K Street

K Street columnist Jeffrey Birnbaum was online to discuss the intersection of business, politics and government on Tuesday, June 26, at 1 p.m. ET.

A list of Birnbaum's columns can be found here.

A transcript follows.

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Jeffrey Birnbaum: Hello all. Thanks for writing in. I see that there are lots of questions, and on a pretty wide variety of topics. So, without ado, further or otherwise, let's get going!

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Washington, D.C.: I read your item on ABA. Won't there be some kind of consolidation in the trade associations for the tech companies?

Jeffrey Birnbaum: I assume you meant the AeA, which is an umbrella groups for tech firms. (Then again, I also wrote about the ABA, the American Bankers Association, which is also merging with another bankers group.) In any case, you are correct. I do expect that there will be consolidations in the tech world; clearly there are too many high-tech lobby groups. Even insiders agree with that. So yes, I do expect that tech associations (though maybe not AeA in particular) will merge over the next few years in much the same way that the ABA has recently agreed to do. Too many acronyms maybe?

washingtonpost.com: Lobbyist Built a Career On Unconventional Wisdom

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Washington: Who's winning in the immigration battle, the big business lobbyists or the right-wing talk show hosts and their ilk?

Jeffrey Birnbaum: Well, you might not be keeping up minute to minute, but the Senate just agreed to take up the immigration bill, exceeding the 60 votes needed to do so by 4 votes. That's up from only 45 votes to do something similar a couple weeks ago. That's a fairly strong showing. Although it is still possible that the bill itself could fail after being amended this week, the vote today is a very solid sign that the big-business backers of the measure seem to be outflanking the radio talk show hosts you refer to. Suppoters of the bill say it needs Demcoratic votes in the upper 30s and Republican votes in the lower 20s to succeed, and that is clearly within reach now.

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Illinois: What do you think of Obama's lobbying proposals over the weekend? Won't that finally get rid of special interests. Finally?

washingtonpost.com: Obama Pledges Stronger Lobbying Reforms

Jeffrey Birnbaum: Nothing will get rid of what you call the special interests. They are a permanent part of the firmament. Obama, though, may be limited the types of people willing to work for him in his White House if he sticks to his promise last week to bar those people from ever lobbying. That might be too high a bar for some people to take, especially given the amounts of money available for those who lobby even a little bit. Obama is taking a popular tack, however, whatever its practical impact.

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Arlington, Va.: Why is the Congress going after private equity funds? They supply a lot of money to run things these days and are behind a lot of extra value in the stock market because of corporate takeovers that they are behind. It doesn't make any sense to me that they are being targeted in such a big way.

Jeffrey Birnbaum: I do not take sides on this issue (or any other one for that matter) but I will try to explain why Democratic lawmakers and some Republicans too are interested in increasing taxes on the owners of private equity funds. First of all, those folks have made themselves targets because of the massive sums they earn, in some cases of billions of dollars in a single year. In America, we root for the underdog and they are not in that category. Second, the tax rule, it's not even a law, that allows them to pay taxes at the low capital gains rate rather than ordinary income tax rates is not that easy to justify. That's especially true for private equity firms that are going public but are avoiding the higher tax by not doing so as a corporation like almost every other publicly traded firm. To get a special low rate requires a lot of good reasons and with income that high, the reasons so far are not good enough. In addition, Congress is hungry to ways to pay for lots of things including paring back the alternative minimum tax, which would raise taxes on lots of middle income folks if it is not repaired. That's a lot of powerful reasons for private equity to be in the cross hairs.

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New York: What impact will the Supreme Court decision on campaign spending have on the elections, and will interest groups dump even more money into the system now?

washingtonpost.com: 5-4 Supreme Court Weakens Curbs on Pre-Election TV Ads

Jeffrey Birnbaum: I know that the ruling will now allow labor unions, corporations and interest groups to spend money on campaign ads right up to election day, striking down a law that prohibited such commercials in the weeks before an election. But my guess is that opening, which the interest groups would love to take advantage of, will be blocked at least temporarily by other court challenges. So the impact in 2008 will be less than now meets the eye.

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District of Columbia: I saw you the other day at the American League of Lobbyists event and you seemed to dismiss the usefulness of public relations people. Did I misunderstand what you said?

Jeffrey Birnbaum: Thank you for attending. I hope you found the session useful. I did not say anything close to what you suggest that I did, however. I said that PR people often misunderstand what reporters need and I tried to offer some tips about how they can help more. Such as -- finding journalistic stories, which have conflict, irony or real news in them, rather than offering mere promotions for their clients, which reporters stay away from. PR people play a vital role in what I do, and what other journalists do. We need each other. I was hoping to suggest that PR people work as real, fact-giving and fact-checking resources for journalists. That's what the best people in your profession do routinely and I appreciate very much what they do.

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Detroit: So what's your bet on immigration now? I thought you were saying the thing is dead. It doesn't look that way any more.

Jeffrey Birnbaum: Yes, I admit that I did say the immigration bill was dead when it was taken off the Senate schedule a while back. And I could very well be wrong. (I bet you don't see that admission very often!) At the same time, the measure will have to fend off a series of killer amendments this week from both the left and the right. I might end up being right after all, but at the moment, as I said earlier, it looks like the bill could actually pass narrowly in the Senate on Friday. The House, however, is a different story. So I could be correct in the end. One can almost never go wrong by predicting inaction in the U.S. Congress, sad to say.

