Democrats' ambitious legislative agenda pushes K Street salaries skyward

Lobbyists for healthcare, energy and financial interests had a banner year in 2009, with the average payout for each reaching as high as $177,000.

Despite his push to rein in special interests, President Barack Obama sparked a boom on K Street with major new proposals on healthcare, climate change and financial policies.

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“The magnitude of the work done in the three fields is just huge,” said Michael Levy, of Brownstein Hyatt Farber Schreck’s Washington office.

New lobbying restrictions led to a decline in the number of registered lobbyists working for clients in each of the three industries, according to data from the nonpartisan Center for Responsive Politics.

The combination of more work for fewer lobbyists meant record payouts per lobbyist.

Lobbyists working in each of the three industries took home the most on average that they have in a decade, even when adjusted for inflation, according to analysis of the data by The Hill.

Many lobbyists work for clients in several policy areas, so the average payout by industry doesn’t necessarily equal the average overall compensation those lobbyists received. Spending was up in all three broad areas of healthcare, energy and financial-services reforms.

 Healthcare clients spent the most overall on lobbying at $544 million, which was roughly $60 million more than in 2008. But there were more lobbyists (3,405) on healthcare issues than on either energy (2,311) or financial legislation (2,654).

Lobbyists earned an average of $160,000 for healthcare-related work.

Energy clients paid $409 million for an average of $177,000 per lobbyist. Lobbyists for energy clients beat out financial lobbyists for top billing.

Energy has long been a significant source of lobbying spending. But as a generator of revenue for K Street, the sector really took off after 2007 when the Democrats, now in control of Congress, began pushing sweeping climate change legislation.

A number of new clean-energy companies have hired lobbyists for the first time in the past two years.

Financial firms also have increased their spending on lobbying. The sector spent $465 million lobbying in Washington in 2009, which was about $8 million more than in 2008. But there were 167 fewer lobbyists registered for financial, insurance and real estate clients.

Obama drove huge interest on K Street with a major push for new financial regulations following the worst crisis since the Great Depression. The House Financial Services Committee spent the bulk of 2009 debating major new policies to rein in Wall Street and prevent future taxpayer-funded bailouts.

The House passed legislation in December, a little more than a year after Congress approved a $700 billion bailout for the financial industry.

“Wall Street was bailed out and benefited from taxpayer largesse, and now K Street is benefiting from it,” said Carmen Balber, head of the Washington office at Consumer Watchdog.

“We all know the health insurance lobby has been such a massive undertaking and people have spent so much money in supporting or opposing it, but still, on the financial side with fewer firms and fewer lobbyists, the numbers are so much higher. That’s a picture of the stakes on Wall Street,” Balber said.

Levy of Brownstein said the growth in financial services lobbying was an indication more of the crisis the industry faced last year than of specific proposals on Capitol Hill.

“Financial services is really less what the president’s agenda was and just the massive collapse of the sector,” Levy said. “A lot of it is reactive to events rather than reactive to the president’s agenda.”

Lobbying revenue across the three industries has not always been on the rise. Revenue adjusted for inflation dipped in all three sectors in 2002 from 2001. And lobbying revenue for financial clients dipped each year between 2003 and 2006.

Since 2007, however, lobbying revenue has been on an upswing across the three industries.

The biggest swing has been in the energy field, with energy clients spending $387 million in 2008 compared with $273 million in 2007.