05-20-2000

LOBBYING: Highway Robbery

For some Republican lawmakers, cutting fuel taxes looked like a
no-brainer. In March, gas and diesel prices had soared to their highest
level in years. Outraged truckers had driven their rigs to Washington to
vent their anger during a rally on the Mall. Slash the taxes, and Capitol
Hill Republicans could brag about their accomplishment in the November
election, GOP strategists argued. Tax reduction would also put Al Gore,
the presumptive Democratic nominee for President, on the defensive. In
1993, Vice President Gore cast the tie-breaking vote in the Senate in
favor of the 4.3-cent-per-gallon gasoline tax increase.


But Washington's powerful highway lobby and congressional allies, such as
House Transportation and Infrastructure Committee Chairman Bud Shuster,
R-Pa., dashed the tax cutters' dreams. Led by the American Road &
Transportation Builders Association and the Associated General Contractors
of America, the highway lobby maintained that repeal of the gas tax would
gut the 1998 Transportation Equity Act for the 21st Century, the landmark
$218 billion highway bill. The law requires that all the money in the
Highway Trust Fund, which comes from the fuel taxes, be spent only to
build or to repair the nation's highways. Because of the law, a reduction
in the gas tax would mean less money for road-building.


The two trade groups swung into action. They wrote to lawmakers, rallied
their troops, mobilized coalitions, spent big bucks on print
advertisements, and lobbied key members of Congress. The intense,
high-profile campaign worked.


"It was a carpet bombing," said Stephen Moore, an economist at
the Cato Institute, a libertarian think tank, who advocates repeal of the
gas tax. "Within 24 hours, it seemed that our whole effort had been
decimated."


In fact, the road builders' blitzkrieg is a case study in how Washington
trade associations are able to mobilize their forces to defeat popular
initiatives that would harm their members.


On Feb. 24, two days after the truckers came to Washington, Sen. Ben
Nighthorse Campbell, R-Colo., introduced legislation that would impose a
one-year moratorium on the 24.4-cent-per-gallon tax on diesel fuel. The
ARTBA responded the same day, quickly turning the legislative battle into
a numbers game designed to sway lawmakers' opinions. The association
released a chart showing that repeal of the diesel tax would cost the
states $8 billion a year in federal highway money. More important, the
chart revealed how much each state would lose if the tax were
repealed.


In March, House Republicans introduced legislation that would repeal the
4.3-cent-per-gallon tax. Meanwhile, Senate Majority Leader Trent Lott,
R-Miss., sponsored the most important bill. Introduced on March 23, the
Lott proposal would suspend the 4.3-cent tax until Jan. 1. If the price of
gas reached $2 per gallon, however, Lott's bill would kill the entire
18.4-cent-per-gallon tax. His measure would use some of the budget surplus
to replace any trust fund money lost because of a fuel tax cut.


But the road builders wouldn't budge. The tax cut would not be passed down
to consumers, they contended. Tapping the surplus to replenish the Highway
Trust Fund would make it less likely that Congress would have the money to
pass other tax cuts, the groups added. Most important, the groups said
that cuts in the gas tax would sever the link established in the 1998
transportation bill between gas tax revenues and highway projects. The
trade groups bombarded Capitol Hill with letters stating their opposition
to the bill and mobilized their grass-roots forces. The ARTBA and the AGC
issued bulletins commanding their members to contact lawmakers. Using a
toll-free hot line, ARTBA members flooded Capitol Hill with almost 4,000
phone calls between February and April, the group said. "Grass-roots
communication is the clincher. That's how you close the sale," said
ARTBA President T. Peter Ruane. Members of Congress, he added, "want
to hear from their constituents back home. In this case, they heard loud
and clear."


Peter Loughlin, the AGC's director of congressional relations for
construction, said that his group relied on the same tactics. "This
is as large a response as I've seen on a single issue."


Besides the grass-roots campaign, the ARTBA and the AGC activated their
coalition group, the Transportation Construction Coalition, which includes
more than 20 trade associations, such as the American Concrete Pavement
Association and the Laborers' International Union of North America. They
also worked with the American Highway Users Alliance and the American
Automobile Association, which has 42 million members. Getting the
association on board was important, the road builders said, because it
demonstrated that the coalition included consumers as well as businesses
and contractors whose businesses would suffer from a tax cut.


Members of the ARTBA and the AGC also visited Capitol Hill to lobby
undecided Senators against Lott's bill. They stressed that the Majority
Leader's legislation would save motorists just $20 a year (or roughly 40
cents a week), while states could potentially lose nearly $20 billion in
2002 and 2003.


They also ran advertisements in Congressional Quarterly's Daily Monitor,
National Journal's CongressDaily, Roll Call, and The Weekly Standard. One
AGC ad displayed a map of the United States that showed how much money
each state would lose if the 4.3-cent tax were repealed. "With this
idea, everyone is a loser," the ad stated. "The only question is
how much will your state lose?"


The ARTBA ran an ad contending that the gas tax cuts endangered public
safety because there would not be enough money available for road
improvements.


In the end, the road builders' efforts paid off. On April 6, the Senate
voted, 65-35, to adopt a sense-of-the-Senate budget amendment opposing the
repeal of any gas taxes. And on April 11, the Senate voted overwhelmingly
to block consideration of Lott's bill. The other tax repeal bills most
likely will never reach the House or Senate floor.


To be sure, the transportation industry wasn't the only key player in
thwarting the tax cutters. Sens. Max Baucus, D-Mont., Christopher S. Bond,
R-Mo., Robert C. Byrd, D-W.Va., George Voinovich, R-Ohio, and John W.
Warner, R-Va., led the fight in the Senate to defeat Lott's proposal.
Shuster-arguably the key architect of the 1998 transportation bill-ensured
that proposals to cut the gas tax went nowhere in the House.


Still, observers give the road builders much of the credit. "The
lobbyists were crucial," explained Dawn Levy, a minority senior
professional staffer for Baucus on the Senate Environment and Public Works
Committee. "The main thing they have behind them are their
members-who are my boss's constituents."


But some gas tax opponents have complained about the highway groups'
aggressive lobbying campaign. "I think the road builders have burned
a lot of bridges," said Pete Sepp, a spokesman for the National
Taxpayers Union, a longtime opponent of the gas tax. "To express
concerns about replacing trust fund monies is one thing, but to put out
bogus studies that claim that cutting taxes will kill people and cost jobs
is quite another," he added. It was a "reprehensible tactic that
we would only expect from left-wing bomb throwers."


Moore, of the Cato Institute, complains that the road builders are just
another industry feeding at the federal trough. "This is a case study
in how the corporate welfare lobby can squelch even the best of
ideas," he said.


Unmoved by such criticisms, the road builders are happy with the victory.
"The highway industry further established a reputation as a real
presence," the AGC's Loughlin said. "I think that's important
for when future votes come up again."


Indeed, with so much money at stake, Ruane said that his group stands
ready to redeploy its forces if the money in the highway trust fund is
threatened again. "In my opinion, it's not over. And we anticipate
that there'll be other attempts in the future to try to chip away" at
the 1998 transportation law, he added.


Mark Murray

National Journal