For now, lobbyists play by Bush's rules

It didn't take Earl Pomeroy long to figure out that the Bush tax cut was on a fast track through the House - with big-time lobby power behind it.

Phone calls and e-mails asking the North Dakota Democrat to send a big part of the surplus back to taxpayers started rolling in only hours after the president's budget address last week. And many sounded alike, a clear sign of an organized lobbying effort.

But while this grass-roots blitz is gaining ground, an even greater sign of the bill's strength can be seen in the lobbying that isn't going on - on behalf of the business community.

Since President Bush's plan offers little in the way of corporate tax breaks, many in Washington expected businesses would quickly move to pile on additional cuts - possibly going so far as to hurt the bill's chances of success. But so far, corporate lobbyists have shown surprising restraint.

It's yet another sign of the administration's firm hand - and shrewd maneuvering - in getting its supporters to fall in line. And while the real tax fight will undoubtedly come later in the Senate, the Bush team appears to have sidestepped, at least for now, the GOP temptation to lard the bill.

"We're supporting the president's tax package," says Mark Bloomfield, president of the American Council for Capital Formation, which has organized the drive for corporate tax breaks since 1974.

"We also support additional pieces that would be consistent with support of the president's proposals. But we won't do this until the president's plan gets through," he says. "Otherwise, there might be a feeding frenzy, and the president's bill would be jeopardized."

Empty seats

Last week, most of the seats in the cavernous Ways and Means Committee room were empty. Usually, a vote on a $958 billion tax bill would turn out K Street in force, with everyone from ranchers to restaurateurs to silicon-chip manufacturers looking to add a few lines to the tax code that will help their business.

"When there are tax breaks, the line usually goes around the corner," says a Democratic committee staffer.

But so far, the White House is holding the line with businesses that this bill must focus on lowering tax rates for individuals. In fact, the administration has even won agreement from big industry groups to do some of the heavy lifting to get the bill through Congress - clean - and to hold off on their own agendas until the Bush tax plan passes.

So far, the strategy is holding. Business lobbyists have been meeting with the GOP House leadership to coordinate strategy on the plan. And lawmakers on both sides of the aisle say they are not seeing a lot of special-interest pleading to expand the tax cut for business.

"So far, I haven't been lobbied on this at all. It will all be coming in the next tax bill," says Rep. Nancy Johnson (R) of Connecticut, a leading member of the House Ways and Means Committee.

Ironically, while the public has been cool to the idea of a big tax cut, the corporate world is not. There's a lot of pent-up demand for corporate tax breaks, especially reducing or abolishing corporate income taxes. Other items on the business wish list include: abolishing the estate tax, stepping up the rate at which corporations can depreciate assets, and extending the tax credit for research and development.

Last week, the National Association of Manufacturers strongly endorsed the president's bill and promised to lobby Congress for it. At the same time, the group called for "follow-on tax relief" for business, including repeal of a corporate alternative minimum tax and depreciation reform.

"The president was very clear early on that moving the individual tax package was going to be his first effort. That doesn't preclude raising these issues down the line," says Dorothy Coleman, NAM president for tax policy.

Rapid mobilization

Opponents of the tax bill have been taken by surprise at how rapidly its supporters mobilized. Republicans launched a state-of-the art advocacy website last Tuesday, as President Bush introduced his budget to Congress (www.bushtaxrelief.com). The site encourages voters to e-mail their representatives in Congress, call in to talk-radio stations, and send Op-Eds to their local newspapers.

At the same time, conservative groups are turning up the heat on wavering lawmakers. Citizens for a Sound Economy has promised a $25 million campaign in support of the tax cut. The Club for Growth is running a television ad campaign in targeted congressional districts.

"Our goal is to make sure all Republicans know we expect them to vote on this or we will find a challenger to run in their district," says David Keating, executive director of the Washington-based Club for Growth.

The tax bill is already on a fast track in the House. A copy of proposed legislation to implement the biggest part of the Bush plan - some $958 billion in individual rate cuts - was delivered to members' offices the morning after the president's address. A day later, it was voted through the Ways and Means Committee in a party-line vote. The full House takes up the bill on Thursday.

The pace has left opponents scrambling to catch up. Last week, some 500 groups organized a coalition to lobby against the Bush tax plan as "too large and fundamentally unfair." Members range from the Sierra Club and the NAACP to the National PTA. Organizers say they are expanding the coalition that fought the nomination of John Ashcroft as attorney general.

"We've never seen a coalition on the progressive side of the spectrum before of this magnitude," says Ralph Neas of People for the American Way.

With passage in the House virtually assured, however, both sides are already focusing on the Senate, which takes up the plan in July.

"This bill could live or die based on a handful of Republican senators. They will hear from us," says Pete Sepp, vice president of the National Taxpayers Union in Alexandria, Va.

(c) Copyright 2001. The Christian Science Publishing Society