When President Bush rallied support for his tax-cut package at a gathering of business leaders on Tuesday, it marked the first time that the president has publicly urged his allies in the industry to help him move his plan through Capitol Hill.
“Congress needs to hear from you,” Bush exhorted a boisterous crowd of more than 600 business leaders gathered at the Washington headquarters of the U.S. Chamber of Commerce. “You all can make a difference in this debate.”
Privately, Bush has been delivering that message to businesses for years.
Since taking office two years ago, this president has been far more aggressive and effective than any of his recent predecessors in leveraging the support and resources of K Street to help drive his pro-business agenda through an ideologically divided Congress.
From free trade and tort reform to energy production and terrorism insurance, White House aides have helped organize no less than a dozen coalitions of like-minded businesses to rally support on Capitol Hill.
Though not all of the efforts have succeeded, the tactic shows that this White House keenly understands the benefits of having a united business community behind its agenda — as well as the difficulty of moving legislation when industries divide.
Perhaps no coalition better illustrates the White House tactic than the Tax Relief Coalition, the 6,000-member business alliance that invited Bush to give an address on Tuesday.
The tax-cutting coalition “unifies the major trade associations and businesses in a way that has not happened before,” said Grover Norquist, president of Americans for Tax Reform and a founding member of the coalition. “They are so in line it’s like in-line skating.”
The group was organized two years ago by White House officials and their Republican loyalists on K Street to unite industry in support of Bush’s first tax-cut bill in 2001.
Since then, the coalition has enacted two tax bills and is now working on its third: a controversial plan centered on slashing taxes on corporate dividends and accelerating the reductions in personal income tax rates enacted in the 2001 legislation.
By using the coalition, the White House has accomplished what might have once seemed virtually inconceivable: It has harnessed the entire business community to the singular purpose of advancing the president’s economic agenda on Capitol Hill.
Indeed, Members who join the coalition must sign a pledge that they will support whatever plan the White House puts forward, a clear sign of the White House’s ability to exercise discipline on K Street.
“When the president says he wants apple pie, we want apple pie. When he wants raisin cake, we want raisin cake,” said Jade West, a former GOP Senate staffer who helps run the group from her post at the National Association of Wholesaler-Distributors. “We will support the president. That is a condition of membership.”
As a result, the White House views membership in the coalition as a barometer for a company’s support of the administration, said some lobbyists.
“The White House and Members of Congress see your name on there and know that you are trying to pass the tax-relief package,” said Lee Culpepper, the top lobbyist for the National Restaurant Association. “They know who is working to pass the bill and who is sitting on the sidelines.”
Forcing that many entities behind one position — from multinationals to mom-and-pop shops — is much like the proverbial herding of cats.
Even some of the leading members of the coalition, such as the National Association of Manufacturers and the National Federation of Independent Business, are often at odds when Members get into the real nuts and bolts of legislating.
Not surprisingly, creating a unified front hasn’t been seamless. Some coalition constituents complain bitterly — if privately — about the group’s unswerving adherence to the president’s wishes. Others gripe that the group hasn’t been nearly as effective as it could be.
“Sure, they are for the tax bill, but they are not really pushing hard for it,” carped one dissatisfied member. “They just want to show that they support the president.”
The complaints would all seem to be another way of saying that pressing so many interests to one task is a messy business. But in the first two years of the Bush administration, Corporate America has also come to learn of a messier alternative: There can be a stiff price for defying the White House.
Given its massive size and the breadth of interests, the Tax Relief Coalition is one of the most complex organisms ever to lobby Capitol Hill. Leaders of the group proudly cite its 6,000-odd constituent members, drawn from across the spectrum of business. But there is also a 50-member executive council, steered one level further by a dozen key lobbyists.
Organizers of the group generally insist they don’t need the White House to tell them what is good for business; when business interests are at stake, organization comes naturally.
“It’s not like we’re children who need this stuff dished up to us because we don’t get the joke,” said Dirk Van Dongen, who runs the coalition.
But at the heart of the business community lies an age-old problem for lobbyists: The community is highly diverse, with divergent interests to match. Tax bills, in particular, have been known to crumble beneath the weight of competing interests.
In 2001, the White House wasn’t about to let that happen with one of the central pieces of the president’s agenda — tax cuts.
The administration, led by its political Svengali, Karl Rove, reasoned that someone needed to be anointed so that it would be clear who actually knew what the White House wanted from Capitol Hill and who was just speaking for themselves.
That “laying of the hands” — as it was dubbed by Kirk Blalock, who served as the White House’s liaison to the business community before leaving for K Street late last year — was the key to establishing the Tax Relief Coalition as the leading industry backer of the president’s tax-cut agenda.
