Panel May Trigger Lobbying Bonanza

Two of the biggest spenders on lobbying, the health care and defense industries, might end up working against each other in a furious four-month campaign focused on the deficit reduction committee-to-be.

The tension between the two heavy hitters centers on the provision of the debt ceiling agreement that triggers $1.2 trillion in automatic cuts split evenly between defense and nondefense spending if a joint Congressional committee fails to produce its own plan for
at least $1.2 trillion in savings by Thanksgiving. For some sectors of the health care industry, especially those that involve Medicare, that “trigger” could be the lesser evil. As a result, those interests might want the committee to fail to reach an agreement.

Andrew Rosenberg, a Democratic lobbyist who represents pharmaceutical companies and medical device firms, said drug companies may prefer the broad cuts of the trigger, which would be capped at 2 percent and would hit all players equally, to the committee’s recommendations.

“They need to figure out how that across-the-board cut would actually be administered … and how that stacks up against the risks that may result from the committee process,” he said. “In either case, providers feel like it’s hunting season and they are the only animal that is in-season.”

Another health care lobbyist, Stacey Rampy with Mehlman Vogel Castagnetti, agreed that across-the-board cuts may be more appealing to certain sectors. “Some of the guys who are really on the chopping block might feel potentially better about that,” she said.

But lobbyists for the defense industry are already working to avoid the trigger at all costs and are invested in seeing the Congressional panel of 12 members succeed.

“The 50 percent cut as a trigger would be devastating to the defense community, which means not only a loss of jobs among the major prime contractors but also among the subcontractors they use,” said defense lobbyist Michael Herson, who runs American Defense International (ADI). “Couple that with a loss in military capability and military might and a loss of our manufacturing base in the United States.”