"You're either with us or you're against us." The Bush administration has delivered that message to the Europeans, the United Nations and -- even more successfully -- to the K Street community, where the issue is not war and peace but tax cuts, specifically dividend tax cuts. House Ways and Means Chairman Thomas is ready to introduce President Bush's economic growth bill this week, and industry groups are lining up like small, Eastern European countries to pledge their support to the president.
"The wind is turning to the back of the dividend proposal, from having a very strong wind in its face," said Dirk Van Dongen, president of the National Association of Wholesaler-Distributors and a leader of the Tax Relief Coalition. "The administration has made it abundantly clear that this is the cornerstone of the package -- it's not designed to deflect blows from other parts of the package."
There is no shortage of talk about the "add-ons" that various trade associations would like the Ways and Means Committee to attach to the bill later this month, including accelerated depreciation proposals tailored to a variety of industries. But discussion -- at least open discussion -- of chipping away at the $388 billion set aside for dividend relief to fund other tax cuts has "ebbed," in the words of GOP lobbyist Ed Gillespie.
"Remember," said Ken Kies of the Federal Policy Group, "the 2001 [tax-cut] bill as enacted was pretty much the president's proposal. Politically, he's in a stronger position than he was two year ago -- I don't expect the administration to show much flexibility in terms of what they see as the right way to do this."
Business groups are anxious to demonstrate what they have been doing to push the Bush plan forward. The TRC this week is circulating a memo to its thousand-plus member companies and trade groups highlighting recent grassroots and media efforts by Citizens for a Sound Economy, the Business Roundtable, the Securities Industry Association, the U.S. Chamber of Commerce, the Edison Electric Institute, the American Forest and Paper Association and the Seniors Coalition.
The TRC recently formed a Committee on Dividend Benefits, headed by BRT president John Castellani and CSE president Paul Beckner, which meets every Thursday, includes over 40 members and has its own Web site (www.trcdividendbenefits.org). The TRC is beginning a run of print ads trumpeting the dividend plan this week, and the BRT will begin its own ad run next week, according to Castellani. "From the BRT standpoint, any economic growth package should restore consumer confidence and restore investor confidence," Castellani told CongressDaily. "From our members' perspective, [the Bush approach] is the best way to do it."
Beckner said CSE contacted 40 House members and about 18 senators over the Presidents' Day recess in support of the proposal. "A fairly broad cross section of the business community is working to make dividends a viable part of the package," he said.
Separately, Gillespie has put together what he calls a coalition of the "dividend faithful" -- about 30 companies that already pay out dividends and are "true believers" in the plan. "We're working in tandem with the TRC, on a parallel track," Gillespie said. "We're working on lobbying strategy, grassroots and sharing targets."
Meanwhile, the loyal opposition has its doubts about the sincerity of some of the president's allies.
"I think they're being good soldiers," said Roger Hickey of the liberal Campaign for America's Future (www.ourfuture.org), which is helping to organize grassroots opposition to the president's proposal. "The business community is falling in line and lobbying for their president, but there doesn't seem to be a lot of energy there. I question how much in resources they'll put into it."
Hickey's group -- a charter member of the Fair Taxes Coalition, which includes several hundred public interest groups and labor unions -- is churning out e-mails to activists throughout the country, as well as holding events in state capitals to dramatize the state-by-state impacts of the Bush plan.
For instance, Sen. Mark Dayton, D-Minn., joined the community group ACORN in Minneapolis recently to release a report claiming the proposal would worsen Minnesota's budget crisis by $110 million and cost the state jobs over the next decade.
The Fair Taxes Coalition is targeting the usual list of Senate moderates, "grabbing senators in their state while also fighting here in Washington," Hickey said. Right now, it is a shoestring operation, but Hickey said the opposition will make itself heard in the coming months with the help of the unions and some wealthy benefactors. "This is a coalition that doesn't have a lot of money, but when things heat up, money does tend to become available," he noted.