“It said: ‘This is the coalition that is supporting the president’s package and we are working with them,’” said Blalock, now a partner at Fierce & Isakowitz. “Under Karl’s direction, we worked with them.”
Added West: “Asking what we would be without the administration is like asking what a peanut butter and jelly sandwich would be without peanut butter — still a sandwich, but not the same kind.”
Having embraced the plan, the White House quickly took a lead role in designing the organization and mapping its activities, according to administration aides and GOP lobbyists.
Perhaps the most significant White House contribution was Rove’s selection of Van Dongen to head up the enterprise. Rove reasoned that Van Dongen, head of the National Association of Wholesaler-Distributors, would avoid the inevitable power struggles that would occur if the group were headed by the nation’s largest business lobby — the U.S. Chamber of Commerce — or the small businesses’ National Federation of Independent Business.
“Dirk was non-threatening,” said one GOP lobbyist.
In more than two decades in Washington, Van Dongen was well-known in Republican circles. Nicholas Calio, the White House’s top lobbyist when the coalition was formed, had worked under Van Dongen at NAWD during the Reagan administration.
“Dirk has a proven track record of being able to manage these coalitions and produce results,” said Jack Howard, a lobbyist who served as Calio’s deputy in the White House.
One Hand Washing the Other
The key players in the coalition are sensitive to appearances of overt coordination between the White House and K Street. They prefer the expression “information sharing” — a more benign description that would not trigger legal questions about the partnership.
But the distinction is a matter of semantics to many on the outside.
Coalition organizer West said she “cheerfully” calls it an “administration coalition” that exists to provide operational support to the White House on Capitol Hill.
Members of the coalition start each day with a conference call that includes senior officials from the White House and the Treasury and Commerce departments.
Rove himself has dropped by two of the regular meetings of coalition members, and one was held in the White House.
Aside from Rove, much of the nurturing of the coalition comes from the White House’s Office of Public Liaison, a relatively obscure White House bureau that Rove oversees.
In the Bush White House, the public liaison office is the principal collector of intelligence. One K Street insider described the operation as a “mechanism to ensure the White House is not isolated” as policy issues develop.
It’s a means to ensure “key decision makers hear what is thought, felt and believed” by the people who are critical supporters of the president’s agenda on Capitol Hill, the source said.
“Properly staffed, and properly understood, the OPL can be an extremely potent mechanism for pushing the president’s agenda,” Van Dongen said.
During his time in the liaison’s office, Blalock stood in for the White House at many coalition meetings.
Now Lezlee Westine, the head of the liaison’s office, sits in on the biweekly sessions, though the White House is close to hiring another aide to the liaison’s office to work with the Tax Relief Coalition.
Detractors say that the Tax Relief Coalition is led by a bunch of lay-about trade associations that have refused to spend the millions of dollars it takes to launch an aggressive and effective push for the plan.
“Other than taking out ads in Roll Call, they haven’t really done a whole lot,” said one dissatisfied coalition member.
As a result, they say, the White House was handed an embarrassing loss when the House and Senate voted to slash the president’s $726 billion package — and gut the administration’s prized dividend tax cut.
The close coordination between the White House and the business lobby also has riled even some Congressional Republicans and lobbyists.
Because the vast coalition is committed to supporting the White House’s tax plan, tremendous pressure is exerted on companies and lawmakers who press their own ideas about the makeup of tax legislation.
“It’s the Bush me too-ism,” complained one Republican lobbyist. “Whatever the Bush White House wants, we’re for it.”
The high-tech community, for example, came under fire a few weeks ago when it began advocating measures that were not included in the White House plan.
“We told the Tax Relief Coalition when we joined that we were going to push for our own things, but we would do nothing to jeopardize the president’s package,” said Ralph Helmann, a lobbyist for the Information Technology Industry Council.
In the end, the high-tech industry prevailed upon both House Ways and Means Chairman Bill Thomas (R-Calif.) and Senate Finance Chairman Chuck Grassley (R-Iowa) to include key high-tech priorities in the tax bills they hope to move through their committees this week.
But the moves by the high-tech industry have been the exception. In the coalition’s two years in existence, few corporations or industries have dared to promote their own agendas.
That is clear evidence, coalition leaders say, that Bush and the organizers of the Tax Relief Coalition have achieved their goal of mobilizing the broad range of businesses interests to present a united front on Capitol Hill in favor of the president’s tax plan.
At Tuesday’s rally, Bush praised the business community for helping him move his tax plan on Capitol Hill and urged it to press Members of Congress for action.
“I’m going to continue to work both with the House and the Senate,” Bush told the boisterous crowd before they boarded buses headed for Capitol Hill. “But the more the Members of Congress hear from you, the more likely it is that this plan is going to pass.”