Companies that earn billions from Pentagon contracts and lobby for billions more, universities that receive billions in research funding and financial firms that oppose new taxes and support old tax breaks for their industry figure in the top career donors to the three Senate Democrats on the super committee.
As we noted in our previous post on the three House Republicans on the super committee, the dozen members of the super committee–formally known as the Joint Select Committee on Debt Reduction–all have private interests backing them who are far more concerned with their own bottom lines than they are with broad public policy. Those interests might come into play as the members of the super committee craft $1.5 trillion in debt reduction measures–spending cuts, revenue increases, or both–that can win a majority of their votes.
For some interests, achieving a plan is critical–if the super committee fails to agree on a proposal by November 23, or if Congress rejects it, defense and discretionary domestic spending will be cut by $1.2 trillion over ten years. Others seek to avoid reforms to the tax system that would raise revenues by closing loopholes or seeking cuts from entitlement programs, neither of which would occur if the super committee fails to reach an agreement. Some lawmakers have top donors pushing in opposite directions.
Consider super committee co-chair Sen. Patty Murray, D-Wash. Among her top donors is Boeing, a major Washington state employer and a major Pentagon contractor–some 43 percent of its income came from government contracts, according to its most recent annual report. Cuts in the Defense budget would mean cuts for Boeing. For Microsoft, another top Murray donor, cuts to discretionary spending could mean less funding for hospitals and doctors to purchase health information technology–which the Redmond, Wash.-based software company makes. On the other hand, Emily's List, a major donor to progressive women seeking office, has said preserving entitlements like Social Security and Medicare are key issues.
One Murray donor, the University of Washington, has already seen funding increase for a program it lobbies for. The Budget Control Act, which raised the debt ceiling and created the super committee, provided $13 billion for Pell Grants, financial assistance for those earning undergraduate degrees.
We went through the most recent lobbying disclosures for each of the top five donors to the three Democratic Senate members of the super committee, all appointed by Majority Leader Harry Reid, and highlighted one or two issues that might come up as the members consider ways to cut spending, raise revenues–or both. Not every big donor had an identifiable interest that might figure in the committee's work, but these filings were made before the bill that authorized the Joint Select Committee on Debt Reduction had been passed into law.
Lobbying disclosures for large organizations can list dozens or even hundreds of bills and issues that they try to influence or monitor, and the big donors to super committee members are no exception. The companies, trade groups, universities, labor unions and other organizations whose political action committees, employees and their family members have contributed the most to the dozen members charged with addressing the nation's debt lobby on a wide range of issues. Here are a few:
Sen. Patty Murray, D-Wash.: Head of the Democratic Senatorial Campaign Committee, the fundraising committee for Senate Democrats, Murray is the co-chair, along with Rep. Jeb Hensarling, R-Texas, of the super committee. Murray's top career donors are abortion rights defender Emily's List, software maker Microsoft Corp., the University of Washington, Boeing and the environmental organization the Council for a Livable World, according to the Center for Responsive Politics.
- Emily's List: Emily's List is a group of political committees whose mission is to elect pro-choice women to Congress. On its website, the organization says it has raised more than $85 million for candidates since 1985. Emily's List does not lobby Congress. In the blog on its website, it has expressed a preference for preserving entitlement programs, including Medicare and Medicaid.
- Microsoft: The Washington state-based software maker lobbied on federal health information technology programs. The American Recovery and Reinvestment Act–better known as the stimulus–provided $22.6 billion in funding for health IT projects. Peter Neupert, vice president of the company's health solutions group, testified before Congress in January 2009 about the technologies the company had to offer to health care providers (the Recovery Act health IT funds go to doctors and hospitals, who then purchase software). Microsoft is also a federal contractor; since 2009, it's been awarded more than $275 million in contracts according to data in USASpending.gov.
- University of Washington: The school lobbies on funding for Pell Grants. In 2010, they amounted to more then $32 billion in tuition aid to students and their schools; since 2001, the University of Washington has received more than $837 million from the program, according to data on USASpending.gov. The school also lobbies on all appropriations bills; since 2001, the University of Washington has received $8.9 billion in federal support, including grants and direct student loans, according to data in USASpending.gov.
- Boeing: The aerospace giant was the second largest recipient of federal contracts in 2010, and lobbies on Defense, NASA and other spending bills. In its most recent annual report, Boeing disclosed that 43 percent of its revenues in 2010 came from federal government contracts, and notes, "The termination or reduction of funding for existing or new U.S. government programs could result in a material adverse effect on our earnings, cash flow and financial position."
- Council for a Livable World: The political nonprofit advocates on a variety of issues related primarily to nuclear proliferation. Their most recent lobbying disclosure report touches on many of these–opposition to spending on missile defense systems (which they peg at more than $10.7 billion in the current budget), and support for increased funding for nuclear material security and nonproliferation; in 2010, $2.1 billion was appropriated for such programs, according to the Council.
Sen. John Kerry, D-Mass. The 2004 Democratic candidate for President is chairman of the Foreign Relations Committee, and sits on the Finance Committee. He's also chair of the Communications Subcommittee of the Commerce, Science and Transportation Committee. Kerry's career campaign finance totals include those from his unsuccessful run for the White House; his top donors include two higher education institutions, the University of California and Harvard, telecom giant Time Warner, and two major players in the 2008 financial meltdown and subsequent bailouts, Goldman Sachs and Citigroup.
