Lobbying Group Vows to Set Aside Priorities to Back Bush Wartime Plans

A number of K Street giants have agreed to set aside individual legislative wish lists and rally around President Bush and what he determines the fall agenda should be.

“Our agenda is whatever the President believes is necessary for the country, and we will be supportive of that,” said Dan Danner, senior vice president of public affairs for the National Federation of Independent Businesses. “This is not the time for individual groups to be concerned about their own specific tax item or specific agenda.”

At a meeting Tuesday afternoon, leaders of several major business groups pledged not to push a variety of tax-cut initiatives, including a capital gains reduction, unless the White House and Congress agree to pursue them.

“The American people have been absolutely stellar and outstanding, and the business community needs to and wants to and will behave in the same fashion,” said Dirk Van Dongen, president of the American Association of Wholesale-Distributors.

The consensus in the business community came a day before Federal Reserve Chairman Alan Greenspan, top White House economic adviser Larry Lindsey and former Clinton Treasury Secretary Robert Rubin met with Congressional leaders to discuss possible components of a bipartisan economic stimulus package the House and Senate plan to take up next week.

While Republicans would like to see the capital gains tax reduced from 20 to 15 percent, Democrats are arguing for a reduction in payroll taxes for the 35 million Americans who did not receive rebate checks this year.

“This is going to be negotiated at a very high level, and you’re going to have to swallow a little,” said Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce. “In the end everybody will get their piece.”

The group, known as the Tax Relief Coalition, consists of Danner, Van Dongen, Josten, Mike Baroody of the National Association of Manufacturers, David French of Food Distributors International, and Paul Beckner of Citizens for a Sound

Economy.

Another prominent member, Grover Norquist of the conservative Americans for Tax Reform, said he is not completely in agreement with the group’s decision to refrain from pursuing its own priorities, noting that a formal vote on the issue wasn’t taken.

Norquist said he would continue to discuss and promote a capital gains tax cut but would understand if the GOP Congressional leadership and the President decide that they don’t have the votes to support a reduction in this tax.

However, he said he would not refrain from blaming Democrats if the idea of slashing the capital gains tax is shelved.

“It depends on what the Democrats are doing and why,” he said. “If [Senate Majority Leader] Thomas Daschle [S.D.] is exploiting this tragedy to raise spending and interfere with tax reduction, I’m not going to pretend that he’s motivated by patriotism.”

Still, Josten said most of the members of the group are completely committed to the idea of supporting a bipartisan approach to any plan to buttress the economy. Instead of directly lobbying for specific tax cuts to benefit the business community, Josten said the chamber’s staff is now in response mode – spending most of its time taking calls for suggestions and analysis from the administration and Congress, instead of placing them.

The K Street group’s consensus comes in the midst of a furious lobbying campaign by the airlines industry to obtain billions of dollars in direct aid, loans and loan guarantees from Congress as early as the end of this week.

Just days after planes slammed into the World Trade Center and the Pentagon, the airline industry launched a desperate lobbying campaign, with top corporate officials showing up on Capitol Hill and flooding House and Senate leaders with phone calls in which they pleaded with lawmakers to help them avoid the prospect of laying thousands of employees off and, in some cases, declaring bankruptcy.

The campaign has only intensified since the attacks, with some top lawmakers, including Minority Leader Richard Gephardt (D-Mo.), receiving phone calls from top airline executives and lobbyists at their homes this past weekend.

Even though the airlines were severely hit by this week’s stock market plunge, in the past two days the industry has lowered its demands for aid after the White House and Congressional leaders told officials that the bailout requests were too high and already prompting complaints by smaller carriers and other industries.

As Congress began returning from its Rosh Hashanah holiday yesterday, House GOP leaders planned to bring up a $15 billion aid package Friday. According to Chief Deputy Whip Roy Blunt (R-Mo.), who is spearheading the effort for House Republicans, the industry would also like to see $7.8 billion in tax credits, but has put that request aside for now to seek funds needed for immediate relief.

“It’s clear from the discussion that we had [Tuesday] … that Congress and the administration are going to insist that any relief the airlines get doesn’t put them in a better position than where they were before September 11th,” Blunt assured.

Meanwhile, House leadership aides report receiving numerous calls from the insurance sector, widely regarded as one of the industries affected most by the attacks.

But Julie Rochman, senior vice president of public affairs for the American Insurance Association, insisted that for now the industry has no plans to ask the Hill or the administration for any type of aid.

“There’s a big difference between us and the airlines industry,” Rochman said. “We weren’t imperiled economically before the attacks.”

Even so, the airline industry’s quick push for tens of billions of dollars in compensation has already earned it a swift rebuke from some of its K Street neighbors.

“Certainly just from the numbers – $24 billion that have been in print – there’s a sense that the number is extraordinarily high,” Danner said. “There is some sense that that’s a stretch. There’s some sentiment that a national crisis shouldn’t have been used to solve all of the airlines problems.”

Another top business lobbyist put it more bluntly: “There is a pretty broad and strong belief downtown that the airlines industry is being totally opportunistic … and if the political system buys into that, everyone will know that there’s a trough, and a feeding frenzy will start,” he said. “They are just reaching too far. They had a two-bedroom house and the damn thing burned down, and now they want a four-bedroom house.”

The lobbyist added, “We should all go out to LaFayette Park and burn our frequent-flier cards.”