Government Affairs Brief

May 2010

In this issue:

• Between Public Opinion and Political Will
• Tea Party Politics
• A Midterm Shakeup … Again
• Climate Legislation Introduced in the U.S. Senate
• Book by Tom Mullikin Wins 2010 National Indie Excellence Award for Business 

Between Public Opinion and Political Will

By Pauly Rodney

On March 30th, the Administration proposed opening up new areas along the coastline of the United States for offshore drilling. While protecting many politically sensitive areas such as the coastline from New Jersey northward, and parts of the Pacific coast and Alaskan coast, the President’s proposal meant ending the nearly 40-year moratorium on oil exploration on the East Coast from Delaware to Central Florida - approximately 167 million acres. No less than Speaker Nancy Pelosi herself – once a fierce critic of offshore drilling – had used a weekly address to tout the economic benefits states would receive from the sale of private leases for drilling.

This victory for oil exploration was the culmination of several years of public opinion in favor of the industry. Rasmussen polling shows public support for offshore drilling steadily increasing over the years – from more than 50% of Americans supporting drilling in 2008 to 72% supporting it in April, 2010. Increased gas prices, a desire for energy independence, and the images of offshore oil rigs surviving the worst winds of Hurricanes Katrina and Rita all increased public support for Big Oil.

On April 20, the Deepwater Horizon oil rig exploded off the coast of Louisiana.

Political Will Crumbles
On May 4th, California Governor Arnold Schwarzenegger publicly ended his support for offshore drilling, citing the Deepwater Horizon disaster as a turning point. “If I have a choice to make up $100 million and what I see in the Gulf of Mexico,” he said “I’d rather find another way to make up that $100 million.” One day later the spokesperson for President Obama indicated that while the President is still committed to domestic oil production, his support for opening areas to drilling may change. Within days, Florida Governor Charlie Crist called for a special legislative session to ban offshore drilling in Florida’s waters.

The political fallout was not limited to executives. Both US Senators Mark Warner and Jim Webb of Virginia – previous supporters of offshore drilling – said they agree that drilling should be delayed. South Carolina Senator Lindsay Graham said the Gulf spill “hasn’t made things easier. It’s made them harder” as he called for a time-out on comprehensive energy legislation. Even US Senators Jon Kyl (R-AZ and Senate Minority Whip) and Pat Roberts (R-KS and supporter of both offshore and ANWR drilling) backpedaled. When asked if Republicans still believe in the chant “drill, baby, drill,” Senator Roberts replied, “I don’t know about the slogan. The slogan was what, two, three years ago and basically we had a lot of opposition to it anyway.” Senator Kyl added “That was not a Senate Republican phrase. I think there was a candidate that used that.”

In their rush to jump off of what the media was calling a sinking ship, few politicians realized that the public had not turned against offshore drilling.

Public Opinion Still Strong
On May 7th a poll by the liberal blog DailyKos conceded that 60% of Americans continue to favor offshore drilling for oil and gas. After looking at individual demographic data, a majority of men, women, Republicans, independents, whites, and Latinos still supported offshore drilling. Democratic respondees indicated 49% supported offshore drilling, 47% of blacks supported it, and a majority of each age group supported it as well. When asked if the BP oil spill makes them more or less likely to support offshore drilling, not a single demographic had a majority say they are less likely to support offshore drilling. While certain states had more or less support than others, the desire for offshore drilling in comprehensive energy legislation was still strong across the nation.

With other opinion polls reflecting the same reality, several politicians who have flip-flopped on the issue have gone silent.

Understanding Why
Understanding public opinion is not as easy as media pundits make it out to be. While the media wanted to compare the BP spill to Hurricane Katrina, that example is not accurate. The devastation wrought by Hurricane Katrina was a human tragedy of historic proportions.

The BP oil spill is a catastrophe as well. However, there is no daily update of the death count; there are more daily images of the oil slick itself than there are images of people suffering and/or wildlife covered in oil. There are already potential villains – BP, Transocean, and Halliburton – so there is little incentive among Americans to “create” even more villains. And finally, those responsible for recovery in government and in private industry are successfully pushing out stories regarding their attempts to control the spill. Success is secondary to repeated trying in mass public opinion.

A better analogy to a similar disaster would be the coal mine explosion in West Virginia. In both instances, there was a loss of life followed by private and government cooperation for search and rescue. In both instances,  there are accusations of lax regulation blamed in part for leading to the disaster.  In both instances, there are reports of questionable records of maintenance and safety by the private owner and operators. However, in the instance of the coal mine disaster, as apparently here in the Gulf disaster, there is no nationwide consensus for stopping exploration itself – just for preventing individual disasters in the future.

Politicians and industry executives would be wise to pay attention.

