Lobbyists Adjust to New Zero-Sum Budget Rules

New federal budget rules will force Congress to balance any tax cuts or spending increases with budget cuts. In response to the measures, lobbyists who advocate for a pet provision are now submitting ideas of what should be cut, as well.

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MICHELE NORRIS, host:

The new Democratic leaders in Congress and President Bush say they want to attack the budget deficit. And one way lawmakers are doing that is with new rules saying essentially this - if you want Congress to pass a new tax cut or spend money on a new project, you better find a way to pay for it. This means the lobbying game is about to get a little rougher, as advocates start taking aim at each other's pet projects.

NPR's Peter Overby reports.

PETER OVERBY: Suppose a corporation wants a tax break. Under these new rules, it needs to suggest an offset, a way to make up for lost tax revenue. So it hires a lobbyist. The lobbyist promotes the tax break and he finds that offset. Just tweak the tax on some popular new gadget that Congress hasn't focused on yet.

This actually happened in 1989 when similar pay as you go rules were in effect. The corporation was a small mining company. The lobbyist was Ken Keyes, formerly a Republican tax staffer on Capitol Hill. Now he's considered one of Washington's smartest tax code gurus. And the new gadget that Keyes targeted?

(Soundbite of cell phone ringing)

OVERBY: That's right. It was the cell phone.

Sitting in his office at the foot of Capitol Hill, Keyes remembers how he got the tax code changed. It became much harder to claim a cell phone as a business expense. He completely ambushed the cell phone industry lobbyists.

Mr. KEN KEYES (Tax code expert, Washington): They did wake up at the end, but it was too late to do anything about it.

OVERBY: It's a pleasing story for Keyes and now an instructive one for other, younger, lobbyists. A new generation has come up since that cell phone tax gambit. They have lived in a less competitive world, one where pay as you go and other restraints didn't apply. Budget numbers have steadily swelled and while Congress puts caps on spending, it also raises those caps when they get in the way. Now Democrats are trying to change the rules. Keyes says that calls for a more sophisticated lobbying game.

Mr. KEYES: If you hire somebody to advocate your position on the Hill and all they're capable of doing is parroting what you've told them, that is, we need to change this law to help us because we're good people or this will do good things for the economy, that's not going to be adequate anymore.

Mr. PATRICK MITCHELL (Democratic lobbyist): You'd certainly want to be prepared to answer the questions about how this will be paid for.

OVERBY: Patrick Mitchell is a Democratic lobbyist specializing in spending, not taxes, a different set of technical rules but similar strategic pressures.

Mr. MITCHELL: Those questions will be asked more and those questions will need to be answered if you intend to be successful.

OVERBY: Mitchell says the savvy lobbyist will promote programs that benefit more than one congressional district or more than one state. And lobbyists will start combing through the budget looking for existing programs that aren't as popular as they used to be.

Professor JAMES THURBER (American University): The lobbyists don't like that. It pits people against each other. It becomes a zero-sum game.

OVERBY: James Thurber is a political scientist. He also teaches classes in lobbying at American University in Washington. He says his advocacy students are taking these changes in stride. But on Capitol Hill, the atmosphere will be different.

Mr. THURBER: You don't know who your friends are sometimes because your friends may say hey we have to cut your program. So it really increases conflict.

OVERBY: But along with the conflict and the rivalries, it also gives those newly minted lobbyists a chance to show what they can do when there's no free lunch anymore.

Peter Overby, NPR News, Washington.

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