The Joint Committee on Deficit Reduction has until Nov. 23 to come up with a plan to squeeze $1.2 trillion out of the federal budget, but that deadline is merely the beginning of the next phase for the armada of lobbyists, trade groups and other special interests that has gathered around the super committee.
For K Street, billions of dollars hang in the balance.
The 12-member committee has become the center of a lobbying blitz that’s drawn in literally hundreds of advocates of all stripes, from health care and defense industry behemoths to broadcasters, Native Americans, veterans and small-town mayors.
They’ve used every tool at their disposal, from high-dollar TV ads, run both nationally and in the backyards of the bipartisan super committee’s members, to grass-roots campaigns that have generated millions of letters, emails and phone calls to Capitol Hill. And the end of the super committee’s work will not be the end of the lobbying effort, no matter what the result.
“I think it will end up rivaling anything we saw with [the] health care or financial reform” debates of the previous Congress, said Bill Allison, editorial director of the Sunlight Foundation.
Though it’s too early to pick K Street’s winners and losers, defense contractors and their allies are increasingly nervous, while labor and senior-citizen activists defending entitlement programs may be buoyed by predictions that the super committee will fail to reach agreement on a package of cuts. Agriculture industry players acknowledge that the era of generous crop subsidies is over. Broadcasters fear that the panel may see voluntary spectrum auctions as a way to raise revenue.
Defense cuts have dominated super committee deliberations from day one. Industry lobbying expenditures have been relatively small, totaling about $160,000 in the third quarter, according to the Sunlight Foundation. By contrast, the health industry doled out $10 million in that period, making it far and away the biggest spender during the early phase of super committee deliberations.
Defense contractors have relied on their Capitol Hill allies and even on Defense Secretary Leon Panetta to deliver the message that deep Pentagon cuts would hurt military readiness and destroy jobs. Under the budget agreement, if Congress doesn’t approve the committee’s proposed savings by Dec. 23, it sets the stage for automatic, non-negotiable cuts, known as a “sequester,” evenly divided between domestic and military programs.
The ax would fall heavily on defense weapons systems and total at least $500 billion over a decade, military lobbyists say. That’s a scenario defense lobbyists and their allies, including GOP Sens. John McCain (Ariz.) and Lindsey Graham (S.C.) call unthinkable. Graham and McCain are already looking for a legislative escape hatch in the event of sequestration.
In contrast, senior citizen and social welfare activists defending entitlements programs now argue that sequestration might be a good thing. Last week, labor organizers and AARP, two of the loudest voices defending entitlement programs, mounted protests in Boston, Mass., the home state of Sen. John Kerry, one of six Democrats on the super committee.
“Ultimately, sequestration could be better than a bad plan,” said David Certner, the legislative policy director for AARP, which generated 7.8 million communications to Capitol Hill. If the committee does approve a plan, it cannot be amended, so the lobbying turns to a yes-or-no vote.
Liberal groups will make a final plea to protect entitlement programs Thursday, holding demonstrations on Capitol Hill and in cities around the country reminding lawmakers that the 2012 elections are just around the corner. About 150 programs worth about $1.7 trillion, ranging from food stamps to the president’s pay, are protected in the event of sequestration, meaning if the committee does not agree to specific cuts, these programs — and their champions — are safe.
An emerging scenario is partial sequestration, meaning the panel would come up with anywhere from $600 billion to $900 billion in savings from revenue raisers and spending cuts, relying on the sequester for the remaining cuts.
That worries health care providers, from drugmakers and insurers to hospitals and the home health care industry, who could face cuts as part of the panel’s plan only to be hit again by sequestration. The automatic cuts could shave up to 2 percent of annual Medicare spending.
“The worst-case scenario for some in the health care world would be to achieve a portion of the $1.2 trillion but not enough to affect the Medicare cap,” said one health care industry lobbyist. “To some, it could mean a double hit.”
Agriculture industry players are also fretting. They’ve turned to their allies on the Agriculture committees to protect their industry as the panel concludes its deliberations. Those committees are expected to send to the super committee this week legislative language detailing $23 billion in farm spending cuts.
“Most people in agricultural community recognize that direct payments are a thing of the past,” said Mark Maslyn, executive director of public policy at the American Farm Bureau Federation, the nation’s largest farmer’s group.
Even after Nov. 23, the lobbying won’t end. Congress has until Dec. 23 to approve or reject the panel’s recommendations in a straight up-or-down vote. That leaves four full weeks for lobbyists to shift their focus from the super committee to the full Congress. And if the committee has no plan, a frenzy over sequestration is likely to ensue.
“It’s going to be a long December, I think,” said Alex Brill, an economist with the American Enterprise Institute. “From a lobbying perspective, there’s going to be a lot of intense pressure from all sides on Members, between the day that we hear what the super committee recommends, and the day that the final vote occurs.”