- University of California: The public university has ten campuses, helps manage three national laboratories, and lobbies on appropriations and budget bills that affect federal support for tuition, small business proof of concept centers, agriculture research, climate research, defense research and budgets for NASA, the National Science Foundation, the National Institute for Occupational Safety and Health, the National Institutes of Health and other federal agencies. According to data from USASpending.gov, University of California has received about $32 billion since 2001 in federal support, including direct student loans and grants for research.
- Harvard University: The Ivy League school lobbies on several education funding measures, including student aid and loans and support for research. According to data in USASpending.gov, the school has received $4.9 billion in federal support since 2001, primarily from the National Institutes of Health. The school also lobbies over the tax treatment of university endowments–Harvard's endowment totaled $27.6 billion at the end of June 30, 2010, the latest figure available. In 2008, as the costs of the financial bailout mounted, Sen. Charles Grassley requested a study from the Internal Revenue Service on taxing profits generated by the then-$400 billion in investments that college and university endowment funds had accumulated, according to a report in U.S. News and World Report.
- Time Warner: As noted above, lobbying disclosure forms often lack specificity, and Time Warner's most recent disclosure on tax issues is a case in point. They note that they are lobbying on, "Tax issues related to media, entertainment and communications; including the Administration's Fiscal Year 2012 Revenue Proposal and Tax Reform." Precisely which of those revenue proposals concerns Time Warner is not specified; they range from eliminating capital gains on investments in small businesses to changing the tax treatment of life insurance contracts. An outside lobbying firm for Time Warner disclosed lobbying on a not-yet-introduced measure to limit the deductibility of advertising expenses; Adage reported that the advertising industry fears that the deduction might be limited in a future tax reform act. Time Warner's revenues in 2010 included $5.6 billion from advertising, according to its most recent annual report. Time Warner is also lobbying on various bills aiming to reform the Postal Service; critics argue that the current rate structure benefits larger publishers at the expense of smaller circulation magazines. The U.S. Postal Service had a $8.5 billion loss in the 2010 fiscal year.
- Goldman Sachs: Speaking of vague language in lobbying reports, Goldman Sachs disclosed that it's lobbying on "Issues related to tax reform." One of the investment bank's outside firms, Capitol Tax Partners, disclosed in its most recent filing that it's lobbying on a measure that would permanently exempt some foreign income from taxation–that exemption expires at the end of 2011. Goldman Sachs' most recent annual report notes that if the exemption is not extended, "the expiration may materially increase our effective income tax rate beginning in 2012."
- Citigroup: Like Goldman Sachs, Citigroup lobbied on a bill that extends the tax exemption for foreign income. In its most recent annual report, the company notes that without an extension of the exemption, its tax expense would increase significantly. In the same report, the company notes that the Obama administration and Congress have discussed lowering the U.S. corporate income tax rates–generally, such proposals are accompanied by discussions of closing loopholes that allow profitable companies to avoid taxes, The annual report states, "While Citigroup may benefit in some respects from any decreases in these corporate tax rates, any reduction in the U.S. corporate tax rate would result in a decrease to the value of Citi’s DTAs, which could be significant." DTAs–deferred tax assets–include net operating losses, tax credits and other write-offs that the company can use in future years to offset its tax liability. In its annual report, Citigroup estimates that its DTAs are worth more than $51 billion.
Sen. Max Baucus, D-Mont. The chair of the Senate Finance Committee, Baucus played a key role in the enactment of the Patient Protection and Affordable Care Act; he's also the top Senate tax writer. His top career donors include New York Life Insurance, Goldman Sachs, American International Group, Ernst & Young and JP Morgan Chase & Co.
- New York Life Insurance: The largest privately held insurer in the United States disclosed lobbying on, among other issues, proposals to raise $7.7 billion over ten years taxing corporate owned life insurance policies and to reduce the deduction dividends received by corporations that own other domestic companies' stock, which could raise more than $4 billion over ten years.
- Goldman Sachs: See entry above.
- American International Group: Insurer AIG no longer lobbies; in September 2008, at the height of the financial crisis, Federal Reserve rescued the company with a bailout initially costing $85 billion.
- Ernst & Young: Like KPMG, a top donor to Rep. Jeb Hensarling, some Ernst & Young partners ran afoul of the Justice Department for promoting tax shelters that created phony losses. The firm lobbies on regulatory issues affecting the accounting profession, including Sarbanes-Oxley and Dodd-Frank, and also lists "general issues related to tax applicable to partnerships" as a specific area of interest. Ernst & Young also lobbies for others. It disclosed lobbying on tax issues related to foreign insurance and reinsurance companies for the Association of Bermuda Insurers and Reinsurers–Obama's 2012 budget proposal would disallow deductions for reinsurance premiums, raising $11.7 billion over ten years, according to the Joint Committee on Taxation. For Exxon Mobil, Ernst & Young lobbied on proposals to end deductions and tax breaks for oil producers that could raise, over ten years, more than $36 billion (some of those taxes would be raised from natural gas producers).
- J.P. Morgan Chase & Co.: The banker, hedge fund operator, investment house and all around financial powerhouse lobbied on a measure that would permanently exempt some foreign income from taxation–that exemption expires at the end of 2011. Its most recent annual report notes that it had accumulated, at the end of 2010, $19.3 billion in such earnings, and would owe $4.3 billion on taxes on them.