Associations dropped $40 million on outside spending, but will gridlock continue?

Austin

French

Scott

Business got the Republican Senate majority it paid for in the Nov. 4 elections, but that doesn't guarantee its agenda will move forward as neither President Barack Obama nor potentially emboldened Tea Party lawmakers may be inclined to compromise.

At least 20 trade and professional associations made more than $40 million in independent expenditures during the general election supporting or opposing candidates, the bulk for the benefit of the GOP, according to a CEO Update analysis of data from the Federal Election Commission.

The total amount of money that associations spent influencing the elections is much higher since many things—including nonpartisan voter guides and get-out-the-vote efforts and dark money contributions—are not required to be reported.

The National Federation of Independent Business, one of the most partisan trade associations, scored a 92 percent success rate with its $1.4 million of independent expenditures in select races, according to watchdog group the Sunlight Foundation.

"We were a bit surprised at how much of a sweep there was," Amanda Austin, the group's vice president of federal public policy, told CEO Update. Austin doesn't expect the new Senate to pass—nor Obama to sign—an Affordable Care Act repeal, but business-backed changes to provisions like the employer mandate are possible, she said.

Groups including NFIB and the U.S. Chamber of Commerce (the biggest association spender at $22 million) concentrated their independent expenditures in key Senate races, supporting among a few others Thom Tillis in North Carolina—the most expensive election in the country this year—Joni Ernst in Iowa and Cory Gardner in Colorado.

The Chamber's success rate of 81 percent was held down by its heavy support of losing Republican Scott Brown in New Hampshire—nearly all of the $2.7 million spent in favor of Brown or against his opponent, Sen. Jeanne Shaheen, came from the Chamber. He was the group's second-biggest beneficiary, behind Tillis, who had $4.9 million spent on his behalf.

The Chamber looked brilliant in 2010 when it backed an earlier Republican tide that resulted in control of the House of Representatives, but got little for its multimillion-dollar efforts in 2012, when the GOP lost eight House seats and some winnable Senate races due to poor candidates. In the 2014 cycle, the Chamber and other groups got much more involved in primaries to select business-friendly, electable candidates. (The Chamber made $20 million in independent expenditures during the primaries.)

The American Chemistry Council—headed by former Democratic congressman Cal Dooley—notched a success rate of 100 percent by devoting nearly all of its $2.6 million in resources to a small group of candidates late in the campaign, all Republicans, including: Ernst, David Perdue in Georgia and Mike Rounds in South Dakota.

Other major GOP beneficiaries of association spending included Sen. Mitch McConnell (R-Ky.), the incoming Senate Majority Leader, and Sen. Pat Roberts in Kansas.

Sen. Mark Begich (D-Alaska) was helped by $1.4 million in association money, nearly all from the National Association of Realtors, while his Republican opponent Dan Sullivan, had $2.1 million spent for him, nearly all by the Chamber. The Associatied Press called the race for Sullivan on Nov. 12, but Begich had not conceded by Nov. 14.

Louisiana dilemma

NFIB was the only association to spend significantly on Republican Bill Cassidy in Louisiana, where it dropped $142,000 (representing substantially all of the association expenditures benefiting Cassidy). Members of many groups are split between Cassidy and his energy-industry friendly Democratic opponent, Sen. Mary Landrieu.

Now that Republican control of the Senate is assured for at least two years, it remains to be seen whether business groups support Landrieu in the Dec. 6 run-off election against Cassidy, or at least don't oppose her. If Landrieu loses, Sen. Maria Cantwell (D-Wash.)—not considered a friend of the oil and gas industry—becomes ranking member on the Senate Energy and Natural Resources Committee.

Marty Durbin, CEO of America's Natural Gas Alliance, and Louis Finkel, who replaced Durbin as executive vice president of government relations at the American Petroleum Institute, made individual donations to Landrieu. Both are Democrats.

Some big-spending associations were big losers during the election. The American Association for Justice, which represents trial lawyers, donated $925,000 to the Democratic Senate Majority PAC in vain, while the group's arch-nemesis, the Chamber, basks in victory.

Some medical societies got aggressive in supporting House candidates—particularly fellow health care professionals—with mixed success. In the two weeks before the election, the American Association of Orthopaedic Surgeons spent nearly $400,000 to tout nine incumbents. Seven won, including Republican physicians Dan Benishek of Michigan and Joe Heck of Nevada, and Democrat Lois Capps of California, a nurse. The AAOS-backed losers included Dan Maffei (D-N.Y.), a supporter of overhauling the Medicare physician payment system.

About a dozen doctors' groups paid for efforts supporting physician Ami Bera (D-Calif.), an incumbent in one of the most expensive House races in the country at $20 million. His contest with Republican Doug Ose was still too close to call on Nov. 14.

Tax overhaul ‘teed up'

Association lobbyists say they are cautiously optimistic that Washington gridlock will ease as a result of the GOP takeover, but political analysts are more pessimistic.

"We're headed for another two years at loggerheads," Stuart Rothenberg, editor and publisher of The Rothenberg Political Report, told association executives at a Leading Authorities breakfast held at U.S. Chamber of Commerce headquarters. (Leading Authorities is the parent company of CEO Update.)

Rothenberg noted that Tea Party candidates bested moderates in some races.

At the same event, Charlie Cook, editor and publisher of The Cook Political Report, said Obama will stick to his guns and not pivot toward the center to get things done the way former President Bill Clinton did after the Republican wave election in 1994.

"I don't think the president is going to be relevant the next two years," Cook said.

But NFIB's Austin said an overhaul of the tax code is in sight.

"Tax reform is at least teed up nicely," she said, noting that her members are more interested in lowering individual rates than corporate rates. "The president signaled some interest in that, and we're going to put some weight behind it."

National Retail Federation Senior Vice President for Government Relations David French said he sees opportunities for corporate tax overhaul, free trade agreements, transportation spending and patent overhaul.

"One of the first measures the House and Senate will put forward is Trade Promotion Authority," he said. "It's going to be crucial to have that in place in order to conclude these pending negotiations." New trade pacts with Asia and Europe are in the works.

At the same time, NRF says prospects for passing legislation on swipe fees have dimmed, and a spokesman for House Speaker John Boehner (R-Ohio) reiterated the Speaker's opposition to another NRF priority on Nov. 10 when he told Roll Call an Internet sales tax bill "won't move forward this year."

But French was most enthusiastic about McConnell's vow to return the Senate to "regular order," which will allow more legislation to move, more amendments to be introduced, and help avoid fiscal cliffs and shutdowns that sap consumer confidence.

Many observers, including Rothenberg and JC Scott, senior executive vice president of government affairs at AdvaMed, see the ACA's medical device tax as ripe for repeal.

Scott said AdvaMed is "cautiously optimistic" given that the device tax repeal has bipartisan support. Even though the tax is a provision of Obama's health care overhaul, Scott said the president might be flexible.

"The president doesn't appear wedded to the policy," he said. "There's no fundamental health care policy attached to the tax."

Though the president still controls federal agencies such as the Environmental Protection Agency, CEOs like Dick Doyle of the Vinyl Institute say Senate oversight powers will be a powerful tool against what they see as excessive regulations like EPA's PVC Maximum Achievable Control Technology rule governing his members' factory emissions.

Doyle, Scott and other association executives, such as Tom Dobbins, CEO of the American Composite Manufacturers Association —mainly want Congress to function again. Dobbins sees hopes brightened for a highway bill, but clouded for wind power production tax credits.

"We just want a Congress that will get things done, and compromise," he said.