Congress

The swamp successfully boils and bubbles in 2019

Lobbying clients took some losses, but corporate interests will end the year largely unscathed

K Street experienced some notable fails in 2019, as well as some big wins. (Bill Clark/CQ Roll Call)

K Street lobbying clients racked up some notable defeats this year: No return of earmarks. Drugmakers lost out in a new trade deal. And that mega-infrastructure package? Never happened.

But despite jitters over divided government and impeachment theatrics, corporate interests will exit year three of the Trump era largely unscathed, and some are downright giddy as they head into the potentially fraught 2020 campaign season.

A year-end spending deal was especially loaded up with last-minute wins, some unexpected, for a slew of K Street operators, from medical device makers to craft brewers.

“It’s important to recognize that these big deals don’t just materialize out of ether,” said Democratic lobbyist Andy Rosenberg, a founder of Thorn Run Partners. “Their underlying merit has been lobbied for months or longer to get them in a position to pass.”

K Street has had to adapt to a new way of doing business, lining up support for favored measures all year long and then pressing leadership and key lawmakers and the administration in the final days.

[Uncertain times could bring new lobbying strategies]

“True, the process has changed, and this has been a steady evolution over the past few years,” said Rosenberg, who has clients in the health care and medical device sectors, including the Medical Device Manufacturers Association.

Mark Leahey, president and CEO of the Medical Device Manufacturers Association, had been lobbying for a decade for the permanent repeal of a tax on medical device makers that was in the 2010 health care overhaul; lawmakers did just that in the spending deal. Leahey called some of the early years of the effort “lonely times” but said he and other groups built up overwhelming bipartisan support. “We’re thrilled,” he said.

Broadly speaking, K Street lobbying spending has gone up during the Trump administration, and the first three quarters of this year are roughly level with the same period last year, about $2.6 billion, according to a tabulation by the nonpartisan Center for Responsive Politics.

Driving that spending this year were trade and health care issues, plus business interests trying to shape government spending.

Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, said the end-of-year burst of legislative activity, culminating in a spending wrapup, included many of the business group’s priorities, such as the permanent repeal of health care and medical device taxes. The spending deal also included a seven-year reauthorization of the Export-Import Bank, another major priority of the top-spending lobbying group.

The chamber also supports a renegotiated U.S. trade deal with Canada and Mexico that the House is expected to pass this week and is on track to move in the Senate early next year.

“It all goes back to good policy, and getting things done makes good politics,” Bradley said. “Whether you’re an incumbent Republican or incumbent Democrat, being able to go back home and say, ‘We actually got some good things done for the American people to keep the economy growing and paychecks rising ...’ I hope that’s the lesson they’re taking from this and it’s one they can build on next year as we head into the election.”

Despite the wins, Bradley said his group was disappointed that lawmakers and President Donald Trump couldn’t cobble together a major infrastructure package or reach agreement over the status of Dreamers, a group of undocumented immigrants who were brought to the United States as children and are now adults.

The drug industry’s chief lobbying group, the Pharmaceutical Research and Manufacturers of America, said it wouldn’t support the United States-Mexico-Canada Agreement on trade because it did not include a provision that would have guaranteed makers of high-priced biologic medications at least a decade of market exclusivity for name-brand therapies before other manufacturers could offer cheaper copies.

Although PhRMA’s year could have been worse — it spent $22.5 million on lobbying in the first three quarters of the year — the drug lobby will again be on the hot seat in 2020 when it comes to proposals over prices.

Failure to launch

Despite high-powered K Street help and well-placed allies in the House, aerospace startups SpaceX and Blue Origin saw language they fought for stripped out of the fiscal 2020 defense authorization bill.

The companies, whose representatives and lobbyists declined comment or did not respond to inquiries seeking comment, had pushed for wording that would have made it easier for them to compete for bids to launch national security satellites.

Another K Street flop this year was the failure to bring back earmarks, or member-directed spending, despite behind-the-scenes efforts to do so on and off Capitol Hill. “It’s fair to say we’re disappointed,” said Howard Marlowe, a longtime lobbyist who believes they’ll make a return one day. “I think they’ll inch into it.”

AT&T, which owns satellite provider DirecTV, did not get the outcome it sought in a renewal of a longtime satellite television access law. Lawmakers did not renew the law but instead tacked on to the year-end spending measures some related provisions, including one that makes permanent a requirement that “pay TV providers,” such as satellite companies, and broadcasters negotiate in “good faith” during retransmission consent discussions, according to the National Association of Broadcasters.

“Under this legislation, AT&T-DirecTV will be encouraged to finally serve all satellite TV subscribers with their local TV stations,” NAB President Gordon Smith, a former Republican senator from Oregon, said in a news release. “The bill also ends the five-year renewal cycle of satellite TV legislation that has incentivized pay TV companies to deny carriage of broadcast TV stations during retransmission consent negotiations.”

A spokesman for AT&T referred comment to previous press statements, including one in the summer from Tim McKone, the company’s executive vice president of federal relations. “Amid cord-cutting, growing video options and internet-based platforms, broadcasters use their special protections in current law to continue to demand price increases from the customers of cable and satellite distributors for TV programming that consumers watch less and less,” the statement said.

Seeking Facebook friends

Social media and technology companies saw mixed results in Washington this year.

Sure, lawmakers targeted Facebook and others with scathing rhetoric, but most technology interests were pleased with the new U.S.-Mexico-Canada trade deal text, which offers them immunity from lawsuits over the content on their platforms. Even Facebook’s whopping $5 billion fine from the Federal Trade Commission may not be as bad as the company’s policy opponents would have wanted.

“I would consider the Facebook settlement to be a win for Facebook,” said David Segal, executive director of the liberal group Demand Progress. “We were pushing for structural remedies.”

Though it was the agency’s biggest fine in history, Segal says his group does not believe it was enough and wanted to see the social media giant forced to spin off some of its holdings, such as Instagram.

Segal said business interests had a good year generally, including regulatory rollbacks in the executive branch. Additionally, a merger between SunTrust and BB&T banks won approval.

Craft brewers were pleased that they got a one-year extension on a recalibrated excise tax included in the year-end spending and tax bargain.

Tonya Saunders, a longtime lobbyist who represents the Federally Employed Women, says her client had a win in the defense bill, which included a provision to give federal employees paid family leave. “That’s been one of their top issues for many years now,” Saunders said.

Lobbyist Stu Van Scoyoc, who runs Van Scoyoc Associates, said his firm scored client wins on some major deals but also on niche measures such as spurring movement in July on a protocol amending the tax convention with Spain, ratified by the Senate. It was a big deal for North American Stainless, a client of one of the firm’s lobbyists, Shannon Campagna, Van Scoyoc said.

“It saved the company millions of dollars,” he said.

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