- August 26, 2021
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By CAITLIN OPRYSKO
08/25/2021 05:55 PM EDT
Presented by the Tax Foundation
With Daniel Lippman
HOSPITALITY TRADE GROUPS PRESS SBA FOR EXPANSION OF COVID DISASTER LOANS: A coalition of trade groups representing various corners of the hospitality industry pushed Small Business Administrator Isabella Guzman on Tuesday for various expansions to an emergency loan program meant to aid small businesses hurt by the coronavirus pandemic, in the latest sign that the groups are grappling with the prospect that additional aid from Congress may not be on the way anytime soon.
— The leaders of six trade associations representing hoteliers, restaurants, franchises and the fitness industry told Guzman in the letter that the Economic Injury Disaster Loan program “is the only remaining federal solution that can provide critical access to capital for small businesses.” The program was created at the onset of the pandemic to help struggling businesses cover business operations, in tandem with the Paycheck Protection Program which was aimed at covering payroll expenses.
— But the groups, some of which were able to successfully make their case to lawmakers over the last year and a half, argue that the structure of the program was uniquely unsuited to their industries for various reasons. The loan program already faced so much demand initially that it had to cap loan amounts. Guzman has pledged to raise the cap to the originally intended $2 million. But the leaders of the American Hotel & Lodging Association, Asian American Hotel Owners Association, International Franchise Association, National Restaurant Association, International Health, Racquet & Sportsclub Association and the Coalition of Franchisee Associations pushed Guzman to do so more quickly and provide them with a timeline for that expansion.
— “In addition, our members overwhelmingly own multiple business units or stores and were limited in receiving funds for each one because of the restrictive affiliation rules,” the groups wrote, noting that those restrictions had been waived for the PPP program. In addition “to increasing the EIDL cap to $2 million per loan, we also encourage you to raise the aggregate cap and ensure the EIDL affiliation rules mirror those of the PPP to allow multi-unit operators, particularly franchisees, to equitably access the program.”
Good afternoon and welcome to PI. Send K Street tips: [email protected]. And be sure to follow me on Twitter: @caitlinoprysko.
A message from the Tax Foundation:
How you pay for it matters. While Washington debates the best ways to fund an historic infrastructure investment, one little-known pay-for is flying under the radar. GILTI is a Republican-passed policy that President Biden has proposed doubling down on. The only problem: it doesn’t work as advertised. Learn more about GILTI, a foreign tax with a local impact.
STUDY: MARKET CONSOLIDATION IN MAJOR INDUSTRIES LEADS TO INCREASED LOBBYING: As corporations in three major industries consolidated market power over the last 20 years, that corporate concentration closely aligned with a later surge in lobbying expenditures from those industries, according to a new study out today.
— The research, from the anti-monopoly American Economic Liberties Project, examined market concentration in the tech and internet, oil and gas and pharmaceuticals industries using the Herfindahl–Hirschman Index, and compared them with spending on lobbying. While it took several years for a correlation to show up in some cases, the study’s author Reed Showalter concluded, albeit tentatively, “that monopolies seek to acquire political power, whereas competitive businesses focus on competing with each other instead of dominating public rule-making bodies.”
— Though conventional wisdom might indicate that as corporations look to consolidate, that might be reflected in pre-merger lobbying increases, Showalter found that mergers actually predicted increased lobbying in the case studies he performed. Put another way: “It is not that firms lobby to get big, it is that they get big and then expand lobbying,” he wrote.
— For instance when examining a set of internet-based companies including but not limited to Google, Facebook and Amazon — all some of Washington’s biggest lobbying spenders — the industry’s Herfindahl–Hirschman Index value, a common measure of market concentration, accounted for around 43 percent of the variation in lobbying expenditures by those companies four years later. The trend was even more pronounced among pharma companies. “When pharmaceutical companies gained market power, they lobbied more, and when they lost market power, they lobbied less,” Showalter wrote.
— There’s reason to believe there are like minds in the Biden administration working on this issue: Showalter acknowledged the help of former Columbia Law professor Tim Wu for “engaging deeply to help shape this report in its early forms.” Wu is now an antitrust adviser on the National Economic Council. And Showalter works at the antitrust law firm founded by Jonathan Kanter, President Joe Biden’s pick to lead the Justice Department’s antitrust division.
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DAMN THAT’S FINE: The FCC is weighing a $5.1 million fine for Washington conspiracy theorists and lobbyists Jacob Wohl and Jack Burkman “for allegedly coordinating more than 1,000 unlawful robocalls aimed at swaying last year’s presidential election — a proposed punishment that would be the largest in FCC history under anti-robocall laws,” according to POLITICO’s John Hendel.
—“According to an FCC document laying out the proposed penalty, the unlawful robocalls included recorded messages telling people that voting by mail would mean their ‘personal information will be part of a public database that will be used by police departments to track down old warrants and be used by credit card companies to collect outstanding debts.’"
