For Now, Lobbyists Own the Day

You know how people say that September 11 changed everything? Well, it certainly changed the way Congress works. Because while nobody was looking, somebody rewrote all the rules.

Just look at the way Capitol Hill is dealing with the economic stimulus bill. Before September 11, legislators had to worry about "scoring." Anyone who wanted to propose a new spending measure or a tax cut had to figure out how to pay for it. No more.

As James Albertine, president of the American League of Lobbyists, said in a recent interview: "Before the events of 9/11, everyone was talking about the budget surplus. They were talking about the fact that we have to pay for any changes in our tax policy. Nobody's talking about that any longer." It's back to the future, says Robert McIntyre, director of Citizens for Tax Justice. "All of a sudden, it's: 'Spend the Social Security trust fund. Borrow, borrow, borrow.' It's like the 1980s all over again."

Here's how the rules were rewritten. President Bush made this statement at a press conference five days before September 11: "I have repeatedly said, 'The only time to use Social Security money is in times of war, times of recession, or times of severe emergency.' " We've got war. We've got recession. And we've got a severe emergency. So the legislative process has turned into "a free-for-all," according to Albertine. "It's become a wonderful opportunity for lobbyists from a variety of interests to get their issues addressed."

Lobbyists are under intense pressure. They know that sooner or later, somebody's going to have to pay the bills. "When Congress wakes up to that reality," Albertine said, "we're no longer going to have the opportunity to consider $100 billion or $200 billion tax bills. This may be the last chance."

Something else changed as a result of September 11. Nobody's paying attention to Congress. That fact may suit the lobbyists just fine. "All of a sudden, the corporate lobbyists sensed an opportunity to persuade the leadership of the House of Representatives," McIntyre said. "What was going to be a $50 billion or $60 billion measure for people who were hurting turned into a $212 billion corporate tax break [over several years]."

This turn of events happened under the radar of press and public attention. That made a big difference, in McIntyre's view. "The corporate lobbyists were hoping it would be invisible, because people would be distracted." It was. The House Republican leadership took President Bush's proposal and turned it into a measure that would inject $100 billion in corporate tax cuts into the economy next year. Among the reductions: more than $7 billion in refunds of minimum taxes paid by corporations since 1986. Treasury Secretary Paul H. O'Neill called it "show business"—a payoff to big contributors.

The bill passed the House by a narrow majority. McIntyre explains: "The moderates on the Republican side were told: 'Don't worry. This isn't really going to happen. This is just a negotiating position.' But the people who pushed it through—[Majority Whip] Tom DeLay and [Majority Leader] Dick Armey—really want it." When they got President Bush to join their bandwagon, show business turned into serious business.

Especially for business. "Cash is king," Albertine said. "Business will argue that a direct infusion of cash is the best way, ultimately, to stimulate the economy." Unemployed workers need the cash more, say Senate Democrats who support a $73 billion stimulus bill. Most of that cash would go to unemployed and low-income workers. This bill failed to pass the Senate, but Democrats there are still holding fast against the House bill. The issue is about as basic as you can get: should government give the money to business to invest and create more jobs? Or should government give the money to consumers to spend, thus providing an incentive for business to create more jobs? Trickle down, or trickle up?

That debate has never gotten on the radarscope. Instead, lobbyists are scrambling for their tax breaks now, before it's too late. Albertine warned: "The budget numbers will come out, and next year is an election year. There will be a lot of other things on the plate. So the fear is, Let's get this thing done right now." What can opponents do? McIntyre is hoping to turn a spotlight on the debate: "It's just a question of getting the public to pay attention for a few minutes here, and I think we will."

The announcement of a recession does put the issue on the radarscope. But Bush is using that attention to pressure Senate Democrats to make a deal with the House. A deal that would preserve most of those corporate tax cuts—not because the tax cuts are popular, but because the President is popular. Senate centrists are proposing a compromise deal that includes $43 billion in tax cuts and $32 billion in spending. Neither side is terribly enthusiastic about the deal. And leading economists say it won't make much difference to the economy. "It would be pretty modest, to be honest with you," R. Glenn Hubbard, chairman of the President's Council of Economic Advisers, told The Washington Post. "Would the economy recover without it? Of course. It's a $10 trillion economy."

Democrats say that no stimulus deal is better than a deal they regard as full of payoffs to powerful corporate interests. But can they afford to block stimulus legislation during a recession? Maybe. Because no one is paying much attention.