Lobbyists see earmark business turn to ashes


Kevin Bogardus and Roxana Tiron, The Hill

Lobbyists who have built their careers around securing congressional money for clients are facing the biggest squeeze yet on their business as earmarks begin to disappear from Washington.

Since capturing the House in the midterm elections last week, Republican leaders have affirmed their support for a plan that would outlaw earmarks in the lower chamber during the next Congress.

Lobbyists on K Street contacted by The Hill expect the ban will apply to Democrats in the minority as well, essentially taking billions of dollars out of the hands of House lawmakers.

The earmark ban “is going to lead to long-term change on K Street,” said Michael Herson, the president of American Defense International, one of the largest defense consulting and lobbying firms in Washington. “You will have to be able to perform a broader service rather than just get earmarks. The focus would shift to the policy and the bigger picture.”

Lobbyists had expected the Democrat-led Senate to continue with earmarking, but the anti-spending mood is now spreading to that chamber as well. Eleven Republican senators and senators-elect, led by Jim DeMint of South Carolina, are calling on their conference to join the earmark moratorium proposed by the House.

The earmark vote pits DeMint, a favorite of the Tea Party, against GOP Leader Mitch McConnell (Ky.), who has argued a ban would do little to control spending while weakening congressional authority.

DeMint will force a secret ballot on an earmark ban next week. Spokesman Wesley Denton said DeMint expects the measure to pass the Republican Conference, although it won’t have the force of law.

A ban on earmarking among Republican senators wouldn’t prevent Democrats from continuing the practice, though they could face political pressure from centrists to disavow it.
But even if the House stands alone in banning the earmarks completely, lobbyists concede that big changes are in store for what has long been the bread and butter of their business.
Anticipating the fervor against earmarked spending projects, lobbyists have been quietly preparing their clients to find new avenues of federal funding.

“Lobbyists will adjust, just as we have for the past 200 years,” said Howard Marlowe, president of Marlowe & Co. “The legislative system still needs advocates, and members of Congress will always need lobbyists for both reliable information and political contributions.”

Several lobbyists predict that an expansion of the earmark ban to both parties in the House will substantially reshape the lobbying profession.
Boutique lobby firms, which built their model on appropriations, could face extinction, while larger firms may have to shift their focus to legislative consulting and broad policy areas.

“Absolutely, we have seen the environment surrounding earmarks getting tougher for years,” said Jeff Green, a former House Armed Services Committee aide who founded J.A. Green & Co., a government-relations firm. “We’ve built our model by focusing on good public policy and the defense authorization bill.”

Some lobbyists fear that if House Republicans expand the earmark moratorium next year, presidential politics in 2012 would compel them to keep it in place. President Obama said in a press conference last week that he could see his administration working with Republicans to ban earmarks.

If the House imposes an earmark ban in the 112th Congress and the Senate does not, the lobbying industry will turn its attention to the upper chamber. Senators could find themselves under intense pressure to approve spending projects.

“It will be double duty and double pressure for senators and Senate appropriations staffers,” said Mike Fulton, executive vice president of GolinHarris Public Affairs.
A House-only moratorium would also set up a showdown on spending, since House members would have to vote on appropriations bills laden with earmarks by senators.

“If House Republicans have a moratorium and the Senate does not, then it means another year of appropriations gridlock,” Marlowe said. “The only one who wins, ironically, is President Obama, who can take credit for ‘working across the aisle’ to end earmarks.”

One Republican appropriations lobbyist already has a blueprint for moving forward in the next Congress.

“One, to continue the focus on Senate contacts. Two, to keep up vigilance with working with the administration on the competitive grant process,” the lobbyist said. “The more productive lobbyists have counseled their clients to do just that.”

This Congress, House Democrats limited their earmark requests to nonprofit projects, while Republicans imposed a moratorium.

According to an analysis by Taxpayers for Common Sense, a budget watchdog group, the fiscal 2011 House spending bills have close to 3,000 earmarks worth $3 billion, while the Senate spending bills have more than 3,700 earmarks worth $6 billion.

None of those bills have become law. Capitol Hill is expected to finalize them either in an omnibus bill or a congressional resolution during the lame-duck session.

One of the biggest targets for earmarks has been the Pentagon’s annual spending bill, which has long been earmarked by lawmakers to direct money to defense company projects in their districts.

Herson of American Defense International said lawmakers in a post-earmark environment might shift their attention to adding money for under-funded Pentagon accounts in the defense bills rather than including money for a specific company in their particular district.

Lobbyists are keeping a close eye on the proposed House moratorium to see whether it is simply an edict from the Republican Conference or part of the new rules package. The former could limit the earmark ban only to Republicans; the latter would expand it to Democrats.

In a Wall Street Journal op-ed last week, Rep. John Boehner (R-Ohio), likely the next House Speaker, wrote that “the House must adopt a moratorium on all earmarks as a signal of our commitment to ending business as usual in the spending process.”

A GOP leadership aide said the earmark moratorium would extend to both parties, but would not say if it would be included in the next rules package.

Even if the ban were placed only on the majority party’s members, it seems unlikely that Democrats could still secure earmarks, since Republicans would be in charge of the appropriations bills.

“Think about it — a cardinal denying themselves earmarks and then shepherding a bill through the process with minority party earmarks. Never gonna happen,” said Steve Ellis, vice president of Taxpayers for Common Sense.

Another question confronting K Street is whether the earmark ban stops at spending projects. Lobbyists are wondering whether tariff suspensions, tax provisions, infrastructure projects and other specialized government spending will be defined as earmarks and end up on the chopping block.

“House Republicans would be giving up power by allowing the executive-branch agencies and senators to allocate the money they appropriate,” Fulton said.

J. Taylor Rushing contributed to this report.