Lobbyists Anticipating Compromise From Narrowly Divided Congress

Lobbyists Anticipating Compromise From Narrowly Divided Congress

Lobbyists Anticipating Compromise From Narrowly Divided Congress

By Megan R. Wilson | January 11, 2021 1:58PM ET

Lobbyists are preparing for a rush of activity once President-elect Joe Biden is inaugurated and are optimistic that the narrowly divided Congress will find compromise on big-ticket legislation, particularly Covid-19 relief.

More than a half-dozen lobbyists who spoke with Bloomberg Government were bullish about the parties finding consensus within the new partisan dynamics that both congressional leaders and lobbyists will be adjusting to — despite the polarizing politics of Capitol Hill and around the country.

They expect the first legislative tests with Biden in the White House and Democrats holding the slimmest of margins in both chambers will come on Covid-19 relief, which was stifled for much of last year as House and Senate leaders failed to agree on the size and details of a package.

Jeff Forbes, a Democratic lobbyist and founding partner at Forbes Tate Partners, is telling clients that “everything’s going to start to happen really fast” when legislating in the Democratic-controlled House and Senate kicks off.

Lobbyists anticipate work related to the pandemic will be on the agenda for most of this year. And it will begin immediately. Biden is set to unveil a stimulus proposal Thursday that includes money for state and local governments, vaccine distribution, and the balance of the $2,000 stimulus checks proposed before the end of the year and promised by Biden when he campaigned in Georgia to help Democrats secure the Senate majority.

“Here’s the way to describe the beginning of this Congress: Covid, Covid, Covid,” said David Castagnetti of Mehlman Castagnetti Rosen & Thomas. “It falls both in the health category and the grow-the-economy category.”

‘Power Brokers’
Biden and Democratic leaders must navigate their ambitious legislative projects with razor-thin majorities as tensions between progressives and moderates in the party are potentially amplified.

Lisa Kountoupes of KDCR Partners said “there seems to be some sort of tacit desire to support staying together” to get things done.

“But it is going to be pretty complicated,” she added.

The uncertainty created by the need to compromise is a boon for K Street, which is tasked with either shielding clients from risk or inserting their priorities. Members of both parties have political reason to meet in the middle.

In the Senate, “moderates on both sides of the aisle really claim a significant amount of the power and will be the power brokers, in terms of what is within the realm of the possible,” said Karishma Shah Page, who co-leads the policy practice at K&L Gates.

Twenty Senate Republicans are up for re-election in 2022, some in “increasingly purple states,” Page said. “There are going to be issues in some of these states, which do resonate with a more moderate approach. And that may create some inclinations to really do coalition-building with Democrats.”

On the other side, Forbes said Democrats learned in the 2020 election that, when it came to a Covid-19 relief package, agreeing to “a small bill would have been better” than holding for a much larger one. “We would have a larger margin in the House if we had decided that in September,” he said.

The Democratic House majority is currently 222-211 after losing a net 10 seats in November. There are two vacancies.

Ivan Zapien, a partner at Hogan Lovells and former top aide to Sen. Bob Menendez (D-N.J.), said members are going to be “more likely to meet each other where they are politically,” motivated to come together after the chaotic start to the year.

Reconciliation and Regulatory Review
While their margins are slim, Democrats holding both chambers makes it easier to confirm Biden’s political appointees. They’ll also have legislative tools at their disposal, including if compromise with Republicans proves futile.

That includes the Congressional Review Act, which allows lawmakers to roll back recently issued regulations. Lobbyists expect that many of the Trump administration’s environmental rules will face the chopping block.

And they can pass some bills with the budget reconciliation process, through which only a simple majority is needed in the Senate rather than the 60-vote threshold to overcome a filibuster. It can only be used if the bill affects spending, revenues, or the federal debt limit.

Democrats are considering using reconciliation for additional coronavirus relief, health care, infrastructure investments and tax policy. The fiscal tool, depending on how aggressively it’s used, faces resistance from moderates, such as Sen. Joe Manchin (D-W.Va.), who will be a key swing vote.

For lobbyists, that means significant opportunities to have a say in major legislation with a chance to become law. Reconciliation was used to pass the Affordable Care Act in 2010 and the GOP tax cuts in 2017 (Public Law 115-97), two pieces of legislation that spurred massive lobbying sprees.

“I don’t want to say that the sky’s the limit, but it opens up a lot of possibilities,” said Izzy Klein, a former aide to Senate Democratic Leader Chuck Schumer (D-N.Y.).

To contact the reporter on this story: Megan R. Wilson in Washington at [email protected]

Lobbyists Anticipating Compromise From Narrowly Divided Congress