An Opportunity
It is not unusual for politicians to respond to media reports before waiting to see what their constituents actually feel. For one thing, media reports are available – if not unavoidable – 24 hours a day,  and polling every issue is both expensive and time consuming. Secondly, a constant barrage of negative media may end up shaping public opinion. But if politicians are paying attention to the media, then the role of grassroots and grasstops advocacy is to make politicians responsive to their constituents. In this instance, the chasm between public opinion and political will is very real, and very large. That space in between is where there is an opportunity for advocacy. Whether through lobbying or direct outreach to constituents, politicians must be reminded that the reality in America is not always what they see and hear in the media.

Even the most left-leaning liberal blog concedes that the public still supports offshore drilling. There is a great opportunity for issue advocacy team specialists to communicate and reinforce that reality to the key politicians who decide our energy future. Challenges are now arising, as oil has started to make landfall. However, being in front of bad news is always better than being in back of it.

Tea Party Politics

By Andrew Smith

On the morning of April 9, 2010 a bus stamped with the title “Tea Party Express III” pulled into Escanaba, Michigan, a small town situated on the southern stretch of Michigan’s Upper Peninsula. Within a few hours and just 70 miles to the north, Congressman Bart Stupak (D-MI) would address a small gathering of supporters at Northern Michigan University and declare his intention not to seek re-election for Michigan’s 1st Congressional district. No doubt a coincidence, but for many in the tea party movement, Rep. Stupak’s announcement was a bittersweet victory. Only three weeks prior, President Obama, Speaker Pelosi, House Majority Whip Jim Clyburn and a bevy of key White House officials successfully persuaded Rep. Stupak to abandon his objections to the health care bill on the grounds that it did not expressly forbid taxpayer-funded abortions.

In the 12 months leading up to Stupak’s vote and the subsequent passage of the bill, the most vocal opponents of comprehensive health care reform honed their organizational skills on blogs, social networks and at rallies and town halls in every corner of the country. Originally composed of independent and often fractured local and regional organizations upset with increasing taxes, the tea party proved to be the preferred outlet for many of these Americans opposed to the Democrats’ agenda and disappointed by the Republicans’ reactions to it. In 2009 the tea party asserted itself as the uniting force of an electorate concerned with skyrocketing unemployment, an exploding national debt and big government bailouts of Wall Street and the domestic auto industry. However the single issue that held these like-minded individuals together en masse for so long was the health care bill. While business and trade groups such as the U.S. Chamber of Commerce and America’s Health Insurance Plans (AHIP) mounted expensive, full-scale, campaign-style offensives against the reform package, coordinated opposition to the bill became synonymous with the efforts of the rag-tag and underfunded groups who named themselves after Revolutionary heroes upset with government intrusion and “taxation without representation.”

The tea party movement’s localized organizational capabilities have received coveted attention from political operatives on both sides of the aisle, but the flexibility and autonomy inherent in local political organization have proven to be the hardest obstacles to overcome for a group that continues to struggle with its own messaging, leadership and direction as it wades into the first election cycle since its inception. The initial results from a mixed bag of primaries have left many in both parties questioning how much influence the tea party will manage to transfer to critical races across the country in the coming months and into November.

In the Texas Republican primary, one of the first statewide primaries held this year, incumbent Governor Rick Perry, although increasingly discussed as a potential Presidential contender in 2012, secured only 51% of primary voters after fending off a challenge from U.S. Senator Kay Bailey Hutchison (30%) and a third candidate running to his right, Debra Medina, who managed to pull nearly 20% or 275,000 voters to her campaign after cozying up to tea party enthusiasts. This race may have been an outlier, but given Medina’s severe lack of political and public service experience (she was a county GOP chair and ran a medical billing company prior to entering the race), the influence of the tea party and its favored candidates have proven they have the capacity to change the game in a large and multifaceted state like Texas.

In a smaller, more conservative, but perhaps more politically fractured state, Republicans in Utah ousted a sitting 3rd-term Senator, Bob Bennett, in favor of two relatively unknown “constitutional” conservatives (a.k.a. tea partiers) who both are now being forced to walk a fine line in order to recapture the state’s party establishment. Utah is indeed an outlier, but the ability of the tea party candidates to unseat a 3rd-term incumbent is a powerful example of the tea party’s influence on the 2010 election.

Kentucky’s senate Republican primary held on May 18th was unquestionably the most powerful show of force for the tea party at the ballot box to date. Dr. Rand Paul, son of former Presidential candidate and current Congressman Ron Paul (R-TX), easily defeated Trey Grayson, the Kentucky Secretary of State, while running as a proud and active tea partier in a solidly red state. Paul’s ability to raise money and mobilize the disaffected but still energetic members of the Republican base is a model, which if properly replicated, could provide the tea party with a handful of additional primary victories before November.

Results from other states that have since held primaries prove inconclusive for the tea party’s future at the ballot box. A few tea party-endorsed and -styled candidates produced little to moderate success at stirring up Congressional races in Ohio and Indiana but come November all eyes will be on Florida. Former speaker of the Florida State House of Representatives, Marco Rubio, the ex-officio tea party chairman, will be squaring off with Governor Charlie Crist for the U.S. Senate seat vacated by Republican Senator Mel Martinez. Rubio has siphoned enough moderate Republicans into his corner to drive Governor Crist out of the primary and delay the contest until the general election. (Crist declared as an independent in late April).

