K Street scrambles after Manchin’s latest stunner

From: POLITICO Influence - Thursday Jul 28,2022 10:11 pm
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By Caitlin Oprysko

With Daniel Lippman

K STREET SCRAMBLES AFTER MANCHIN DEAL: Sen. Joe Manchin ’s announcement on Wednesday that he’d struck a deal with Senate Majority Leader Chuck Schumer to broaden Democrats’ reconciliation proposal caught K Street off guard along with the rest of Washington, sending lobbyists and their clients scrambling to digest the bill’s new historic climate investments and tax code changes in time to make changes before the legislation hits the Senate floor as soon as next week.

— But while winning tweaks to the plan won’t be impossible, multiple lobbyists told PI that groups looking to have problematic language stripped completely are facing an uphill battle against the clock and a Democratic caucus eager for a massive win before the midterms.

— “It's kind of the brilliance of the way they've just done that, is that they announced it with one week left to go,” Ferox Strategies Cristina Antelo said in an interview. “There's not enough time for the other side to go mobile.” As an example, she pointed to changes to carried interest, a tax break protected fiercely by the private equity and hedge fund industries (and which Sen. Kyrsten Sinema (D-Ariz.), the chamber’s other key vote, opposed last year).

— “Are they going to be able to mount an attack in five days that will really stymie this thing?” Antelo said. “I don't know.” She added the fact that Democrats have been clamoring for a more fulsome climate package, compounded by the lack of time for major edits, gives lawmakers “a pretty compelling” rebuttal when they are lobbied by interests like private equity.

Holland & Knight’s Rich Gold told PI that the bulk of changes to the bill at this point will likely stem from fixes required to comply with procedural rules or that are flagged as mistakes given the swiftness and opaqueness with which the bill was crafted. “Obviously, Manchin’s already endorsed the bill,” he told PI. “So if you're K Street … if you vehemently oppose something, where do you go to? I think I just don't know that there are any doors left open.”

— Regardless, lobbyists have their work cut out for them at this point. “We’ll all be working around the clock pretty much for the next five days,” Gold said, adding that his firm is aiming to put together a brief for its clients that will range from 80 to 100 pages long. When PI reached out to Tiber Creek Group’s Jeff Shapiro this morning, he responded that the firm had been locked in briefings since 7:30 a.m. amid a rush of queries from clients.

— “There's certainly a lot of conversations about strategies to effect any changes that can be made between now on the Senate floor vote,” said Chris Treanor, an energy and sustainability lobbyist at Akin Gump Strauss Hauer & Feld, noting that he, like the rest of Washington, awaits cues from Sinema to see where any pressure points might arise. He added that on the climate side, stakeholders are working to digest the plan’s electric vehicle tax credits.

— “The criteria to qualify for the tax credits changed pretty dramatically” since Democrats’ last proposal, “so I think that's something that folks will be digesting and trying to figure out how it affects their companies and industries,” he said.

— In addition to Sinema’s sign-off, K Street is watching whether progressives are willing to take some fossil fuel provisions in the bill in exchange for the new climate measures, or whether Democrats like Rep. Josh Gottheimer (D-N.J.) will object to the lack of SALT relief.

Al Mottur, a Democratic lobbyist at Brownstein Hyatt Farber Schreck, said that he knows senators caught off guard and wary about voting for the bill’s tax changes ahead of their reelection, even if they will ultimately vote yes.

— The bill’s 15 percent corporate minimum tax “is probably the most problematic” provision among those lawmakers, he said. Whereas drugmakers might be coming around to the fact that the industry-reviled drug pricing provisions will pass, (read on for more on that!), on the so-called book tax “many rational business leaders think it's horrible, so I think you could see a change there.”

— Still, compared with the tax hikes Democrats were weighing last year, “the tax increases here are pretty modest,” said Gold.

Good afternoon and welcome to PI. Send tips and reconciliation bill flags: coprysko@politico.com . And be sure to follow me on Twitter: @caitlinoprysko .

 

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BUSINESS GROUPS HAMMER RECONCILIATION DEAL: Business groups targeted by the reconciliation bill’s revenue raisers came out firing at Democrats today, but not all of the business community reacted with hostility.

— “This proposal is nothing more than a repackaging of the same bad ideas with a new name slapped on it,” National Association of Manufacturers CEO Jay Timmons said in a statement Wednesday night. Timmons, whose trade group started running a six-figure ad campaign blasting the reconciliation bill’s initial cornerstone of drug pricing reforms, called those policies “no less destructive.”

