Lobbyists’ fight against sequester cuts moving into a new phase

Lobbyists believe pressure on Congress to reverse the sequester will increase as worker furloughs and government cutbacks take hold across the country.

With lawmakers unable to reach a last-minute deal to avert $85 billion in budget cuts, President Obama has ordered agencies to implement the sequester. That means a 9 percent cut across the board for non-defense spending and 13 percent for defense during the remainder of the fiscal year.

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Lobbyists for defense and healthcare interests have been pushing to stop the budget cuts for more than a year. They have been joined by others on K Street who plan to amp up their advocacy as the sequester potentially leads to travel delays, lost education funding and worker layoffs.

“Up until now it has all been hypotheticals and theoreticals. Once the first furlough notices go out, and once school districts get notices of how much they have to cut, this will become real,” said Joel Packer, executive director for the Committee for Education Funding. “I do think people are going to be angry and doubly angry because these cuts don't make sense.”

Other lobbyists who are fighting the sequester agreed that the battle has moved into a new phase.

“I think pressure is going to grow over time,” said Erik Hansen, director of domestic policy for the U.S. Travel Association.

The travel industry group — whose members include hotels, cruise lines, convention centers and state tourism authorities — has already set up a text message service for frustrated travelers. People experiencing delays can text “DELAYED” to a phone number set up by the trade group and receive instructions on how to get in touch with their member of Congress.

The travel group is worried about worker furloughs at the Federal Aviation Administration, the Transportation Security Administration and Customs and Border Protection, fearing they will make people think twice about their work events or summer getaways.

Hansen said the trade group plans to gather up evidence of travel delays caused by the budget cuts.

“We are going to start collecting stories from our members about conferences and meetings that were canceled from fears over the sequester. We are also going to collect individual stories from travelers whose travel plans were affected by the sequester,” Hansen said.

Some lobbyists said their clients are frustrated with how little is still known about the sequester cuts.

Kevin O’Neill, deputy chairman of the public policy department for Patton Boggs, said clients have been flummoxed trying to decipher what programs agencies plan to axe.

“A lot of clients just have had a frustration with the information flow about the sequester, including what it would mean for their actual interests,” O’Neill said. Others expect lawmakers will be hearing more from voters as the cuts take effect.

“We do expect the public pressure to build,” said Chuck Loveless, director of federal government affairs for the American Federation of State, County and Municipal Employees (AFSCME).

Loveless said AFSCME was being swamped with phone calls on Friday from its leaders and activists. Members of the 1.6 million-member public sector union could be affected by sequestration, as some state government workers could be furloughed due to lost federal funding.

Loveless is urging Congress to end tax breaks for the most wealthy in order to replace the sequester, as Democrats have proposed.

“We do hope that it will bring lawmakers back to the table to support a balanced package with significant new revenues on the table,” Loveless said. “How long that will take, I can't tell you with any surgical precision.”

Business groups, which are concerned that the sequester could put a dent in corporate profits, have bristled at Democratic proposals to limit tax credits.

The U.S. Chamber of Commerce said new taxes offered in a Senate Democratic bill are not the answer to stopping the sequester.

“This legislation would be worse than even the sequester. It would not prioritize less spending; rather, it would impose new taxes on businesses in specific industries. Like the sequester, this approach is not the answer,” said Bruce Josten, the Chamber’s executive vice president for government affairs, earlier this week in a letter to senators.

Josten also said the sequester is “bad public policy and should be replaced with prioritized spending cuts.”

The Democratic bill failed to move in the Senate. A Republican alternative to give Obama more flexibility on implementing the cuts also failed to advance. Pentagon contractors have long lobbied against the sequester, saying it could lead to job losses and slower economic growth. Giving the president more power over on where to cut might gain their support.

“I think the industry wants Congress to grant the president the authority on where to execute the cuts, instead of these across-the-board cuts, which will really hurt,” said Michael Herson, president of American Defense International. “That will be the next pressure point.”

Emily Holubowich, executive director of the Coalition for Health Funding, noted that it will take time for the sequester’s effects to take shape as government slowly works to notify workers of furloughs and cut back on services.

“Sequestration is really a slow-moving train wreck and we are going to get waves of impact,” Holubowich said. “That is the difference between this and a government shutdown, which is dramatic and immediate.”

Opposition to the sequester could lead to more business for the influence industry — assuming companies don’t eye their lobbying budgets for cost-saving cutbacks of their own.

“It's a mixed bag. In some cases, it will hurt. In some cases, it will help,” Herson said. “Some people will put in more resources in order to win the fight for a shrinking pool of funding. … In some cases, it will hurt K Street because it will lead to companies cut costs. Where can you cut costs? Outside consultants.”