10-23-1999

LOBBYING: Another Stab at the Death Tax

An opportunity like this one doesn't come often for a lobbyist. On Oct. 7,
John J. Motley III, the Food Marketing Institute's top lobbyist, was
seated next to Senate Majority Leader Trent Lott of Mississippi at a
fund-raising luncheon for the National Republican Senatorial
Committee.


Motley, who had just raised approximately $280,000 for the NRSC, took
advantage of the situation to press Lott on estate taxes, an issue
important to food association members who have plenty of capital in their
grocery chains or stores. Motley's pitch worked. Lott told Motley that he
would support a provision to roll back estate taxes in legislation that
would raise the minimum wage.


The odds are heavily against enactment of estate-tax relief this year, but
given the intensity of the lobbying effort, rumors that the issue is dead
in Congress seem premature.


After intense lobbying by an FMI-led coalition, the House is likely to
consider minimum-wage legislation that also provides for significant
reductions in the estate tax. The coalition Americans Against Unfair
Family Taxation has also been pressuring Texas Republican Gov. George W.
Bush to make the estate tax a key issue in his presidential campaign. Bush
supports eliminating this tax and said so during his first campaign visit
to Iowa in July. Farmers are among the strongest opponents of estate
taxes. "We have a two-track strategy here," Motley said.
"If we can get something now, let's get it as a down payment, and
then go for complete repeal after the next election."


The coalition includes business groups with robust grass-roots operations,
such as the National Beer Wholesalers Association and the Grocery
Manufacturers Association of America. It intends to raise $6 million and
has already banked $1 million. The coalition is turning up the heat for
2000 by taking advantage of its contacts in the Bush campaign. Food
Marketing Institute President Timothy M. Hammonds, who has raised more
than $100,000 for the Bush effort, has emphasized the importance of
estate-tax repeal during discussions with top Bush advisers.


Historically, the estate-tax issue has been heavily lobbied by another
group, the Family Business Estate Tax Coalition, which boasts some 80
trade groups, including the powerful National Federation of Independent
Business. Meanwhile, lobbying for estate-tax relief has had some success
in the states. Since 1980, 20 states have enacted legislation that
eliminates state inheritance taxes. However, liberal Democrats have long
opposed getting rid of inheritance taxes.


The new coalition, which was formed in June, began its lobbying blitz in
the House last month after Assistant Majority Leader Rick Lazio, R-N.Y.,
and John M. Shimkus, R-Ill., announced plans to produce a bipartisan
minimum-wage package that would include some sweeteners for the business
community. The coalition leaders spent several weeks promoting a smaller
version of estate-tax relief that was in the $792 billion tax cut package
vetoed by President Clinton. House Ways and Means Committee Chairman Bill
Archer of Texas had supported estate-tax provisions.


The lobbyists contacted moderate House Democrats such as Gary Condit,
D-Calif., and sympathetic Republicans such as Lazio and Shimkus. Motley
met with Majority Leader Dick Armey of Texas, and David K. Rehr of the
beer wholesalers discussed the issue with Speaker J. Dennis Hastert of
Illinois and Majority Whip Tom DeLay of Texas. The coalition delivered a
simple message: The estate-tax rollback is a winner if the leadership can
bring it to the House floor.


Meanwhile, Tricon Global Restaurants, the giant chain of fast-food
franchises that includes KFC, Pizza Hut, and Taco Bell, also provided
lobbying muscle. In late September, several owners of Taco Bell
franchises, including Charles Nalen of Alabama, a co-chairman of the
coalition, met with key House members and wooed several key moderates,
including Bud Cramer Jr., D-Ala. Tricon has retained Fierce and Isakowitz,
a GOP shop, and Murray, Scheer & Montgomery, a Democratic-leaning
shop, to lobby on the issue in Washington.


Meanwhile, the coalition also tapped Shandwick Public Affairs Co. to mount
a grass-roots campaign aimed at community leaders and designed to
encourage people to write to members of Congress. Shandwick has focused on
about 30 House and Senate members.


On Oct. 14, Lazio and Shimkus introduced a minimum-wage bill, co-sponsored
by three Republicans and four Democrats, that would reduce the top rate on
estate taxes from 60 percent to 48 percent over five years and would
provide roughly $16.3 billion in estate-tax relief, according to a study
by the House Small Business Committee.


On Oct. 19, a few dozen GOP moderates raised concerns with the leadership
about part of the new minimum-wage bill, but not with the estate-tax
provisions. The GOP leadership and Archer are determined to include
estate-tax relief in any minimum-wage bill. House leadership aides and
coalition lobbyists predict that a version of the Lazio-Shimkus
bill--probably after the Ways and Means Committee makes some changes in
it--will be the basis for the estate-tax bill that reaches the House
floor.


The coalition is now trying to round up the five to 10 Democratic votes
needed to compensate for the expected GOP defectors.


Meanwhile, the coalition has also lobbied the Senate. Hammonds and Motley
have discussed the issue with Majority Whip Don Nickles, R-Okla. On Oct.
14, Rehr visited Lott, accompanied by a beer distributor from Mississippi
who knows the Majority Leader.


But the coalition isn't relying solely on Congress. Coalition leaders cite
a recent poll their group commissioned, which indicates that 76 percent of
Americans favor doing away with the estate tax. According to coalition
leaders, the issue will have traction in the presidential campaign,
perhaps even for Democratic contenders Bill Bradley and Vice President Al
Gore.


Still, coalition leaders have focused on the Bush campaign. Besides
Hammonds, several beer distributors in Texas have raised the issue with
top Bush aides. Other trade groups in the coalition, such as the National
Association of Broadcasters, also have strong ties to the Bush campaign.
The coalition has hired the American Continental Group for strategic
advice. Two of the lobbying firm's partners--David A. Metzner and Peter
Terpeluk Jr.--have each raised more than $100,000 for Bush.


Shandwick has already produced one television and one radio spot that have
aired in Iowa and New Hampshire. Shandwick plans to produce at least two
more TV and two more radio spots. The coalition is betting that publicity
on the issue next year will raise millions of dollars for its
cause.


Peter H. Stone

National Journal