The Big Money

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Over the next few days, one of the things I’m going to be doing is mapping out what I expect to be some of the big stories over the coming year. Some are obvious (new president); others there will be no predicting. But one in a middle category we’re going to be following closely is the rewiring of K Street. Of particular note is a topic the Washington Post dug into over weekend: the way that the K Street firms (and the larger DC service economy) are digging in to get a slice of the $700 billion bank bailout.

The big bucks, of course, will go to financial services companies. But just who gets the big bucks and on what terms? That’s where K Street comes in. Everyone on Wall Street is going to want to make their case and that means hiring people with access to help make the case — to the folks in the Treasury, the Congress and myriad people in the regulatory agencies.

We’ll be watching closely.

But the angling for the bailout money is only one part of the story. For more than a decade and especially from 2000 to 2006, Washington was totally wired for access to the GOP. No surprise. That’s where the power was. If you wanted influence in DC, you weren’t going to waste your money on Dems since they didn’t have any. It was even more so, since with the Tom DeLay/Grover Norquist ‘K Street Project’, the Republicans were far more systematic than anyone had previously been in forcing trade organizations and lobbying shops to hire Republicans. It became a big question just who was coopting who.

Now, at least for the next two years, the Democrats have more power in their hands than the Republicans did at any point between 1994 and 2008. And yet many of the big trade orgs and all the similar places are staffed with people who were put there to access the GOP. Some of that had already begun to change after 2006. But it will start changing with a vengeance now — not just because Democratic dominance is secured for at least two years but because so much is now on the table.

Two other points to consider.

One characteristic of K Street under Republican rule was that the interests with the most money were, as a general matter, in sync with the people they were trying to influence. Oil companies, Phrma, the Business Roundtable, etc. They all wanted things that — by and large — Republicans were ideologically inclined to give them. Democrats get a lot of money from the same people. But there is at least much more tension with the Democrats, though how much will be the big question. It also means that Republicans will likely never get shut out the way Democrats did because even if they lack power they still share interests.

The other point is that it’s not just the lobby shops and trade organizations. There’s also ‘deep lobbying’. Who runs the think tanks? Who’s giving them the biggest grants? What are they studying? There will be plenty of shady deals to go around. But it’s not just the shady deals. It’s the big picture. The rewiring of the whole town. Like I said, we’ll be playing close attention.

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