This article is part of TPM Cafe, TPM’s home for opinion and news analysis.
COVID-19 relief negotiations have completely stalled in the Senate, as Republicans remain hellbent on protecting corporations at the expense of the American people and undermining democracy by blocking funding for the Postal Service and election administration. Indeed, the bill they are using as a baseline, the HEALS Act, reveals much about their core priorities and even more about why Democrats should be relentless in their opposition. The omnibus contains measures to implement radical liability protections for businesses, while simultaneously decreasing unemployment benefits as millions are on the brink of financial ruin.
But buried in a portion of the legislation introduced by Sens. Marco Rubio (R-FL) and Susan Collins (R-ME) is another major poison pill that should make Americans across the country even angrier: a bailout for lobbying groups.
The “Continuing Small Business Recovery and Paycheck Protection Program Act’’ would extend eligibility for the Payment Protection Program — the forgivable loan program for small businesses created by Congress in a previous COVID-19 relief bill — to 501(c)(6) trade associations with 300 or fewer employees. The Democratic Policy Center, an organization I co-founded, determined that 99.8 percent of 501(c)(6) organizations meet that threshold.
Trade associations sound innocuous but the term obscures what they really are: lobbying groups that advocate for policies that benefit specific business interests. Among the groups that could potentially qualify for loans under Collins’ and Rubio’s bill are PhRMA, the nation’s top drug lobby, and the American Chemistry Council, which represents big chemical and fossil fuel interests.
The Collins-Rubio legislation does limit PPP eligibility to groups that spend less than 10 percent of their activities on lobbying, which would prevent some otherwise-qualifying lobbying groups from collecting federal money. However, the American Society for Association Executives — a lobbying group for lobbying groups — is pushing hard to remove this provision. And there is reason to believe they could be successful. ASAE already shaped the bill through its advocacy efforts. Originally the Collins-Rubio bill capped loans at $500,000 and had the employee threshold at 50 or fewer employees, but these restrictions were quietly tweaked right before the bill’s official introduction.
(Interestingly, Rubio has authored an amendment to the bill that would further limit which groups could qualify. It would lower the employee threshold to 150 or fewer and expand the definition of lobbying activities to be significantly more encompassing. That said, it is unclear whether this amendment has actually been filed, or, if not, whether the senator intends to do so. Rubio’s office did not respond to TPM’s requests for comment.)
Americans are in broad agreement that lobbying groups should not be bailed out. A poll conducted by Data For Progress for The Democratic Policy Center revealed that 70 percent of Americans do not think it’s important for Congress to provide relief funds to lobbying groups. Nearly 90 percent of Americans, on the other hand, believe it is important to provide relief funds directly to families and individuals.
Republicans should be lambasted for supporting the as-introduced Collins-Rubio bill. But make no mistake: Both parties have been working to bail out lobbying groups.
A supercharged lobbying group bailout provision was included in the Democrats’ HEROES Act. The bill, passed in May, would extend PPP loan eligibility to all nonprofits (except politically active dark money groups), and it would reserve 25 percent of all remaining PPP funds for nonprofits. It would further set aside half of that portion for “small nonprofits” with 500 employees or less.
An astonishing 99.9 percent of trade groups could qualify for this “small nonprofit” fund, including some of the most powerful lobbying interests in Washington. Even the U.S. Chamber of Commerce — the nation’s biggest business lobby, which is currently leading the charge for businesses to be shielded from COVID-related lawsuits — would be considered a “small nonprofit.”
Many Congressional Democrats have also been leading the pro-lobbying group charge by co-sponsoring H.R. 6697. Under this bill, which is very similar to the Collins-Rubio bill, any 501(c)(6) with 300 or fewer employees could be eligible for PPP loans. H.R. 6697 has 127 sponsors, including prominent Democrats like Reps. Joe Kennedy (MA), Carolyn Maloney (NY) and Cheri Bustos (IL).
Both the HEROES Act and H.R. 6697 expressly bar PPP loans from covering the compensation of registered lobbyists. But that doesn’t mean much, since big D.C. lobbying groups exist to influence public policy. An influx of public money would only serve to free up resources for lobbyists, advocacy and TV ads. There are also major questions about why trade associations representing already-bailed out corporations need extra money.
It remains unclear which version of the lobbying group bailout, if any, will emerge from the Senate when the chamber returns from adjournment. Multiple senators have offered competing bills. One that is gaining traction is a broader bill called the RESTART Act, which would allow trade groups to qualify for partially forgivable loans. The legislation would again treat lobbying groups with 500 or fewer employees as “small nonprofits.” The bill has been endorsed by powerful lobbying groups like the U.S. Chamber, the Business Roundtable, and the National Restaurant Association.
Senate Majority Leader Mitch McConnell (R-KY) began his press conference announcing the HEALS Act with some casual gaslighting — explaining how his colleagues tried to be as circumspect as possible with any additional spending.
“Senate Republicans and the Administration have been consulting over the last few weeks to come up with a realistic proposal, with what we think is an appropriate amount of additional debt to be added to the economy at this time,” McConnell explained. “We think it is about a trillion dollars and we allocated it in a way that we think makes the most sense for the country at this particular time.”
When millions of Americans have lost their jobs and are facing evictions, it’s inappropriate and completely disturbing that Congress would think it’s the right time to bail out corporate lobbying groups.
Adam Eichen is the Campaigns Manager for Equal Citizens and the co-founder of the Democratic Policy Center. He is also the co-author of Daring Democracy: Igniting Power, Meaning, and Connection for the America We Want.