Lobbyists have launched an all-out effort to save tax breaks and protect powerful industries as the Republicans’ tax overhaul lurches toward President Donald Trump’s desk.
Builders and real estate interests are pushing to save the mortgage interest deduction. Businesses are fighting to strip out a last-minute provision inserted into the Senate bill that would preserve the corporate alternative minimum tax. And a coalition of trade groups and local government leaders is urging Republicans not to cut the state and local tax deduction.
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With Trump pressing Congress to send him a bill before Christmas, lobbyists must decide where they want to focus their efforts over the next week.
Some are working the senators and representatives who will make up the conference committee charged with ironing out the differences between the House and Senate bill. Others are working to persuade Republican leaders or leaning on the members of Congress whose constituents may see their taxes go up if changes aren’t made to the bill.
The lobbyists with the most leverage may be those who can argue that the bill won’t pass unless lawmakers address their concerns.
“In order to get the votes they need on final passage, they have to satisfy a lot of members” whose constituents will be hit with tax increases, said Bob Chlopak, a lobbyist for Americans Against Double Taxation, a coalition fighting to preserve the state and local tax deduction.
The coalition launched a series of digital ads on Wednesday warning the constituents of nearly two dozen Republicans who voted for the House bill last month that their taxes will go up unless their representatives change their tune.
“She voted to cut your state and local tax deduction, raising taxes on Californians by $12 billion,” says the narrator of the ad targeting Rep. Mimi Walters (R-Calif.), who represents an Orange County district that Hillary Clinton carried last year. “And while you pay more, corporations and billionaires get huge tax breaks.”
Other lobbyists are homing in the members of Congress who will make up the conference committee.
The American Institute of Architects, which is fighting for changes to the tax rate paid by so-called pass-through businesses, including many architecture firms, has drafted a specific strategy for influencing each conferee. The trade group started reaching out to its members in districts represented by the House conferees shortly after they were named this week and urging them to call their lawmakers.
“We think it will be pretty crucial for them to be hearing from their own constituents on how this will affect them,” said Ian McTiernan, a lobbyist for the American Institute of Architects.
The National Association of Home Builders started meeting with House conferees on Wednesday and plans to start running ads aimed at both House and Senate conferees. The trade group also sent a letter to the House conferees, urging them, among other things, to side with the Senate on the mortgage interest deduction and abandon the House bill’s language, which would cap the deduction at $500,000 and eliminate it for second homes.
But Jerry Howard, the National Association of Home Builders’ chief executive, said the trade group would also be lobbying Republican leaders, lawmakers who sit on the tax-writing committees and rank-and-file members.
“All of the above,” Howard said. “We’re not going omit any possibility.”
The lobbying deluge is reminiscent of what happened the last time Congress overhauled the tax code in 1986, said Jeff Birnbaum, who covered the tax fight 30 years ago for The Wall Street Journal.
The difference is that the conferees spent a month hashing out the differences between the House and Senate tax bills in 1986. Now congressional Republicans are trying to accomplish the same feat in just a couple of weeks.
“It is stuffing just as many issues as there were 30 years ago into a much more restricted time,” said Birnbaum, who now leads the public relations practice at the BGR Group, a Washington lobbying firm.
The rush to pass the Senate bill last week led to one of the biggest issues that businesses are now fighting to kill: the resurrection of the corporate alternative minimum tax.
Senate Republicans’ surprise decision to keep the corporate alternative minimum tax, which provides about $40 billion in revenue over a decade according to an official estimate, caught multiple lobbyists off guard. They set to work against it over the weekend, hours after the Senate early Saturday morning passed the bill that included it, as many of their business clients realized that maintaining the corporate AMT could wipe out the benefits of a cherished tax benefit many of them enjoy — the deduction companies get for research and development costs.
House Republicans aren’t keen on keeping the corporate AMT either, and they’re hearing plenty from lobbyist about it.
“People are screaming bloody murder over that,” one House GOP member said on condition of anonymity to freely chat about the lobbying he’s receiving.
Other potential flash points have gotten less public attention.
The home builders and others are working to ensure the conference committee abandons a House provision that would scrap private activity bonds. The bonds are used by local governments to finance housing projects that are managed by private companies and are considered vital by municipal and infrastructure finance experts.
Steve Benjamin, the Democratic mayor of Columbia, S.C., and vice-president of the U.S. Conference of Mayors, has been working his home state congressional delegation, including GOP Sen. Tim Scott, who’s a member of the Senate Finance Committee; GOP Rep. Joe Wilson; and Rep. Jim Clyburn, the No. 3 Democrat in the House.
“We’re hoping and praying that the Senate version is the way that they go,” Benjamin said.
Both bills also eliminate advance refunding bonds, which state and local governments use to refinance debt aimed at paying for long-term building projects, like roads, bridges, and water systems. Put together experts estimate that the two types of bonds accounted for about half the multibillion-dollar municipal bond market.
The harried effort to influence the conference committee may raise the stock of their former aides who are now on K Street.
Those include Greta Joynes, a former deputy chief of staff to Rep. John Shimkus (R-Ill.) now at Brownstein Hyatt Farber Schreck; Annie Palisi, a former chief of staff to Rep. Diane Black (R-Tenn.) who’s now a lobbyist for Invariant; Lori Harju, a former chief of staff to House Ways and Means Committee Chairman Kevin Brady also at Brownstein Hyatt. (Some of them, including Harju, can’t lobby their former bosses directly because they left the House less than a year ago.)
“Chairman Brady will be guided not only by long-held principles about what makes good tax policy but also by a fierce determination to get this done,” Harju wrote in an email. “He’s not afraid of a smart compromise.”