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Early Wins Embolden Lobbyists for Business

BY Dan Morgan and Kathleen Day
by Dan Morgan and Kathleen Day on 3/11/01.

Buoyed by their headiest week in recent memory, business lobbyists are dusting off dozens of long-stalled legislative proposals in hopes of cashing in on a new pro-business climate fostered by Republican control of the White House.

Congress last week quickly did away with workplace safety rules that had been 10 years in the making, and moved on to a bankruptcy reform bill. But even as they savored these triumphs, business representatives looked ahead to passing a broader agenda that would pare back environmental and land use regulations, limit corporate liability for faulty products, rewrite rules protecting the privacy of patients' medical records, cut red tape blocking new oil refineries and pipelines, and open the Arctic National Wildlife Refuge in Alaska to oil drilling.

The emboldened mood suggested a deepening awareness among business groups that President Bill Clinton's departure had removed a logjam for pro-business legislation that had piled up in Congress since the GOP won the majority in 1995. While Clinton supported business on issues of trade and investment, he blocked dozens of initiatives, ranging from environmental riders and tax revisions for multinational companies to product liability reform and an overhaul of bankruptcy law.

It was plain last week that the arrival in the White House of President Bush, a former businessman surrounded by senior administration officials who themselves have been business executives, had opened up new possibilities.

Adding to the momentum is the desire of Bush and the Republican-led Congress to quickly reward corporate groups for agreeing to forgo advocating tax breaks in the president's initial tax cut bill -- while reserving the right to press for special-interest tax provisions later on.

"Since business isn't getting anything in the first tax bill, they're going to get a lot on the regulatory side," said Lawrence A. Kudlow, a Wall Street economist and former adviser to President Ronald Reagan.

That view was reiterated by many corporate lobbyists. "Whereas for the past eight years the wind has been in our face for things of priority to the business community, it has now shifted to our backs," said Dirk Van Dongen, president of the National Association of Wholesaler-Distributors.

Business made a substantial investment in the Republican Party in the recent election. Corporations and executives contributed $ 146 million in "soft money" to national Republican Party committees in 1999-2000, compared with $ 81 million to Democratic groups. Two in three dollars from political action committees affiliated with companies went to Republican candidates.

The money helped Republicans keep control of Congress, but the coup was the election of Bush, which eliminated the veto threat from a Democratic White House.

Last week, Congress took a first, big step toward undoing the Clinton record when it scuttled a stringent Clinton administration regulation requiring business to take steps to limit repetitive-stress injuries on the job. Bush has said he will sign the repeal into law.

Congress is also moving rapidly to revive the bankruptcy reform bill Clinton vetoed in December. The House passed a similar bill 306 to 108 on March 1. The Senate could give its approval this week.

Last fall, congressional GOP leaders took control of the final writing of the bankruptcy bill and consulted closely with representatives of the American Financial Services Association and the Coalition for Responsible Bankruptcy, which represent dozens of corporations and trade groups. Another key lobbyist was Jim Smith of MBNA Corp., the nation's largest credit card issuer.

MBNA and its employees were among the largest donors to the Bush campaign. The company's president, Charles Cawley, raised money for Bush and was among the GOP "Pioneers" who contributed at least $ 100,000 to the Republican bid for the White House.

Although Republicans clearly are the driving force, many congressional Democrats are also on board the business bandwagon, reflecting both the party's dependence on corporate money and a more centrist ideological shift.

Half a dozen Democrats provided the margin of victory for repeal of the Clinton workplace rules in the Senate last week, and Democratic Party organizations received donations from some of the leading groups opposing the rules, Sen. Russell Feingold (D-Wis.) noted in a floor speech last week.

Among Senate Democrats who may vote for the bankruptcy bill are Minority Leader Thomas A. Daschle (D-S.D.), whose state is home to a Citigroup Inc. credit card operation in Sioux Falls that employs several thousand people. Daschle has received $ 45,000 in political contributions from Citigroup in the last six years, according to the Center for Responsive Politics.

The bankruptcy bill, which makes it harder for individuals to use bankruptcy to wipe out debt, is a vivid example of the connection between business contributions and legislation, according to consumer representatives. They say the changes are too harsh and would create hardships for people who have fallen into financial trouble, divorce, illness, job loss or other bad luck.

Democratic senators have won several concessions, and they plan to offer a lengthy list of amendments in next week's floor debate, including truth-in-lending provisions. But they face opposition from a lobbying powerhouse of credit card companies, banks, auto companies and retail chains.

"Creditors have written large parts of the bill, paid for questionable research to support their claims, hired some of the best lobbyists in town and liberally stuffed the campaign coffers of key members of both parties," said Travis Plunkett of the Consumer Federation of America. The 442-page bill contains hundreds of provisions written or backed by lobbyists for MBNA, Citigroup and other financial industry giants, but only a few pushed by consumer groups.

Critics of the bill say they feel out-monied, out-manned and out-maneuvered. "This is the best bill money can buy," said Frank Torres, a lobbyist for Consumers Union, publisher of Consumer Reports magazine.

Once the president's tax package and budget have moved through the legislative process, business groups have a long list of initiatives to pursue.

Kevin Hassett, resident fellow at the American Enterprise Institute, predicted a "red tape bonfire in the next couple of years" and said the effects could be far-reaching. "There's definitely a big sea change," he said.

Some big GOP contributors in the tobacco industry have their sights set on scuttling a Clinton administration federal lawsuit charging the industry with "racketeering" and lying about the health risks of smoking. GOP leaders in Congress tried last fall to block the funding the Justice Department needed to pursue the suit, but they backed off after Clinton threatened to veto the appropriations bills containing the proposal.

High on business's agenda are reforms aimed at reducing companies' exposure to lawsuits and liability judgments won by trial lawyers, an important funding source for the Democratic Party. "The goal is to defund the trial lawyers," said one business representative.

For that effort, business can draw on coalitions that have been fighting for tort reform and product liability reform in state capitals and Washington. These include the Institute for Legal Reform, a U.S. Chamber of Commerce offshoot; the Product Liability Alliance; the Civil Justice Reform Group, which represents general counsels of Fortune 100 companies; the American Tort Reform Association; and Citizens for a Sound Economy.

The small business community wants limits on punitive damages, and retailers and wholesalers seek clarifications that would assign liability for defective products to manufacturers rather than sellers.

At the same time, California's power shortage could provide momentum for new energy legislation that, business lobbyists say, could lead to easing some environmental restrictions. In a speech to manufacturers, Vice President Cheney said it is essential to "cut through red tape" that has limited the building of more power-generating capacity. He noted that no new oil refineries have been built in a decade.

The U.S. Chamber of Commerce has made the development of a national energy policy a priority. Bruce Josten, the group's executive vice president, said Congress should review laws such as the 1976 Land Policy Act and the Coastal Zone Management Act, along with clean-air and clean-water legislation.

"Until you do something on land use, environmental impact statements, zoning regulations and the not-in-my-backyard mentality," the country will be handicapped in efforts to produce more electricity, Josten said.