— The FCC is proposing to make Wohl and Burkman’s lobbying firm, JM Burkman & Associates, liable for their activities in addition to Wohl and Burkman personally. “The proposed fine is not final, and Burkman and Wohl will have a chance to refute the proposed FCC punishment. The FCC noted Burkman and Wohl had previously admitted to the robocall campaign under oath,” John notes.
CHAMBER VOWS TO TANK RECONCILIATION BILL: Moments after the House advanced a $3.5 trillion budget framework to unlock the reconciliation process for Democratic social spending and climate priorities, one of Washington’s biggest trade groups reiterated its opposition to the plan, which is likely to be paid for by an increase in corporate taxes. “The Chamber will do everything we can to prevent this tax raising, job killing reconciliation bill from becoming law,” U.S. Chamber of Commerce CEO Suzanne Clark said in a statement.
— Clark applauded the House’s simultaneous move to hold a vote by September on the bipartisan infrastructure bill that the Chamber does support, a guarantee extracted by a group of centrist Democrats who threatened to derail the reconciliation bill in favor of an immediate vote on the bipartisan, Senate-passed package. Prior to Tuesday’s vote, the Chamber doled out to provide the Democrats cover back home in their districts. “In contrast, we are pleased that the House will vote on the bipartisan infrastructure bill before the end of September,” Clark said. “Anyone who needlessly delays or tries to kill this bill is holding back our nation. I don’t know how anyone could go home and explain to their constituents that they voted to block money to fix a crumbling bridge or to replace lead water pipes running into schools. It is past time to turn the long-overdue promises of infrastructure investment into a reality.”
KATHY HOCHUL’S FAMILY TIES: Newly sworn in New York Gov. Kathy Hochul’s “daughter-in-law is a top lobbyist at a pharmaceutical firm that has been actively trying to influence state and federal lawmakers,” CNBC’s Brian Schwartz reports. “Christina Hochul, who is married to the governor’s son, William Hochul III, is a director of federal policy at Biogen. The company develops therapies that aim to combat Alzheimer’s disease, multiple sclerosis and spinal muscular atrophy. Its corporate headquarters is in Massachusetts.”
— “The company has been involved with a recent lobbying campaign in New York. State lobbying disclosure reports show that between January and June, Biogen paid $20,000 for Harter Secrest & Emery to engage with state lawmakers on multiple bills. The disclosure report shows that the lobbyists Biogen hired targeted leaders in the state Senate on ‘potential legislation related to Alzheimer’s disease.’ The report does not list Christina Hochul as a lobbyist working the campaign. Yet if Biogen continues to have business in the state, it could create an ethics hurdle the new governor will have to face as she settles into the job. A spokeswoman for Biogen told CNBC that Christina Hochul does not lobby at the New York state level and will not do so.”
— Americans for Prosperity has hired James Czerniawski to be its new senior policy analyst for tech and innovation. He was previously a tech and innovation policy analyst at the Libertas Institute, a Utah-based think tank.
— BCW has appointed Drew O’Brien president of Direct Impact, its grassroots firm and a member of the BCW Group. O’Brien will continue in his role as Northeast market leader for BCW.
— Brooke Hart has joined Huntington Ingalls Industries as executive vice president for communications. She’s a former Sierra Nevada Corporation executive.
— Chuck Cunningham is now working on policy and legislation focusing on Southeastern states for Hunter Nation. He previously was special adviser in the office of congressional and intergovernmental affairs at the Energy Department, and is an NRA alum.
— Becky Dickson is now a graphic designer for the Center for Reproductive Rights. She previously was senior designer for the DLCC and Pete Buttigieg’s presidential campaign, and is an EMILY’s List alum.
Kent Sabatini Joint Victory Committee (Joe Kent for Congress, Sabatini for Congress)
Silver Lining Victory Fund (Sens. Maggie Hassan, Catherine Cortez Masto)
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Carry On PAC (Leadership PAC: Mike Carey)
Knights of N.C.P. (PAC)
Youth of Nashville (Super PAC)
Mission Government Relations (Formerly Known As Muroff Law Firm, LLC): African Cultural Alliance Of North America (Acana)
Mission Government Relations (Formerly Known As Muroff Law Firm, LLC): Citizen Diplomacy International Philadelphia
A message from the Tax Foundation:
Competing in today’s global economy. Many U.S. businesses must operate in countries across the globe to compete internationally. When U.S. companies succeed abroad, it means more investment and jobs back home: Two-thirds of employees for U.S. multinational companies are based in America.
How you finance infrastructure matters. President Biden has proposed doubling the tax rate on GILTI, a little-known policy passed by Republicans in 2017 to discourage U.S. businesses from shifting profits from IP overseas.
GILTI is poorly designed. It doesn’t just tax IP, and it doesn’t just tax businesses that are looking to shift their profits into low-tax countries. GILTI unintentionally places a surtax on many U.S. companies that want to reach customers overseas.
Making bad policy worse. Whatever its intentions, GILTI is a flawed policy, and doubling down on it now will hurt us abroad, and at home.
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