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K Street Confidenial Jeffrey H. Birnbaum

Chamber's Josten Takes Frank Approach

By Jeffrey H. Birnbaum
Monday, December 13, 2004; Page E01

A banquet hall in Boca Raton, Fla., was packed last week for a Washington-style ritual essential for the business elite -- and closed to the press. The heads of large trade associations turned out in droves to hear R. Bruce Josten, executive vice president of the U.S. Chamber of Commerce, deliver his annual legislative outlook.

At 6-foot-3, with a bass voice lowered by years cigarette smoking, Josten looked and sounded a little like Lurch, the gloomy butler in the 1960s comedy "The Addams Family," attendees said. His prognosis was equally downbeat.

R. Bruce Josten warned trade association leaders against complacency. (James A. Parcell -- The Washington Post)

_____K Street Archive_____
Returning to the Genre He Started (The Washington Post, Nov 29, 2004)
Political Pollsters Don't Live on Elections Alone (The Washington Post, Nov 15, 2004)
For Recruiters, Election Day Is Just the Start (The Washington Post, Nov 1, 2004)
More Past Birnbaum Columns

Although troubling, such frankness was what the crowd wanted to hear. Business reps have come to depend on Josten to provide K Street's most complete and unvarnished forecast of the coming congressional session. In a profession that thrives on happy talk and hyperbole, Josten is renowned for being nuanced and realistic, often to a fault.

"He's widely respected around town for being a guy who doesn't just flit along the surface of things, he gets impressively down among the details," said Michael E. Baroody, executive vice president of the National Association of Manufacturers (NAM).

"He's a fixture," agreed John J. Castellani, president of the Business Roundtable. "Bruce is very astute when it comes to the issues. I rely on him and listen to him a lot."

His message this year came down to this: Despite the Republicans' impressive victories on Election Day, the corporate agenda won't be easy to get through Congress. What the House giveth, the Senate will taketh away. So industry groups will have to redouble their efforts to enact the promises their GOP allies have made.

Josten started off by warning that politics has gotten ugly and likely will stay that way. "We have come through an election filled with anger rarely seen in national politics," he said, according to a text of the speech. "That could quickly resurface in the 109th Congress." If it does, Capitol Hill could once again be the graveyard for lobbyists' dreams.

The good news, Josten said, is that the Senate now has 55 Republicans and that the GOP freshmen include "conservatives with strong ideological credentials" such as Reps. Jim DeMint (S.C.), David Vitter (La.) and former representative Tom Coburn of Oklahoma. In other words, he concluded, "the political center in the Senate has moved to the right."

But the center hasn't moved enough to tip the balance. Contentious bills require 60 votes to pass the Senate. "A handful of GOP and Democratic moderates in the Senate remain in position to broker whatever legislation comes to the floor," he cautioned. "Attempts to push a hard-right agenda in the Senate -- on issues from the judiciary to budgets -- could . . . prompt resistance from moderate members" and gum up the works.

"With slim margins, partisanship has the potential to deepen as we head into the 2006 elections [and] as party leaders come under renewed pressure to sharpen differences," Josten said. That situation, he added, leaves "little incentive to compromise."

When it comes to the economic legislation that business lobbyists care most about, he said, additional obstacles stand in the way. The highest of these: Americans don't care as deeply as they once did about pocketbook issues.

"For the first time in a generation," he said, "national security surpassed the economy as the most important voter issue facing the country and it can continue to dominate the agenda." Many domestic and some foreign matters will be "crowded out" if they don't fall under the banner of protecting the homeland.

Another barrier: the federal budget deficit, which will run to hundreds of billions of dollars each year. "The continuing flow of red ink," Josten said, "has the potential to interfere with any plans to overhaul Social Security or the tax code" -- which are President Bush's top fiscal initiatives.

Tax overhaul, in particular, could be fraught with hazards for companies, Josten said. Lawmakers of both parties are sure to want to cut "corporate welfare" and close "corporate loopholes." As a result, individual industries could face higher tax bills even if the president keeps his promise for "tax reform" to neither lose nor gain revenue overall.

Josten also pointed out that a few, costly mega-issues are only barely being discussed, though that can't last for long. One is the alternative minimum tax (AMT) for individuals, which was designed to ensnare millionaires who don't pay taxes, but which by the end of Bush's second term will catch 20 percent of all taxpayers. Fixing that problem would not be cheap. By 2008, Josten noted, "it would be less expensive to repeal the income tax than to repeal the AMT."

A second major worry, largely unaddressed, is the financial distress of the nation's private pension system. The Pension Benefit Guaranty Corp., which insures the vested benefits of pension plan participants, has already accumulated a $23 billion deficit following a string of corporate bankruptcies. Congress might need to shore up the program by the end of next year, according to Josten's text.

The government also has failed to deal with one of the country's most nagging concerns, rising health care costs. "We will see something in the area of health care legislation," Josten predicted, "but the real issue is how to dramatically slow costs . . . and no proposal yet offers a lasting solution."

Atop all of this, Congress will have to digest a heaping serving of legislative leftovers, Josten said. Reauthorizations are still pending for welfare reform, highway and mass transit funding, terrorism risk insurance and the highly controversial Patriot Act.

In addition, the business lobby will have to muster the strength to beat back a likely challenge to Trade Promotion Authority, which eases approval of trade pacts, and to try, finally, to drag over the finish line at least one version of tort reform. A limit on class-action lawsuits is closest to victory, though Bush has insisted that he most wants to crack down on medical malpractice liability.

Electoral cash, as always, will influence what Congress delves into. Josten believes the big-money, independent groups called 527s that made a mockery of campaign-finance reform this year are ripe for investigation. The free-spending of the telecom lobby might also inspire lawmakers to reopen the Telecommunications Act of 1996. "Considering that the telecommunications and technology companies spend millions on Washington lobbying and fundraisers," Josten said, "members of Congress may revisit this law since it will fit nicely into [their] preparations for the 2006 elections."

Josten, 54, understands Washington's folk ways as well as anyone. He is among a select group of association executives -- think of them as "the deputies" -- whose job is to keep track of essential details behind-the-scenes while their bosses own the limelight. Baroody does that at NAM. Dan Danner does the same at the National Federation of Independent Business.

At the Chamber, Josten has been Mr. Fix-it for decades. After graduating from Harvard (where he swam free-style sprints) and briefly building geodesic-dome ski chalets in Maine, he joined the Chamber's telemarketing sales force in 1974. Twenty years later, he was put in charge of public affairs, which now has 80 employees, including 16 full-time lobbyists. When Josten first took over, there were only two lobbyists -- one for the Senate and one for the House.

Josten works 12 hours a day during the week and on weekends dotes on his 4-month-old granddaughter. As a hobby, he makes ornate knives with handles fashioned from exotic woods. And like his role in Washington, proper knife-craft, he says, requires a certain subtlety. He hones his knives to exquisite sharpness but doesn't go too far. "Too sharp," he explains, "will be brittle."

Jeffrey H. Birnbaum writes about the intersection of government and business every other Monday. His e-mail address is kstreetconfidential@washpost.com.

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