NAM Role in Three Hot Debates Wins Attention

Posted January 14, 2005 at 5:56pm

It’s not unusual for one of the major business trade groups in Washington to be involved in a high-profile legislative fight.

It is more unusual for the same group to be leading three of the most high-profile fights simultaneously. But that’s exactly what the National Association of Manufacturers is doing as the 109th Congress gets under way.

NAM is emerging from a bruising couple of years in which mergers, corporate failures and downsizing among manufacturing companies reduced the group’s membership by 2,000 from a peak four years ago of 14,000.

Yet the group’s new leadership — including its CEO, former Michigan Gov. John Engler (R) — is making aggressive efforts to promote Social Security reform, an asbestos settlement and the confirmation of conservative judges.

It’s no small task — and it’s one that emerged more by chance than by design.

“The fact that the issues are now ripening legislatively is circumstantial,” said Mike Baroody, senior vice president for NAM.

Indeed, the NAM-led Alliance for Worker Retirement Security — so far the only coalition of business interests working to push President Bush’s Social Security revamp — was actually created seven years ago and lay mostly dormant until late November, after Bush began emphasizing changes to Social Security as a major facet of his second-term agenda.

Similarly, the Asbestos Alliance, which NAM co-founded three years ago with the American Insurance Association, is only now gripped by hyperactivity as a settlement on asbestos-related lawsuits finally appears to be approaching.

Later this month, Engler, who took NAM’s reins in October, will formally unveil a campaign to promote Bush’s judicial nominees.

If NAM’s sudden prominence is partly a coincidence, Baroody says it’s a happy one.

“I think it speaks well of NAM that we’re in the lead on these issues,” he said.

Which business lobbying group takes the lead on a particular policy issue is no trivial matter. Within the universe of leading business associations, cooperation sometimes alternates with tension, and institutional egos play a big role.

The most influential groups that serve a diverse cross-section of businesses — a coterie typically defined as NAM, the U.S. Chamber of Commerce, the National Federation of Independent Business and the Business Roundtable — have a common set of interests that make them natural allies on most issues.

But they also can find themselves in competition for members — and, specifically, for the dues those members pay, which provide a large share of their budgets. So while big and small companies in specific sectors, from railroads to bakeries, are likely to join a group that represents their specific industry, they may have to be sold first on the benefits of joining a broader umbrella group.

While this Darwinian contest affects each of the four groups slightly differently, the NAM is more susceptible than some of its peers.

At the NAM, dues still account for at least 90 percent of the group’s budget — a number that is worrisomely high, Baroody said. He added that the NAM is looking for ways to bring it down to 80 percent by boosting revenue from new services, such as a site-selection network and a service that searches for overpayments in members’ tax filings.

To remain financially strong, each of the big four has to make a case for its relevance. And one key way to do that is to take the lead on pushing policies that help business.

Lee Culpepper, of the National Restaurant Association, cites his group’s leadership of coalitions designed to fight minimum-wage increases and push for changes to overtime regulations, as well as the Fiscal Responsibility Coalition, which focuses on the budget.

Lobbyists for the Chamber pointed to their work on a range of issues, including some on which they share turf with NAM, such as asbestos and now legal reform.

The Chamber’s Institute for Legal Reform last year spent untold millions of dollars to put the screws to class-action lawsuits, medical malpractice payouts and asbestos torts, among others. In fact, the institute ranked second only to the Chamber itself for lobbying spending by a Washington organization during the first half of 2004.

Lobbyists for the Chamber reacted to news of NAM’s planned campaign — first reported by the Los Angeles Times — by welcoming the group to the fray.

“We’re very pleased they’ve decided to join the legal reform effort,” said Stanton Anderson, the Chamber’s chief legal officer. “We’re looking forward to working with them as they do their thing and we continue to do ours.”

But Anderson added that the Chamber’s efforts at legal reform would continue on the legislative track and lobbying to help win confirmation for judges would not be a “primary focus.”

For NAM, stepping into the debate over judges — which was defined during the previous Congress by concerns over abortion and gay rights — is sure to garner attention.

“I’d have to say it’s a unique and surprising approach,” said BRT President John Castellani. “I have to give them credit for being innovative.”

But for the newly installed Engler, the approach has the dual allure of benefiting members while also helping the association.

The bulk of the work done by federal courts affects manufacturers, Engler said, so it makes sense for manufacturers to try to accomplish “systemic reform” of the judicial system.

Meanwhile, NAM’s position in the debate raises the group’s profile, encouraging members to stay with them.

“Maybe a bit more visibility on our part is creating a little bit of buzz with some of our members,” Engler said at a legislative briefing last week. “And so the renewals have gone quite well.”

In acting decisively to re-energize the NAM, Engler follows in the footsteps of the Chamber’s Thomas Donohue and BRT’s John Castellani, who took the helm at a time when their groups had reached a low ebb.

Castellani, who has won praise from his peers for transforming the BRT into a lobbying force, describes it as creating a “virtuous cycle.” Namely, the more influential a group becomes, the more members it can attract, which in turn makes it more influential and attracts more members.

Baroody said the group’s 35-person lobbying operation hasn’t suffered despite the dip in membership. Leading three campaigns will help leverage the NAM brand without spreading the in-house lobbyists too thin, he said.

Ultimately, Baroody said, while raising the group’s profile helps, their success will be measured in terms of legislative wins.

“The principle objective is to get the victories,” he said.