Like many federal contractors, General Electric has a lot riding on the work of a new congressional “supercommittee” that will help decide whether to impose massive cuts in defense and health-care spending.
But the Connecticut-based conglomerate also has a potential advantage: A number of its lobbyists used to work for members of the committee and will be able to lobby their former employers to limit the effect of any reductions in the weeks ahead.
GE is hardly alone. Nearly 100 registered lobbyists who used to work for members of the supercommittee are now representing defense companies, health-care conglomerates, Wall Street banks and others with a vested interest in the outcome of the panel’s work, according to a Washington Post analysis of disclosure data. Three Democrats and three Republicans on the panel also employ former lobbyists on their staffs.
The presence of so many lobbyists adds to the political controversy surrounding the supercommittee, which will begin its work in earnest this week, when Congress returns to Washington. The panel has already come under fire from watchdog groups for planning its activities in secret and allowing members to continue fundraising while they attempt to negotiate a budget deal by Thanksgiving.
“When the committee sits down to do its work, it’s not like they’re in an idealized, platonic debating committee,” said Bill Allison, editorial director of the Sunlight Foundation, which is tracking ties between lobbyists and the panel. “They’re going to have in mind the interests of those they are most familiar with, including their big donors and former advisers.”
The 12-member committee is tasked with identifying $1.5 trillion in spending reductions over a decade, with the final plan to be approved by Congress. If no deal is reached, however, $1.2 trillion in across-the-board cuts will be triggered beginning in 2013, with the amount evenly divided between defense and non-defense programs.
The sheer scale of the plan has set off something close to panic on K Street, as many of the nation’s largest industries face reductions in potential revenue from federal programs.
Defense contractors, for instance, are eager to push the panel toward an agreement that reduces the scale of cuts to the Pentagon. The health-care sector, meanwhile, has a multitude of worries, from potential reductions in hospital payments to proposals to limit prescription drug prices under Medicare.
“Everybody in the Western world will be trying to influence the supercommittee at the same time,” said Loren B. Thompson, a defense industry consultant at the Lexington Institute. “If it was constructed to scare the daylights out of the political system, it’s certainly done the job.”
The stakes are particularly enormous for a diversified company such as GE, which has been awarded nearly $32 billion in federal contracts over the past decade, with much of that business going to lucrative defense and health-care subsidiaries, according to government tallies. GE’s chief executive, Jeffrey Immelt, also heads President Obama’s Council on Jobs and Competitiveness.
At least eight GE lobbyists used to work for members of the supercommittee, including the firm’s chief lobbyist on Capitol Hill, according to The Post’s analysis, which drew on data from the Center for Responsive Politics, lobbying disclosure forms and other public records.
A GE spokesman said the company has not been lobbying the supercommittee, but he declined to elaborate or discuss its plans for the coming months. Several lobbyists representing GE and other defense contractors said they expect to be heavily involved in the supercommittee’s debate this fall.
One GE lobbyist is Arshi Siddiqui, a former counsel to Rep. Xavier Becerra (D-Calif.), a supercommittee member. Siddiqui, who also represents other business clients at Akin Gump, said in an interview that her time in Becerra’s House office will have no bearing on the outcome of the debt-reduction talks.
“I’m a firm believer that everything will be on the table and everything will be litigated openly in this process,” Siddiqui said. “The stakes are too high, and members will ultimately make those determinations on the merits.”
Becerra said in a statement that neither his former employees nor their clients will receive special treatment.
“I will treat my work on this joint select committee no differently than I have my work as a member of Congress for the last 19 years,” Becerra said. “My decisions and votes speak for themselves. I firmly believe that each member privileged to serve on this joint select committee must be prepared to check their preconditions, special-interest pledges and sacred cows at the door.”
Overall, two-thirds of the lobbyists with committee ties are Democrats, including about two dozen former aides to Sen. Max Baucus (D-Mont.), the powerful chairman of the Senate Finance Committee, records show. Baucus alumni include three former staff chiefs: David Castagnetti, who represents health insurers, oil producers and other corporate clients; Jeff Forbes, who lobbies for medical-device makers and other health-care firms; and Peter Prowitt, who leads GE’s Washington lobbying team.
About two dozen lobbyists contacted for this article declined to comment or did not respond to interview requests. Baucus’s office said in a statement, “Money has never influenced the decisions Max makes, and he’ll continue to do what’s right for working Montana families, regardless of outside interests.”
Sen. Patty Murray (D-Wash.), who serves as co-chairman of the supercommittee, has employed more than a dozen currently registered lobbyists, records show. Murray’s counterpart, Rep. Jeb Hensarling (R-Tex.), employs a former lobbyist as a senior adviser, but he has only two former employees now on K Street, the data show.
Murray, a four-term senator, is widely known for her spirited defense of industries important to the Pacific Northwest, including computer software firms and defense contractors. At least two former Murray staffers represent aircraft giant Boeing, including former legislative affairs aide Shay Michael Hancock, who also represents GE and several other defense contractors.
Hancock did not respond to a request for comment. Murray’s office said her former employees’ lobbying efforts will have no effect on her decisions.
“As she has throughout her career, Senator Murray will be listening to the needs of everyday families, not lobbyists, as she weighs the tough decisions this committee is faced with,” communications director Matt McAlvanah said.
Sen. John F. Kerry (D-Mass.) has more than a dozen former staffers who work as Washington lobbyists. Spokeswoman Jodi Seth said, “It’s rare that Senator Kerry meets with lobbyists, and his record, across the board, makes it clear his decisions are based on the interests of Massachusetts and his own clearly established worldview after 26 years in the Senate.”
Another supercommittee member, Sen. Jon Kyl (R-Ariz.), has at least 10 former aides who work as lobbyists for some of the nation’s largest companies. Aides to Kyl, who is not running for reelection in 2012, did not respond to requests for comment.
One of Washington’s most influential lobbying groups, the Pharmaceutical Research and Manufacturers of America, employs lobbyists who previously worked for Murray, Baucus, Kerry and Rep. Dave Camp (R-Mich.). One top aide to Rep. Fred Upton (R-Mich.) used to represent PhRMA as a health-care industry lobbyist.
The drug industry group says it will lobby against a Democratic proposal to provide rebates to low-income seniors, who were forced to switch from the lower-cost Medicaid drug program when a new Medicare drug benefit was created in 2003. The proposal is estimated to save $112 billion over 10 years while also reducing costs to patients.
But PhRMA says the idea amounts to price-fixing and would hurt the Medicare prescription drug benefit, a program approved during the George W. Bush administration.
“It will certainly be a priority to educate policymakers about that issue as we get into the fall,” PhRMA spokesman Matt Bennett said. “We think policymakers need to understand how valuable the program is.”