A massive White House spending proposal on infrastructure and other domestic priorities is setting the stage for a potential lobbying blitz on Capitol Hill, particularly as more lawmakers embrace a return to earmarks.
Lobbying shops on K Street are eager to take on clients big and small who would be competing for new government funding in the legislation expected to hit $ 3 trillion, and lobbyists on both sides of the aisle are excited about earmarks opening up new avenues of advocacy.
“Anytime you have a bill of this magnitude, if you’re a lobbyist you wake up and you say to yourself, ‘This could be good. There’s going to be a lot of opportunity,’” said Ivan Zapien, a partner at Hogan Lovells.
K Street experienced a revenue boost under the four years of President TrumpDonald TrumpGood luck, Dan Bongino! The Hill’s Morning Report – Biden’s next act: Massive infrastructure plan with tax hikes Conservative group says polling shows Dems’ voting rights bill ‘out of sync with American voters’ MORE and that isn’t likely to slow down with this spending package. Lobbying firms are expecting to see high revenues and make more hires this year. Beefing up teams to focus on reaching more lawmakers typically comes around a new administration and new Congress, but that could be extended with a massive spending bill.
The Build Back Better jobs and infrastructure proposal will be two separate bills. One, expected to focus on infrastructure, includes spending on manufacturing, climate change, broadband, 5G, and roads and bridges.
The other is expected to focus on pre-K programs, free community college tuition, child tax credits and health care subsidies.
“It really covers the gambit. It feels like almost every client is going to have some interest in the legislation,” said Ed Pagano, a partner at Akin Gump. “This is really the beginning of the process. A lot of client interest, expanding the spectrum among different industries because of the broad definition of infrastructure so far proposed by the administration.”
Lobbyists’ new clients could include telecommunications sector clients interested in broadband issues, energy clients interested in climate change initiatives and pharmaceutical industry clients interested in prescription drug cost proposals.
“When we talk about infrastructure, I think people should expand their view of what it means,” said Nadeam Elshami, policy director at Brownstein Hyatt Farber Schreck. “New opportunities are presenting themselves with startups and clients in the technology space. In this expanded definition of infrastructure, they’re exploring where they can advance their priorities.”
The top-line figure for the proposal could change, as talks are still in the process. But the administration has indicated that this package will be the next issue it tackles after the passed coronavirus relief.
“The confluence of infrastructure spending on this scale, combined with the energy, climate and tax implications across large sectors of the economy, are absolutely driving intense engagement on the Hill and with the administration,” said Alex Vogel, CEO of The Vogel Group.
There’s an overall excitement from lobbyists that an infrastructure package is happening, after years of waiting for legislation that could tackle the issue.
“The lobbying business is built on two things: creating opportunity and riding the wave of opportunity. I think a big bill like this is the latter. There is so much pent-up demand for infrastructure in the system. The Trump administration, you had ‘Infrastructure Week’ every other week,” Zapien said.
Elshami said many clients already know what issues they will want to advocate on.
“I think clients have had an opportunity to prepare for this day for almost nine years and some are just realizing that it’s time to engage. They’re all seeing the light at the end of the Infrastructure Week tunnel; you can see it. They all have their ideas of what they want to pursue, what they have been pursuing,” he said.
One major hurdle for infrastructure legislation is that Democrats and Republicans are split on how to pay for it. Vogel noted that the means to pay for the bill is a huge topic they expect to hear about from clients.
The business community is largely aligned with Republicans against raising the corporate tax rate. Biden has voiced support for raising the corporate tax rate from 21 to 28 percent, and there is also pressure from progressives to increase taxes on wealthy Americans.
“The long running joke about it finally being Infrastructure Week is finally coming to the punch line—government is going to make a lot of investment and someone is going to have to pay for it. We have seen intense interest — as the saying goes, you are either at the table or you are on the menu,” Vogel said.
The win from the $ 1.9 trillion coronavirus relief proposal recently signed into law, though, could help garner public support for this package.
“Democrats want to build on the momentum of the American Rescue Plan, and how Americans are receiving that, so they want to move quickly,” Pagano said.
There is growing momentum for a return to earmarks, which lobbyists are embracing as another way to sign new clients. Their return could intersect with an infrastructure package after earmarks were banned by Republicans in 2011 over concerns about corruption.
“I am glad to see the fever finally break around the misguided idea that the elimination of earmarks somehow restrains spending. It simply removes accountability from the process. Policymakers should absolutely play an active role in directing federal resources to places and projects they feel are worthy,” Vogel said.
Watchdog groups are excited about the legislation as a way to deal with infrastructure, climate change and global vaccine gaps, among other areas. But they have concerns that corporate lobbyists could influence it beyond its intended scope.
“We are really excited to see the level of scope and ambition. That said, whenever must-pass priority legislation moves, it is an opportunity for corporate lobbyists to come out of the woodwork and attempt to insert carveouts and pet projects. With that backdrop, the Biden administration and Congress must be vigilant to ensure that the bills remain focused on the big problems we face and helping regular people who really need it,” said Lisa Gilbert, executive vice president at Public Citizen.
Managing client expectations on a bill of this magnitude will also be a difficult challenge. Getting 60 votes in the Senate will be difficult, which would be needed to overcome the legislative filibuster unless Democrats use the budget procedure known as reconciliation.
“The administration is going big and bold and that they really have, in their view, learned the lesson from the Obama administration that you have to seize the moment. I think they’re going to go and try to do it with Democratic support and reconciliation. $ 3T is not a bipartisan number but it’s big and bold and you really try to move the needle here,” Pagano said.
- ^ President Trump (thehill.com)
- ^ Donald Trump (thehill.com)
- ^ Good luck, Dan Bongino! (thehill.com)
- ^ The Hill’s Morning Report – Biden’s next act: Massive infrastructure plan with tax hikes (thehill.com)
- ^ Conservative group says polling shows Dems’ voting rights bill ‘out of sync with American voters’ (thehill.com)
- ^ MORE (thehill.com)
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