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Dallas: Will oil companies get to keep their drilling breaks or will the Democrats take them away in the energy bill up there in Congress now?

Jeffrey Birnbaum: I'm not sure it's an even-or situation. I think the Democrats will pass a bill all the way through that adds all sorts of incentives for renewable fuel productions. But so far Republicans have blocked efforts to take away any oil and gas drilling aids. House action that is still pending will determine if that balance will hold. But if it doesn't, then President Bush will surely step in to make sure that it does, his veto pen at the ready.

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Re Obama: I think its a shame that you don't praise Obama's integrity.

It should be illegal for any government employee to work for a lobbiest after leaving public service. The relationships simply trump the ballot box and circumvent the voices of the REAL constituents.

Mercenary third party lobbying should be outlawed with the lawyers going to work directly for a single organization they want to represent. Bundling, the concentrated power of multiple client campaign donations - its makes for a powerful unelected, unbalanced, and unaccountable player within our system.

When a lobbyist goes to work he should show up with his employee-identifying business card in hand, and beholding organization's name badge firmly attached to his jacket as they troll the halls of congress with a favor to pimp.

Jeffrey Birnbaum: Obama is sincere in his effort to remove interests and their advantages from the system. I just don't think it will work all that well in the real world.

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Washington, D.C.: I went to the American Library Association convention in DC. All the speakers are liberals and/or left-wing. Is that against the 501c rule?

Jeffrey Birnbaum: Not that I know of. 501c3s, which are a kind of nonprofit, must proscribe their lobbying, however. You were not witness to any of that, so I don't see any violation. You may on the other hand be offended by what you heard, which is a different and perfectly legitimate view.

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Bethesda: I think I recall that you once worked for the Wall Street Journal. And now you also work for Fox News Channel. What do you think about Murdock buying Dow Jones? Is that a good idea?

Jeffrey Birnbaum: That's very flattering, and you are correct. I worked for the Wall Street Journal for 16 years and have worked as a contributor and political analyist for Murdoch's Fox News Channel for eight or nine years now. As a result, I have never had the kinds of fears about editorial interference that some of my old colleagues at WSJ has expressed. I have never been steered one way or the other in my analysis on Fox and have found working there extremely professional and first rate in every way. That, I hope, will lend some comfort to WSJ folks because it looks like Murdoch is about to prevail in his takeover fight.

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Washington, D.C.: The president is going to veto everything in sight or so we hear. That can't be a good thing for the country I don't think. The last thing we need is more fighting between the political parties don't you think?

Jeffrey Birnbaum: I agree with you. Setting aside the individual issues that might prompt those vetoes, just saying no prevents government to even attempt to solve problems. I am the last one to suggest that government actual fixes things; I like to say it can move incrementally in a positive direction--sometimes. But confrontation leads to gridlock and prevents government from operating at all. That's bad, especially in the face of obvious problems that need solving--like immigration--and such basic needs as keeping the government operating, which will be threatened if Bush vetoes as many basic appropriations bills as he threatens to. Can't we all just get along?

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Las Vegas: Who do you think is going to win the fundraising battle for president this upcoming time? I read that McCain and Edwards are going to be the losers. How does anyone know this soon?

Jeffrey Birnbaum: Rudy and Hillary will probably come out on top, for what that's worth. McCain and Edwards, from all we know, will again be laggards in second quarter reports coming up soon. We know this because aides to these candidates tell us so, or at least they tell us what they want to tell us as a way to set expectations for when the real numbers are released. The X factor in all of this is the tremendous amount of money coming in unbidden via the Internet, and there Obama and, I hear, Fred Thompson, are making a real killilng. Money is an important measure of popular support these days, especially given the Internet fundraising machines out there. Everyone can play and lots more people do.

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Lancaster, Penn.: Don't you think Obama finally has it right on lobbyists? It's time to get them out Washington and out of the White House.

Jeffrey Birnbaum: Obama may have his heart in the right place (or at least his political antenna), but he cannot keep lobbyists from influencing things here. They are protected by the Constitution. Besides, he would simply make it harder for lobbyists to walk through the revolving door into and out of government. He would not prevent them from working in D.C. Nor should he, really. Decision makers in the capital would be deprived of most of the information they now use to make their decisions. That's the way it is, like it or not.

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Washington, D.C.: Can private equity firms beat back the tax increase?

Jeffrey Birnbaum: I don't think so, but they can ease the burden on themselves with lots of clever lobbying. I predict that that will happen, too. Lobbying is effective on the margin of legislation and rarely stops entire movements, which often bubble up from popular support. Watch the tax increase on private equity and other like entities be whittled down and phased in as the legislation moves forward.

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Bethesda, Md.: What ever happened to the ethics and lobbying bill?

Jeffrey Birnbaum: It's still pending having passed the House and the Senate. Backroom talks could take a long time, though, and the final bill, watered down is my guess, probably won't emerge until late this summer or even into the fall. I don't think there's a lot of enthusiasm for actually passing soemthing into law. Just casting a vote in favor or something called "lobbying reform" might be enough to woo the voters. Keeping the bill from becoming law would allow the synbiotic relationship between lawmakers and lobbyists to continue, at the same time. Quite a trick, no?

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Jeffrey Birnbaum: Thanks for writing in. That was a lively and full discussion. Let's try it again in a couple weeks. See you then!

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