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Roll Call

K Street Tries to Woo the New Cast of Powerbrokers

The financial services industry wants one thing from the 112th Congress: gridlock.

Fresh off a brutal legislative fight over the sector’s new regulations, banking sources say they welcome the altered Congressional landscape with Republicans in control of the House.

“At this juncture, gridlock is all we can hope for,” said one high-level GOP financial services lobbyist. “We need a breather from all this regulation.”

But as Wall Street puts its money on inaction, other sectors such as high tech and manufacturing hope the new majority spurs movement on stalled tax cuts and free-trade pacts.

No matter their specific agendas, all industry and interest groups have something in common: They are readjusting priorities, rethinking strategies and trying to make new friends in the incoming Congress.

It’s not a simple task.

With the Republicans wiping out dozens of incumbents, stakeholders in areas such as defense, health care, big business and transportation now have to deal with a new set of players and an upended agenda.

Business groups such as the U.S. Chamber of Commerce, which shelled out millions of dollars to defeat many Congressional Democrats, have enthusiastically welcomed a new Congress they think will be friendlier to their agenda. 

“We agree with voters across the nation,” chamber CEO Tom Donohue said in a recent statement.

The National Association of Manufacturers is hoping that the lame-duck Congress will extend all of the Bush-era tax cuts, including those that affect upper-income earners.

“In the short term that appears to be the low-hanging fruit,” said Aric Newhouse, NAM’s senior vice president for policy and government relations.

Defensive Line

For other sectors that favored incumbent Democrats in their campaign-giving, the turnover in the House is more wrenching and will require a rethinking of how they approach Capitol Hill.

“Defense industry executives are shocked by the decimation of Democrats on key committees,” said Loren Thompson, a defense analyst at the Lexington Institute. “Now they have to learn to deal with a different cast of characters.”

Thompson said defense companies, which rely heavily on federal contracts, had come to depend on influential Democrats who lost their re-election bids, including three senior members of the House Armed Services Committee: Chairman Ike Skelton (Mo.) and Reps. Gene Taylor (Miss.) and John Spratt (S.C.).

Even though Republicans have said they will spare defense from major budget cuts, Thompson said company officials are wary of those pledges, particularly with the election of deficit hawks backed by the tea party such as Sen.-elect Rand Paul (R-Ky.), who campaigned on a platform to slash government spending.

Tech Doom?

The election of a Republican majority in the House will almost certainly doom efforts by the high-tech industry to push through one of its top priorities, net neutrality legislation.

“I think it loses some of its steam,” said Kara Campbell, a GOP lobbyist with the Franklin Square Group, which represents high-tech companies. A prominent net neutrality proponent, Rep. Rick Boucher (D-Va.), who chairs the Energy and Commerce Subcommittee on Communications, Technology and the Internet, lost on Election Day. Most Republicans, including the likely new chairman of the subcommittee, Rep. Cliff Stearns (Fla.), oppose new Internet regulations.

Campbell said high-tech companies will likely shift their focus to other issues such as supporting an extension of research and development tax credits and free-trade agreements. 

She said there may be some adjustments on the lobbying teams of tech companies but added that many already are fairly balanced in terms of partisan makeup.

Different Prescription

A top priority of the Republicans is to repeal the health care overhaul that was accompanied by an unprecedented lobbying frenzy by opponents and proponents.

But the health care industry is unlikely to devote a huge amount of resources directly to the repeal effort, according to medical-sector insiders.

“I don’t envision an appetite for that,” said Mark Merritt, president of the Pharmaceutical Care Management Association. Merritt, a former GOP consultant, said that health-care-related associations will more likely put their resources toward trying to tweak provisions that directly affect them in the health care law.

Health care reform champion Ron Pollack, president of Families USA, said that while industry groups don’t want to upset Republicans, they will also be wary of alienating Democrats, who still control the Senate and the administration, which is now implementing the law.

One health care lobbyist said that if health care and business interests do get involved in the repeal fight, it will be through anonymous funding of outside conservative groups that were active in the midterm campaigns.

Lubricating the Lawmakers

Oil companies, slammed by Democrats following BP’s oil rig explosion in the Gulf of Mexico last spring, are expecting a friendlier reception on Capitol Hill from the GOP leadership, which has generally opposed restrictions on offshore drilling.

Frank Maisano, an energy specialist at Bracewell & Giuliani, said he expects “a more balanced approach to policy discussions,” rather than what he said has been a “political inquisition.”

But Maisano also said there was a downside to the elections — the loss of conservative Democrats who have supported the industry such as Sen. Blanche Lincoln (Ark.) and Reps. Chet Edwards (Texas) and Charlie Melancon (La.).

Having support from those lawmakers bolstered the energy industry’s arguments that it had bipartisan backing for its positions.

Trading Jabs

The White House and Republicans have indicated that one area they can work together is trade, and there are a number of pending agreements, including one with South Korea.

Lobbying has already begun anew on the matter, with Ford Motor Co. running ads two days after the elections seeking changes to provisions in the South Korean free-trade agreement. The auto giant is concerned that the trade pact won’t sufficiently open up the auto market in South Korea to U.S. exports.

The print ads were timed to coincide with President Barack Obama’s embarking on a trip to Asia, where he will attend the G-20 summit this week in Seoul.

“We didn’t let the dust settle on the election before we returned to policy issues at hand,” Ford spokeswoman Christin Tinsworth Baker said.

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