Recession saps budget critics' lobbying power

WASHINGTON -- Some of the special-interest groups opposed to tax increases or spending cuts in President Obama's proposed 2010 budget plan are facing a more immediate pocketbook problem: The recession has sapped their ability to fight back.

Farmers, charities and marketers of student loans are among the threatened groups guarding their money this year as they mull how to counter Obama's proposals. Even the powerful Business Roundtable, which spent $13.3 million to lobby on federal issues in 2008, is hoping to save on advertising costs.

"We're going to be very careful with our resources," says John Castellani, president of the association of corporate CEOs. The recession, he says, is affecting "anyone's ability to advertise."

Not all interest groups are retrenching. The American Petroleum Institute went on the attack last week with a radio ad criticizing what it said would be "massive new taxes and fees on America's oil and natural gas industry" costing "thousands of American jobs." Insurers and drugmakers who face possible reductions in health care spending also are prepared to run ads.

Those industries, along with electric utilities, spent more on lobbying in 2008 than anyone else, according to the non-partisan Center for Responsive Politics. The pharmaceutical and health products industry led the way with $231 million.

"We don't see any need right now for any sort of advertising campaigns," says Billy Tauzin, president of Pharmaceutical Research & Manufacturers of America.

The drug industry's trade group spent more than $20 million on lobbying last year.

Health care industry: Too soon to tell

Health insurers, who helped kill the overhaul effort in 1994 with its "Harry and Louise" ad campaign, are holding their fire this time. "It's too early to tell" if ads will be aired, says Robert Zirkelbach, spokesman for America's Health Insurance Plans.

Some activists expect big money to flow eventually, especially on health care, where Obama is proposing the first full-scale overhaul since 1993. Rick Scott, a former industry executive who says he has invested $5 million of his own money in an ad campaign aimed at preserving choice and competition in the system, notes health care represents one-seventh of the economy.

"There are a lot of dollars," Scott says. "While we're in a recession, the health care industry has generally done pretty well."

The travel industry isn't waiting. It launched an ad campaign last week to push back against efforts by the Obama administration and Congress to reduce corporate spending on business meetings and events. Industry officials met with Obama at the White House last week.

"Our industry right now is no doubt in crisis mode," says Geoff Freeman, senior vice president at the U.S. Travel Association. "It's important for us to get in from the beginning and position ourselves from Day One."

The oil and gas industry, which spent $133 million on lobbying last year, is following suit. Faced with more than $30 billion over 10 years in new energy taxes, industry officials are "out communicating, reminding people of the potential job implications associated with this proposal," says Jack Gerard, president of the American Petroleum Institute.

From cotton farmers facing increased storage costs to venture capitalists facing higher taxes, the stakes are high. Obama took on more vested interests in his budget than any president in decades, says Bob Greenstein, executive director of the liberal Center on Budget and Policy Priorities. "This is going to be one hell of a political struggle," he says.

Lenders on defensive

With ad budgets constrained, groups that need a voice in Washington have flocked to lobbying firms in search of help. "There are more people seeking out lobbyists now because they're trying to deal with the big-government mentality," says Dave Wenhold, president of the American League of Lobbyists.

Still, leaders of interest groups who oppose parts of Obama's budget say the tight economy gives the administration an edge:

• Student-loan marketers whose jobs are threatened by Obama's plan to switch to direct government loans may use Facebook and blogs to make their case. "The recession absolutely will affect the dollars we get and the way we spend them," says Marcia Sullivan, government relations director for the Consumer Bankers Association.

• Farmers upset by Obama's plan to phase out payments to those with more than $500,000 in annual sales are hoping it dies in Congress, so they don't need to advertise.

"These are tight times for everybody," says Don Lipton, public relations director for the American Farm Bureau.

• Charities that could suffer if Obama reduces the tax break on itemized deductions enjoyed by families with incomes above $250,000 are joining forces, but they don't plan an ad campaign. Says Paulette Maehara, president of the Association of Fundraising Professionals: "We don't have resources to do that."