Groups that invest heavily in advocacy often get their money’s worth
In Washington, representing big business is a huge business in and of itself.
Last year, the top 10 spenders on federal lobbying paid out $326.6 million to influence lawmakers on Capitol Hill, according to an analysis by Roll Call. That total represented an increase of 17% from 2021, which is no surprise given that 2022 was a midterm election year.
The National Association of Realtors spent $81.5 million on lobbying in 2022, almost twice as much as in 2021, to wrest the top spot from the U.S. Chamber of Commerce, which spent $79.4 million.
Rounding out the top 10 were business interests representing some of the country’s biggest industries: PhRMA ($28.3 million), the American Hospital Association ($22.1 million), American Medical Association ($20.5 million), Business Roundtable ($20.4 million), American Chemistry Council ($19.8 million), Amazon ($19.7 million), Meta Platforms ($19.2 million), and AARP ($15.9 million).
Washington-based lobbyist Andrew Schwab, who has extensive experience in health care, said it’s no wonder health-care organizations consistently rank among the top spenders. Total health-care expenditures grew 2.7% to $4.3 trillion in 2021 and accounted for 18.3% of U.S. gross domestic product, according to the Centers for Medicare & Medicaid Services.
DEEP IMPACT
With so much money at stake every year, even relatively small policy changes can have a major impact on entire industries over time. As the nation’s largest healthcare payer, the federal government is a “vital customer” for most companies involved in providing health care, so it’s “critical that those businesses share their views about how policy is developed and implemented,” Schwab said.
“If you’re an industry facing any form of government regulation, advocating your views to policymakers and regulators is critical,” said Schwab, who recently launched a Washington consulting firm. Prior to that, he established the government-affairs office at Oak Street Health, a publicly traded network of primary-care health centers that was recently purchased by CVS Health.
Schwab said that while small-business owners like hoteliers might find it daunting to advocate for policy issues, it’s “quintessentially American” to petition the government for a redress of grievances, as stated in the First Amendment. Besides, elected officials and regulators want to hear from the people who employ their constituents and drive local economies, Schwab said.
“Most public servants welcome the opportunity to learn about the intricate services, business operations, and community benefits various sectors provide so they can make the most-informed decisions possible when determining policy,” Schwab said. “It’s incumbent upon those who operate those businesses to share their views with policymakers.”
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NOTCHING VICTORIES
The AARP serves as a prime example of what an association with an engaged membership can achieve. Back in 2005, the advocacy group for Americans ages 50 and older spent a whopping $36.3 million on lobbying. Why so much in a year without federal elections?
That was the year President George W. Bush outlined a plan to privatize Social Security, and preserving safety-net programs like Social Security and Medicare are the AARP’s top priority. With more than 38 million members, the association is the largest nonprofit group in the country and, as such, has played a major role in some memorable political brawls.
Just last summer, the AARP celebrated a win when President Joe Biden signed the Inflation Reduction Act, empowering Medicare to negotiate prices for certain drugs, capping out-of-pocket costs for Medicare Part D beneficiaries, and imposing tax penalties on drugmakers that increase prices beyond the rate of inflation.
The battle over negotiated drug prices illustrates how opposing sides of a policy discussion can spend millions of dollars on lobbying and end up with a draw or a split decision. The AARP and other patients’ groups wanted Medicare to be able to negotiate prices on all drugs, beginning right away, while PhMRA, which represents branded drugmakers, wanted to prevent the government from negotiating prices at all.
In the end, lawmakers reached a compromise, and lobbyists on both sides got paid. The Inflation Reduction Act allows Medicare to negotiate prices for 10 drugs beginning in 2026 and up to 140 by 2033.
Would either the AARP or PhMRA have been better off not spending so much on lobbying, given that they each got half a loaf? It’s hard to say, but in the high-stakes world of federal lobbying, unilateral disarmament represents an unacceptable risk.
In time, groups such as the AARP have chalked up many victories. The association pushed for President Bush’s 2003 bill creating Medicare Part D, which added prescription-drug coverage to Medicare, and worked with President Barack Obama to close gaps in Part D coverage.
The AARP also supported passage of the Affordable Care Act and the Family Medical Leave Act, the rollout of the National Do Not Call Registry, authorization of over-the-counter hearing aids, extending Medicare coverage to telemedicine, protecting cost-of-living adjustments to Social Security benefits and extending workplace retirement-savings programs to part-time employees.
PART OF THE PROCESS
Even the most-skilled lobbyists sometimes fail to deliver for their clients, however, so Schwab said it’s important for AAHOA Members to stay engaged with lawmakers. He said hoteliers should remember an old adage that remains popular on Capitol Hill: If you’re not at the table, you’re on the menu.
“When a critical mass of organized interest groups comes together – whether everyday Americans or industry leaders led by their trade associations and in-house advocacy leads – it really can make a tremendous difference,” Schwab said. “Professional, intentional, and organized advocacy is important in any sector when it comes to what government policies end up looking like when passed.
“If you have a stake in that fight, you’re going to want your voice heard,” he added.
Each year in Washington, lobbyists win and lose major political battles on behalf of their clients. Here are three important examples:
1. CORPORATE POLITICAL DISCLOSURE
In 2013, the Securities and Exchange Commission removed an item from its regulatory agenda that would have required businesses to disclose their political donations to shareholders.
Koch Industries, the Chamber of Commerce, the Construction Industry Round Table, and other business interests lobbied the SEC to scrap the rule, winning out over government watchdog groups, academics, investors, and other groups favoring transparency.
2. TAX CUTS
All the big guns came out in 2017, when Congress was negotiating a tax-reform bill that would become President Donald Trump’s signature legislative achievement. Among the key provisions was a reduction in the corporate tax rate to 21% from 35%, a major victory for businesses.
More than 4,600 lobbyists were engaged on the tax components of the legislation, according to Public Citizen, a nonprofit watchdog group.
Just in the three months leading up to the bill’s passage, the National Association of Realtors spent $22.2 million on lobbying, while the Business Roundtable, made up of CEOs from leading companies, spent $17.3 million, and the Chamber of Commerce spent $16.8 million, according to the Associated Press.
For the realtors, the biggest issue was making sure homeowners wouldn’t have to pay capital-gains taxes when selling a primary residence, and the final bill preserved that exclusion.
3. CONSUMER PRIVACY
Reuters made big news in 2021 when it reported Amazon had killed or undermined privacy protections in more than three dozen bills across 25 states during the span of several years. The e-commerce behemoth has amassed a valuable trove of personal data on millions of American consumers.
In Virginia, for example, the company increased its political donations tenfold during a four-year period before convincing legislators to pass an industry-friendly privacy bill in 2021 that Amazon itself drafted, according to Reuters, which reviewed the company’s internal communications.
