in a defensive crouch.

Congressional negotiators left Tuesday's three-hour meeting without a deal and refused to comment on details of what proposals are under discussion. The lawmakers are slated to meet again today, Thursday and possibly Friday, and they are under pressure to announce at least the framework for a broader deal to give Congress time to digest it before the August recess. They've set a July 1 deadline for themselves.

All of that means it's a tense time to be a lobbyist.

"The thing that is really driving people nuts is there is no information," one Republican lobbyist said. "There is no chatter. ... I think that is driving the nervousness."

The oil and gas industry and private equity companies, which have so far staved off changes to their tax breaks, are watching carefully, given that some Republicans now say they are willing to eliminate industry tax breaks to reduce the deficit.

There is a general push ­ particularly from Republicans to delay any talk of trimming tax breaks until a broader tax reform plan can be negotiated, but in the meantime, it seems as if every industry is on its own in fighting for its narrow set of tax provisions. The ethanol industry, for example, is still trying to save its tax subsidy from the chopping block by pointing to the tax breaks oil and gas have received for nearly a century. And oil and gas companies aren't sitting on the sidelines, either.

"I think they continue to educate the Members on the Hill on how important these things are for everybody," one Republican lobbyist said of oil and gas and wind energy companies. "When push comes to shove, we'll see what happens. ... Any entity that has certain types of tax treatments is very worried."

The anxiousness appears to be warranted.

Senate Republican Conference Chairman Lamar Alexander (Tenn.) last week came out strongly for eliminating tax breaks to reduce the deficit a position that took on the party's long-held orthodoxy embodied in Americans for Tax Reform's anti-tax pledge. Most Republicans, including Alexander, have signed that pledge to resist tax increases in any form.

But Alexander made it clear again Tuesday that he didn't feel bound by ATR President Grover Norquist's pledge.

"My only pledge is to the United States flag and to the United States Constitution, and I've forsworn all others," Alexander said.

But he said getting rid of tax breaks should be part of a larger tax reform overhaul, not the Biden deficit talks.

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