At year's end, Main St. has had it tough, but D.C.'s influence industry is still raking it in. Lobbyists on pace for record year

Main Street has had a tough year, losing jobs and seeing little evidence of the economic revival that experts say has already begun.

But K Street is raking it in.


Washington’s influence industry is on track to shatter last year’s record $3.3 billion spent to lobby Congress and the rest of the federal government — and that’s with a down economy and about 1,500 fewer registered lobbyists in town, according to data collected by the Center for Responsive Politics.

Many lobbying firms have escaped the worst of the corporate belt-tightening, thanks, in large part, to the ambitious agenda set out by President Barack Obama — who, ironically, came to Washington with a pledge to break what he considered the undue influence of special-interest lobbyists.

Plenty of sectors have scaled back their K Street spending, including traditional big spenders like real estate and telecommunications. But Obama’s push for legislation on health reform, financial reform and climate change has compensated for the grim economic times.

And that’s after Obama kicked off the year with a massive economic stimulus package — and every major business sector tried to get a piece of the action.

“Lobbyists love it ... when you’ve got an activist agenda like this, and you’ve got serious problems like this, and people want to do something about it,” said James Thurber, director of American University’s Center for Congressional and Presidential Studies.

“It is the most active time that I have ever seen in the advocacy business — from 1973 on,” Thurber added.

“We’ve never had as good a year,” said one lobbyist whose shop deals mostly with financial services and health care issues. “It’s been a tremendously busy year, and it’s going to keep getting that way,” the lobbyist said, noting that both health care and financial reform will remain active as congressional action moves from drafting legislation to implementation to the inevitable fixes.

The year-end lobbying expenditure figures don’t come out until late January, but Thurber and others predict that the top line number will exceed the $3.3 billion spent in 2008. Groups spent $2.5 billion during the first three quarters of 2009, which is a slightly faster quarterly pace than 2008, according to CRP.

And the fourth quarter has been a particularly busy time on Capitol Hill, with the House passing health care and financial reform bills and the Senate digging in on health care, too.

Health care has provided a particular jolt to the lobbying business, insiders say, since the scope of the legislation outstrips any health efforts in recent history.

“This was the biggest, most broad attempt at passing legislation that we’ve seen. This is even bigger or more broad than ’93,” said Bill Pierce, senior vice president and health care guru at APCO Worldwide, referring to President Bill Clinton’s attempt at health care reform. “It touches all the various parts of the entire health care environment. ... Everybody has some dog in the fight.”

And the lobbying expenditure figures don’t include the heaps of cash interest groups are throwing at advertising, coalition-building, grass-roots and Astroturf outreach — all of which don’t get reported in the figures. Advocacy groups have spent almost $200 million on ads on the health care issue so far this year, according to Campaign Media Analysis Group.

The legislation’s reach has drawn in an almost-encyclopedic expanse of interest and corporate groups — from activists on both sides of the abortion debate, to MoveOn.org and FreedomWorks to the U.S. Chamber of Commerce to health insurance companies.

“That doesn’t happen every day. When it does happen, you get this great deal of money being pumped into the political system on the lobbying end because all of these folks feel like they need to be a participant, and that if they don’t participate, they do so at their own peril,” said Dave Levinthal, a spokesman for CRP, a nonpartisan, nonprofit watchdog group. Nearly $400 million has been spent on health care lobbying during the first nine months of 2009, according to CRP’s data.

A closer look at some of the health care lobbying expenditures shows just how high the stakes are. PhRMA, a top trade group for drug makers, spent as much as it did in all of 2008 — $20.2 million — during the first nine months of 2009. America’s Health Insurance Plans is also on pace to outspend its 2008 lobbying budget, spending $6.3 million during the first nine months of this year.

The Obama administration’s determination to revamp the nation’s financial rules and regulatory structure has fueled a somewhat less broad but no less intense advocacy business.

Lobbyists for the industry describe working nonstop since last August, when the financial system started to crumble, through the fight for the $700 billion bailout last fall. This year, they’ve battled several attempts by Democrats to pass so-called cramdown legislation allowing bankruptcy judges to modify troubled mortgages and fought — ultimately unsuccessfully — against strict new credit card rules, among other policy battles.

All this while the industry must keep up with the larger financial reform bill, which is moving through Congress. “If it weren’t for the crisis, that bill could have easily taken four years, minimum,” observed one exhausted financial lobbyist of the bill that the House passed Dec. 11.

The Credit Union National Association has already spent about $650,000 more than it did during the same period last year and is on track to spend “considerably more” lobbying than it did in 2008, said John Magill, the trade association’s senior vice president of legislative affairs.

“It’s been such a frantic pace this year. The Congress has churned out so many things,” he said, ticking off a list that includes financial reform, credit card legislation, new bank overdraft rules and credit unions’ ongoing battle to raise the amount they can lend to small businesses.

Magill said that the lobbying expenditures CUNA reports to Congress don’t take into account its extensive grass-roots efforts, such as the 5,000 members that “hiked the Hill” last spring or the approximately 650 who flew into town the week the House debated the financial reform bill on the floor.

Magill credits that grass-roots lobbying for the defeat of a House bill on a cramdown amendment, which came after the House passed a similar measure earlier in the year.

While times may be good for lobbyists, there’s a more dismal lesson to be learned from the relentless upward trend of lobbying spending that appears undaunted by even a massive recession: Lobbying is seen as an issue of political and economic survival in this town.

“If lobbying the federal government did not work, people wouldn’t spend money doing it,” Levinthal said.