— He also took aim at permitting reforms that Democratic leaders promised Manchin they would pass alongside the reconciliation package, urging “any member of Congress who is voting for the bill based solely on that language” to “instead push to have a standalone bill considered. Lawmakers who support manufacturing in America should oppose this reconciliation bill. It will make manufacturing less competitive and America economically weaker.”

— The American Investment Council , which represents the private equity industry, returned to an argument that appeared to help keep its pet issue out of Democrats’ line of fire during the previous reconciliation process, when it lobbied hard against changes to the lower tax rate on a form of compensation called carried interest.

— “Over 74% of private equity investment went to small businesses last year,” the council’s president and CEO Drew Maloney said in a statement. “As our economy faces serious headwinds, Washington should not move forward with a new tax on the private capital that is helping local employers survive and grow.”

— Meanwhile Neil Bradley, the U.S. Chamber of Commerce 's top lobbyist, said in a statement this morning that the reconciliation bill’s tax provisions “would discourage investment and undermine economic growth,” and described the drug pricing reforms as “price controls that would limit American innovation. Both will make our economic problems worse.”

— But one business constituency threw its support behind Democrats’ tax measures. The Retail Industry Leaders Association, which represents retail giants like Target, CVS Health, Home Depot and Walgreens, applauded Manchin and Schumer for reaching a deal that they argue improves corporate tax equity.

— “Retailers were critical of earlier efforts by the Biden administration to raise the corporate rate to 25 percent or more, but supportive of efforts to enact a minimum tax and more efficiently collect taxes that were legally owed but uncollected,” Michael Hanson , the group’s senior executive vice president for public affairs, said in a statement, arguing that retailers “historically paid an effective tax rate more than 10 percentage points higher than the average U.S. industry.”

— "The agreement struck by Senator Manchin with Leader Schumer accomplishes all of the objectives retailers have set out to achieve throughout the debate on corporate taxes: permanent lower rates, fairness to ensure all are contributing, and better enforcement to collect what is legally owed,” he added.

PHARMA’S ‘HAIL MARY’: “Drugmakers are waking up to the reality that Democrats’ revived budget reconciliation bill has a shot at enactment, and are waging an intense lobbying campaign on Capitol Hill and over the airwaves in a last-minute attempt to bring it down,” POLITICO’s Megan Wilson reports.

— “The bill would allow Medicare for the first time to negotiate prices of some of the most costly drugs used by American seniors, threatening billions in revenue, and punish drug companies if they raise prices faster than the rate of inflation. For the pharmaceutical players impacted most by the bill, it’s the equivalent of a five alarm fire.”

— “‘The ground is shifting. It’s starting to sink in for them, what the bill does,’ one industry lobbyist told POLITICO about the sentiment among pharmaceutical executives at a recent gathering. ‘The CEOs who have significant concerns are very engaged.’”

— “That gathering, an annual planning meeting for the industry’s most prominent trade group, took place at the Conrad Washington hotel last week — hosting leaders of some of the largest drugmakers in the country.”

— This week, executives from the Biotechnology Innovation Organization’s members are flying in, and while “the group will continue to urge lawmakers to vote against the bill as long as Medicare negotiation is included … part of BIO’s advocacy strategy includes also pushing for policies to blunt the damage.”

ATLANTIC COUNCIL CUTS TIES WITH KOCH INITIATIVE: “The Atlantic Council is parting ways with a Charles Koch-funded foreign policy strategy initiative after staff at the Washington think tank raised concerns about the arrangement and the initiative’s position on U.S. policy toward Russia,” our Hailey Fuchs and Betsy Woodruff Swan report.

— “Koch, who is a major funder of conservative, libertarian and philanthropic initiatives, provided the Council with a $4.5 million grant in 2020. The money was designed to set up the New American Engagement Initiative, a national security effort that planned to use the funds to support scholars and their efforts, which was housed under the Council’s Scowcroft Center for Security and Strategy.”

— “In March 2021, the initiative co-director, Mathew Burrows, and Emma Ashford, a senior fellow with the effort, penned an article that argued the U.S. should not center its approach to Russia around human rights. Nearly two dozen Atlantic Council staffers, including several former ambassadors, responded in a letter disassociating themselves with the article. At the time, some Atlantic Council experts suggested to POLITICO that Ashford and initiative co-director Chris Preble — two alumni of the Koch-funded Cato Institute — were brought on because of Koch money.”

