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August 1, 2014

The State of K Street | K Street Files

No one expects a boom in the lobbying business this year. But out of the dysfunction and stalemate of 2013, K Streeters see signs of potential work in select areas, including a revival for an old standby: appropriations.

The bipartisan budget deal (tiny as it may have been) from late last year has given lobbyists cause for hope that a return to regular order on appropriations bills will offer them a legislative vehicle to work on behalf of clients.

Still, for any Hill staffers or soon-to-be-ex-members of Congress eyeing a gig downtown, the hiring scene on K Street will continue to be tight and the competition fierce.

Lobbyists are also trying to woo lawmakers to extend 55 lapsed tax credits. A patent bill, immigration matters, a farm bill, regulatory work and trade policy may also drive business. And K Streeters are looking to set the stage for longer-term overhauls of the nation’s tax code and housing finance system.

But it’s unclear whether that will be enough to keep business steady in an election year that could usher in its own variety of political brinkmanship and do-nothingism.

When in doubt, a lobbyist looking for something to do can always, always attend a fundraiser.

Larry OBrien 172x240 The State of K Street | K Street Files

Larry O’Brien (CQ Roll Call File Photo)

“You keep thinking it can’t get any crazier, and it just keeps rising to a new level of insanity,” said longtime OB-C Group lobbyist Larry O’Brien, a top donor to Democrats, about the K Street fundraising scene. “I measure it by volume of requests.”

Another veteran of K Street, Republican Lanny Griffith, agreed. “If nothing else comes to pass, we will see 2014 probably break records on fundraising.”

But Griffith, CEO of the BGR Group, expects more from this year. He called the budget deal a “great development” that could signal a boost to ailing appropriations practices. Even though an earmark moratorium remains in place, lobbyists — like lawmakers — can use the funding bills as legislative vehicles for policy matters looking to hitch a ride.

BGR’s revenue in 2013, Griffith said, was the best it’s been since 2007, when it reported more than $22 million in federal lobbying fees. “So we’re really coming off a strong effort,” he said. “This year, I do see a lot of renewals, and we’re very grateful.”

A major sign of the political climate will come by spring, when the country will bump up against its debt limit. In a repeat of last year, the White House says it won’t negotiate on the ceiling, while Republicans in Congress pledge to extract concessions to raise it yet again to pay bills lawmakers have already approved.

“What happens after the next debt limit debate will depend on whether we settle into a new normal or not,” said Kai Anderson, co-chairman of Cassidy and Associates and a former senior aide to Senate Majority Leader Harry Reid of Nevada. “Do we get to a position where things start to operate more predictably than they have for the last two years?”

Though the pressure will be intense on lawmakers in both chambers to focus exclusively on the upcoming elections, there may also be a counter-pressure from voters who’d like to see their elected officials working together.

“I don’t really buy into the idea that nothing happens because it’s an election year,” said Alex Vogel, a partner with Mehlman Vogel Castagnetti. Whether it’s a farm bill or the tax extenders, “some members and their constituents want to get these things done. I think there’s a new reality. Like the news cycle is 24 hours, the political cycle and the lobbying cycle are 24 hours.”

An expected new chairman at the helm of the tax-writing Senate Finance Committee in Sen. Ron Wyden, D-Ore., may create work for lobbyists seeking to get clients in front of new decision-makers. Wyden, said lobbyist Steve Elmendorf, will “look to set the table for tax reform in ’15.”

For would-be lobbyists without a book of business — and that includes members of Congress — the job market this year will remain tough, according to K Street head hunters and hiring managers.

Senior Hill staffers who are plugged in to leadership or plum committees or have expertise in top-paying sectors such as health care and financial services will command offers well into the six figures.

But average aides and rank-and-file lawmakers may struggle to find a niche in a crowded field, especially as more members opt not to seek re-election, putting themselves and their aides in the job market.

“I’ve heard from a number of members who want to weigh their options should they decide not to seek re-election,” said Ivan Adler, a K Street recruiter with the McCormick Group.

If Senate Finance Chairman Max Baucus, D-Mont., weren’t heading to China as the U.S. ambassador there, he’d command top dollar, said Julian Ha, who leads the government affairs and trade association practices for search firm Heidrick & Struggles.

“But one-term people, not on influential committees, it’s tough,” he said.

Political stalemate hasn’t helped things on K Street.

“These days, clients expect results, and it’s really hard to get results,” Ha said.

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