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October 2011, Week 3

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K Street Money Flowing Into Deficit Panel

By Alexander Bolton
The Hill
October 18, 2011

http://thehill.com/homenews/news/188083-k-street-money-flowing-into-deficit-panel

Members of the deficit-reduction supercommittee have
raised hundreds of thousands of dollars from special-
interest groups, including a significant chunk from
healthcare interests that want the panel to fail.

Healthcare political action committees gave more to the
deficit panel members than political action committees
(PACs) representing energy, defense and agriculture
interests, which could also be under the knife,
according to fundraising reports filed with the Federal
Election Commission (FEC).

Rep. James Clyburn (S.C.), the third-ranking member of
the House Democratic leadership, does not sit on any
regular committees with jurisdiction over the health
industry, but has raised more than $57,000 from
healthcare-related PACs since his appointment to the
debt supercommittee.

Some of his contributions come from interests that want
to minimize cuts to Medicare and Medicaid, such as the
American Hospital Association, HealthSouth Corp.,
DaVita Inc. - which provides kidney dialysis treatment
- and HCR Manor Care, which specializes in assisted-
living care.

Other supercommittee members on both sides of the aisle
have won contributions from healthcare interests since
being named to the panel.

Hospitals, medical-device manufacturers and home-care
experts in general would prefer that the supercommittee
fail to reach a deal, say lobbyists familiar with the
health industry's strategy toward the panel.

An impasse would trigger $1.2 trillion in automatic
cuts to defense and non-defense programs, including a 2
percent cut to Medicare, but these healthcare groups
believe this would result in smaller cuts than a deal.

A handful of healthcare interests, however, do want a
deal, and they have also given contributions to some
supercommittee members.

Doctors groups, for example, want a permanent fix to
the scheduled cuts in payments they receive from
Medicare. In every new Congress, doctors' groups spend
vast sums of money on lobbying and campaign
contributions to influence lawmakers to postpone the
cuts.

They hope the supercommittee will find a permanent fix
and have given generously to its members.

Rep. Fred Upton (Mich.) received PAC contributions from
the American Association of Orthopaedic Surgeons, the
American Academy of Otolaryngology, the American
Academy of Physician Assistants and the American
Chiropractic Association in the weeks after he was
named one of three House Republicans on the 12-member
committee on Aug. 10.

Since then, Upton has raised more than $180,000 from
PACs, according to a fundraising report he filed
Saturday with the FEC. That includes nearly $70,000
from healthcare-industry PACs.

While the contributions might help ingratiate these
interests with the committee, their gifts make up only
one of many factors that will influence whether a deal
is forged.

"The stakes are high for anybody that is part of the
federal budget, and healthcare is an enormous part of
the federal budget," said Steve Elmendorf, a principal
at the lobbying firm Elmendorf Ryan. "The reality is
there are a lot of stakeholders that have a lot at
play, and healthcare is one of them."

Elmendorf said companies are "going to make decisions
based purely on the numbers" and could decide the
automatic cuts, known as sequestration, would be better
for business than a deficit-reduction deal.

But he questioned whether outside groups would have
much influence on the secretive negotiations.

"The 12 members begin with the predisposition that
they're going to get a deal. They're legislators. I
think the ability of outside groups to influence a deal
or no deal is pretty minimal."

Rep. Jeb Hensarling (R-Texas), another member of the
supercommittee, has raised more than $130,000 from
special-interest PACs since being named the panel's co-
chairman on Aug. 10.

Nearly $20,000 of that total came from healthcare PACs
while at least $6,000 came from energy-industry PACs
and at least $2,000 came from defense-related companies
- Raytheon and General Electric.

Rep. Dave Camp (Mich.), the third House Republican on
the supercommittee, raised $705,000 in total
contributions in the third quarter of 2011, including
more than $475,000 after Aug. 10.

Healthcare companies and lobbyists hired to represent
them gave Camp's personal reelection fund at least
$55,000 since his appointment, according to fundraising
data filed with the FEC.

He received $5,000 contributions from the Ambulatory
Surgery Center Association's political action
committee, the American Association of Orthopaedic
Surgeons' PAC and the American Society of Plastic
Surgeons.

Rep. Xavier Becerra (D-Calif.) has received $30,000
from healthcare-related PACs since he joined the
supercommittee, including $1,000 from General Electric,
which could lose business if defense spending receives
deep cuts.

Rep. Chris Van Hollen (D-Md.) has raised $21,000 from
healthcare PACs and $39,000 from other PACs since
joining the supercommittee.

Sen. Pat Toomey (R-Pa.) has raised more than $80,000 in
PAC contributions since early August. He collected
$17,000 from healthcare PACs.

Sen. Max Baucus (D-Mont.) has collected over $41,000
from healthcare PACs since joining the supercommittee.
That amount exceeded the $32,000 he raised from all
other industry PACs combined since Aug. 10.

Good-government watchdog groups have called on
lawmakers to suspend all fundraising activity while
serving on the supercommittee, but, so far, only Sen.
John Kerry (D-Mass.) has agreed to a moratorium. He
raised only $25,575 in the third quarter of 2011.

Other members appear to have restrained their
fundraising activity in response to the criticism.
Clyburn, Becerra, Upton, Baucus and Toomey raised less
through their personal campaign accounts in the third
quarter than in the second.

Only Hensarling and Van Hollen raised more in the third
quarter than in the first or second quarters.

The latest campaign fundraising reports for the
remaining members of the panel, Sens. Patty Murray (D-
Wash.), Rob Portman (R-Ohio) and Jon Kyl (R-Ariz.),
were not available at press time.

- Peter Sullivan and Mario Trujillo contributed to this
report.

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