— “In an email sent Wednesday morning to its board of directors and obtained by POLITICO, Atlantic Council President Frederick Kempe announced that the New American Engagement Initiative would soon be housed under the Stimson Center, a significantly smaller foreign policy oriented D.C. think tank. He excluded any mention of the original funder of the initiative.”

SPOTTED at a reception in honor of the House Chiefs of Staff Association at the Oracle townhouse hosted by the National Beer Wholesalers Association: Bradley Bottoms with Rep. John Garamendi (D-Calif.), Jimmy Peacock with Rep. Ashley Hinson (R-Iowa), Desiree Koetzle with Rep. Pete Stauber (R-Minn.), Patrick Mocete with Rep. Young Kim (R-Calif.), Rachel Harris with Rep. Debbie Lesko (R-Ariz.) and Joe Lillis with Rep. Billy Long (R-Mo.).

 

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Jobs Report

Keris Jän Myrick has been named vice president of partnerships at the mental health nonprofit Inseparable. Myrick previously served as co-director of the Mental Health Strategic Impact Initiative and currently sits on the board of Mental Health America.

Ed Moreland has joined Rockwell Automation as vice president for government affairs and external communications. He was most recently vice president for global government affairs at Harley-Davidson.

Gregory Conley is joining the American Vapor Manufacturers Association as director of legislative and external affairs. He’s led the 501(c)(4) group the American Vaping Association since 2014.

Celia Glassman is joining Ernst & Young as assistant director of legislative and regulatory policy. She most recently was director of government relations at the Small Business Investor Alliance and is a Marco Rubio and Jim Risch alum.

TJ Kelly has joined BCW North America as president of the Western Region. Kelly spent the past 13 years with Edelman, serving most recently as executive vice president for the digital, technology and financial services sectors.

New Joint Fundraisers

Amanda Adkins Victory Committee (Amanda Adkins for Congress, Kansas Republican Party, NRCC)
Arizona Senate Victory 2022 (Sen. Mark Kelly, DSCC)
Caraveo Victory Fund (Caraveo for Congress, Federal: Colorado Democratic Party)
Charles Booker Victory Fund (Booker for Kentucky, Kentucky State Democratic Central Executive Committee)
Pat Ryan Victory Fund (Pat Ryan for Congress, New York State Democratic Committee)
Team Mayra (Rep. Mayra Flores, El Sueno Americano, NRCC, Republican Party Of Texas)

New PACs

ADVANCE OREGON (Leadership PAC: Mike Erickson)
The American Comeback PAC (Super PAC)
Drum Major PAC (Super PAC)
Facts Don't Lie (PAC)
The Foundation PAC (Super PAC)
Fung Yeah (Leadership PAC: Allan Fung)
People for Good Sense (Super PAC)
People's Pharma Movement (Hybrid PAC)

New Lobbying Registrations

38 North Solutions, LLC: Redwood Materials
American Capitol Group: Intercept Pharmaceuticals
Buchanan Ingersoll & Rooney Pc: Metacel Pharmaceuticals, LLC
Buchanan Ingersoll & Rooney Pc: Syngap1 Foundation
Buchanan Ingersoll & Rooney Pc: Vivant Behavioral Healthcare
Cassidy & Associates, Inc.: Natureserve
Cura Strategies: The Mended Hearts, Inc.
Dentons Global Advisors Government Relations LLC: Kcp Holdings Limited
Dentons Global Advisors Government Relations LLC: Pony.Ai
Dla Piper LLP (US): Resmed Corp.
Grayrobinson Pa: National Stone, Sand & Gravel Association
Hollier & Associates: Gold Standard Publishing LLC On Behalf Of Photronics, Inc
Innovative Federal Strategies, LLC: Esp Advisors (On Behalf Of Ocean Power Technologies)
Leroy Jones, Jr.: Kbk Consulting Group Obo National Collegiate Athletic Association (Ncaa)
Polaris Capitol Strategies LLC: Franklin Resources, Inc.
Steel Perlot: Steel Perlot
The Duberstein Group Inc.: Exact Sciences

New Lobbying Terminations

Actum I, LLC: Clorox Services Company
The Spectrum Group: John Hancock Real Estate

 

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