Borrowing $787 billion from the next generation and spending it as rapidly as possible may or may not provide a jolt to the U.S. economy. But one thing is certain: H.R. 1, the Economic Recovery and Reinvestment Act, has already triggered a lobbying boom, suggesting once again that the Age of Obama will be a golden age for K Street.
The stimulus has spurred small companies to jump into the lobbying game for the first time and big companies to bring in new hired guns.
For example, the National Association of Home Builders hired Baker & Hostetler a week after Barack Obama’s inauguration to lobby explicitly on the stimulus bill, which, in the end, included an $8,000 credit for home purchases.
Better Place Inc. is an electric car company that hired its first lobbyist — Steve McBee, a former staffer for House appropriator Norm Dicks, D-Wash. — to push for electric car incentives in the stimulus. The resulting cornucopia included an expanded tax credit for plug-in cars, $2 billion in funding for electric car batteries and $400 million to build an electric car infrastructure, complete with recharging stations.
Media giant Time Warner added to its lobbying army, hiring the firm Parven Pomper Strategies to lobby for broadband subsidies in the bill. These subsidies included $2.5 billion to underwrite loans to get broadband out to rural areas and an additional $4.7 billion in spending on other broadband projects. Similarly, network giant Cisco Systems lobbied for the broadband subsidies in H.R. 1.
In all, dozens of lobbying firms have landed new business thanks to the stimulus bill, a review of federal lobbying files reveals. In the first weeks of this year, about 50 companies, trade associations, municipalities or nonprofits retained new lobbyists explicitly to lobby on the stimulus bill.
Luring states, counties and towns into the lobbying scrum has been a primary effect of the Economic Recovery and Reinvestment Act. Since Election Day, 27 counties and 45 cities or towns have hired new lobbyists.
On this score, Holland & Knight might take top honors. Since Election Day, the Florida-based global law firm with offices on Pennsylvania Avenue has landed six cities, four counties, five local government agencies, one village, one confederation of Indian tribes and the League of California Cities.
These are just the new lobbying contracts the stimulus has spawned. Everyone who has been lobbying for a subsidy, a handout or a tax carve-out redoubled his efforts when Obama announced his massive spending bill even before taking office.
And the Obama lobbying boom isn’t confined to the Beltway. In state capitals, where so much of these billions will be parceled out, lawmakers see the boom, too. In Georgia, for instance, legislators gathered in Atlanta looking for the best way to trim spending amid a revenue downturn. When the stimulus passed last week, however, things changed. “All of the sudden, everyone’s got their hands out,” state Sen. Preston Smith told this columnist.
Does the lobbying boom matter? Even if you reject Obama’s anti-lobbyist, man-of-change rhetoric from the campaign trail, there are costs. Some of these new lobbyists, once they’ve gotten their slice of the stimulus pie, might say farewell to Washington, but most will stick around. They’ll find new ways to game Washington for a profit — new subsidies and new regulations to drive business their way or hurt their competition.
The lobbying swarm over the stimulus also tells us something about the likely stimulative effects of the bill — and Congress’ motives in crafting it.
Congressmen and the White House say the point of this bill is to prime the pump on the economy. But how did the individual provisions end up there? Did some economist tell House and Senate conferees that, say, a tax break for parents who have college kids and buy computers and software (Section 1005) would be an efficient way to improve employment? Or more likely, did the computer and software industry write that into the bill?
And on legislative intent, was Congress trying to boost the economy or reward interest groups that can help their re-election?
The stimulus bill will be just the first example of a lesson unsurprising only to those unfamiliar with the way government works: Obama cannot simultaneously make government bigger and make lobbyists less influential.
Lobbying Editor Timothy P. Carney also writes
a Friday op-ed column for The Examiner. He can be contacted at [email protected].
