The new law is listed as D2 on a congressional summary in a typeface so small that you need reading glasses to decipher it. But for Juanita D. Duggan, the tiny tax break is a giant accomplishment.
Duggan's group -- the Wine and Spirits Wholesalers of America -- struggled mightily to persuade Congress to pass D2. And when it was finally enacted this month -- after a 20-year struggle filled with numerous near misses and personal travails -- she popped the champagne.
But she was almost too exhausted to celebrate. "There was so much stress and tension," Duggan recalled.
When people think of lobbying, they picture wealthy interests winning in Washington. That occurs, of course -- more now than ever. But almost nothing happens quickly, even for interest groups as well led and organized as Duggan's.
The saga of D2 is a perfect example of how things actually work -- or more often don't work -- in the nation's capital. While most legislation doesn't take two decades to succeed, it's always easier to stop a bill than to drag one across the finish line.
This particular measure was delayed for every reason imaginable short of locusts: bad luck, incompetence, procedural quirks, serious illness and even death. Yet the more than 400 whiskey wholesalers who will benefit are ecstatic. D2 is a tax credit worth hundreds of thousands of dollars a year to each of them.
The wholesalers' problem dated back three-quarters of a century to Prohibition. When liquor was allowed to flow again, domestic whiskey makers were all but out of business while importers (read: rum runners) were rich and ready to roll. Lawmakers gave the powerful importers a tax advantage that they denied to U.S. producers.
It worked this way: The tax on imported whiskey was imposed when the product was sold to a retailer, but the tax on United States-produced spirits was due when the product reached the wholesaler. Since wholesalers often warehoused the stuff for two or three months, the early payment was tantamount to an extra cost.
The law's anti-American bias was evident to anyone who heard about it. But changing so obscure and narrow a measure -- and one so costly to the average taxpayer -- turned out to be a problem. The Wine and Spirits Wholesalers began in earnest in the mid-1980s to campaign to equalize the treatment.
Fiscal policy at the time was being driven by the need to rein in burgeoning budget deficits. Any tax proposal that drained national coffers generally wasn't approved unless it was offset by a revenue-raiser. The wholesalers' plan to move the tax's collection point was a revenue loser -- and a boon to wholesalers -- and therefore was tossed out every time.
Duggan, a former White House aide, came from Philip Morris Cos. to head the wholesalers' association in 1998. She brought a new vigor to the tax effort. After one hard-fought and short-lived victory in the House, she decided she needed a cheaper and less controversial proposal. Instead of moving the collection point -- a plan that the Treasury opposed as a compliance nightmare -- she decided to seek a tax credit that would compensate her members for the extra expense of carrying American-made booze.
This idea was widely accepted on Capitol Hill and at Treasury. But the proposal, while significant for wholesalers, was too small and self-interested for a majority of Congress to care about. "It wasn't big enough for anyone to put himself down on the train tracks," Duggan said. "But it wasn't so small that it was budget dust."
To make matters worse, the lobbying firm that Duggan had hired to press the case disbanded, requiring her to scramble to find a substitute.
In 2000, Duggan also realized that she needed more supporters in the Senate, especially among the Republicans in charge. That summer she and a delegation of wholesalers approached Sen. Paul Coverdell (R-Ga.) and asked him to sponsor their legislation. Coverdell had a reputation as a lawmaker who could deliver for business interests. Securing his backing would be a coup. Not long after the meeting, Duggan received a handwritten note from Coverdell in which he agreed to champion her cause.
Two days later he died. "That was a low point; he was a great man," Duggan said. "He was the one guy who probably could have gotten this done. . . . That put me into a funk."
In 2001, Duggan started anew. She found a lobbyist -- the well-regarded Kenneth J. Kies -- a chief Republican backer in the Senate -- Jim Bunning of Kentucky -- and a dogged lead sponsor in the House -- Rep. Mac Collins (R-Ga.). "Mac is a very persistent fellow," Duggan said. "When he decides to do something, he won't let go."
Unfortunately for Duggan, the tax-cut bills in the first two years of President Bush's administration were kept "clean" -- devoid of industry-specific tax breaks. Plenty of lawmakers liked Duggan's legislation, but they had nowhere to put it.
Duggan hoped for a more favorable climate in 2003, but she was unlucky again. This time her setback was personal. Her 13-year-old son, Wilson, contracted a rare form of leukemia, and Duggan spent less and less time in the office. For the better part of a year she tended to her desperately ill child and delegated much of her work. She worried that her absence might undermine the progress she had made on the tax, but there wasn't much she could do.
As it turned out, 2003 wasn't an amenable year either. By the time Wilson had recovered and Duggan felt able to return to work full-time, Congress was ready to listen. Duggan and her lobbying team put on a full-court press in 2004.
Collins inserted the provision into a House bill that rewrote trade and tax laws. Bunning and then-Sen. John Breaux (D-La.) helped to place the provision into the excise-tax section of the highway bill -- the nation's largest-ever public works legislation. Those were real steps forward but not in the same direction. The provision had to pass both chambers of Congress in the same bill if it were ever to become law.
Gradually it became clear that the highway bill would be held over until 2005. But, in a surprise move, the trade-and-tax legislation sprang to life in the fall of 2004. Duggan sensed an opening. In fact, her many confederates on the Hill called and e-mailed her repeatedly to say that the House and Senate conferees who decided the contents of the final bill had okayed "the alcohol provision."
"My heart was racing," she remembered. Her long labors were about to pay off.
But it was the wrong alcohol provision. In the rush to finish the trade-and-tax bill, congressional aides had fallen into a shorthand method of communicating that confused Duggan's tax break with a different one that was being pushed by a separate alcoholic-beverage association. The other one -- a less expensive measure -- made the cut. Hers once again was an also-ran.
"I had a lot of explaining to do," Duggan said. Her members thought they had won only to learn they had been turned down at the last moment. They demanded to know why.
As 2005 began, Duggan was in a weakened position. Collins had lost his bid for the Senate and was no longer in Congress. Breaux had also retired. Worse still, the House wasn't willing to include the provision in its excise tax package and the Senate might start from scratch with the highway bill.
Lawmakers were also getting tired of hearing from the wholesalers on that old, odd topic. "You again?" more than one of them inquired as the wholesalers made their annual visit to the Capitol.
But all was not lost. The Senate didn't redo the tax portion of the highway bill, leaving Duggan's provision in contention for the legislation's final version. The bill was also large enough to accommodate a money-losing provision like hers -- $188 million over 10 years -- without anyone complaining.
When Congress completed a cluster of bills before heading home in August, the highway legislation was among them. D2 was tucked inside.
This time Duggan didn't even tell her members that victory was possible until the final bill had passed the House and was a shoo-in in the Senate. Then she quietly took her staff to a celebratory meal.
"We had educated so many people and talked to them so often that an air of inevitability surrounded this legislation," Duggan said. But given its history, she added, "I'm damn lucky it passed."
In Pursuit of Persistence
If you know of someone who has been pushing a legislative cause in vain for a long, long time, please e-mail the person's name and phone number to firstname.lastname@example.org.
Jeffrey H. Birnbaum writes about the intersection of government and business every other Monday.