The protracted debate over the health care bill allowed the tea party to evolve into an unwieldy political force to be reckoned with,  but their staying power is yet to be determined. A handful of races in the coming months may provide the political winds needed to transform a short lived sprint into a transformational movement.

A Midterm Shakeup...Again

By Matthew French

Just weeks into the 2010 midterm election cycle, the six-month earthquake that is shaking the political establishment is already in full swing. Incumbents and political favorites in Pennsylvania, Kentucky, West Virginia and Utah are waking up with a collective hangover.

The short-term memory of the media, however, would have people believe that this type of upheaval is unprecedented in the long and storied history of the Republic.

What must be remembered, however, is that midterm elections are of late stages for political unrest. From the Republican Revolution in 1994 to President George W. Bush’s self-described “whoopin’” in 2006, midterm elections are seldom cause célèbre for the party in power over the past 20 years.

What is unusual, however, is the accelerated pace at which the pendulum is swinging. The Democrats controlled both houses of Congress for 40 years, from 1954 to 1994, through Democratic administrations under Kennedy, Johnson, Carter and Clinton. The Republicans took control in the Republican Revolution of 1994, promising a Contract With America. That majority lasted until four years ago, when the Democrats swept the majority aside.

While it remains to be seen whether the Democrats retain their majority this time around, there is little doubt that the landscape will be far different in early 2011 than it was in early 2009.

With only a handful of midterm elections out of the way, tenured incumbents are already packing up boxes, ready to vacate the Dirksen and Rayburn buildings in Washington.

The Scorecard

Utah - Delegates to the Utah Republican Party convention retired a three-term incumbent, Sen. Robert F. Bennett. Bennett was widely thought to be lacking a conservative enough voting record for the state’s political party. The June 22 primary will feature newcomers Mike Lee and Tim Bridgewater going head-to-head for the GOP nomination and an almost assured victory.

West Virginia – On May 11, the voters of West Virginia sent 14-term Congressman Alan Mollohan packing, selecting instead State Senator Mike Oliverio. Working against Mollohan was a volatile mix of anti-incumbent sentiment, anger over the health care vote, and Oliverio’s targeting Mollohan on ethics. Mollohan had held the seat since 1982, having won the seat once held by his father

Arkansas – Democratic Senator Blanche Lincoln remains on life support, and will run for her political life in a runoff against Lt. Gov. Bill Halter. Lincoln has been the Number One target of the GOP, having been blasted by Republicans for caving on the health care vote and Democratic allies for too often siding with her colleagues on the right. Whether Halter or Lincoln, the victor of the runoff will face stiff competition in GOP Rep. John Boozman, who has held the seat in Arkansas’ 3rd Congressional District since 2001.

Kentucky – In perhaps the most telling early bellwether, Rand Paul defeated the Republican establishment choice of Secretary of State Trey Grayson. Grayson had received the endorsement of Senate Minority Leader and fellow Kentuckian Mitch McConnell. Paul was the choice of tea party leaders, a role he filled with relish. His 59-35 percent victory over McConnell’s hand-picked candidate demonstrates that the political winds blow not just against incumbent Democrats, but incumbents, period.

Pennsylvania – The defeat of Senator Arlen Specter will undoubtedly be a blow to Democrats. Many analysts consider his defeat to be inevitable after his defection from the Republicans to the Democrats a year ago. In early 2009, Specter surveyed the landscape and realized his right flank was vulnerable. He left for the Democrats, hoping to find strength and a warm embrace in numbers. Instead, he suffered ignominious defeat in the party primary at the hands of Rep. Joe Sestak, who will face former Rep. Pat Toomey in November.

Pennsylvania 2.0 - Both political parties are left scratching their heads after Democrat Mark Critz, a former aide to the late Rep. John Murtha won by 8 percent over Republican businessman Tim Burns in the only race in the country that pitted Democrat against Republican. The House district, populated by "overwhelmingly white, blue-collar and not college-educated" voters, according to the Wall Street Journal, voted narrowly for John McCain in 2008 and was considered ripe for picking by the Republicans. The Dems are breathing a small sigh of relief and the Republicans are rethinking House Majority Leader John Boehner's claim of 100 Democratic seats in play this midterm.

By comparison, Critz’ former boss, the late Rep. John Murtha had a fairly iron grip on his district. He won with 73 percent of the vote in 2002, went unopposed in 2004 and had 61 percent support in 2006. In 2008, after an infamous gaffe in which he referred to the constituents of western Pennsylvania as “rednecks” and “racist,” Murtha still emerged with 58 percent of the popular vote. While the trend seems to be on the downward tack for the Democrats, the fact that they still retain the district has to offer a modicum of sunlight for the majority leadership.

In the first two weeks of June, a number of at-risk officials will face their own crucibles, including several in Alabama, California, Nevada and Virginia, as well as Round Two of the Battle of Arkansas.

At issue will continue to be the economy, jobs, energy security, global security, health reform, financial reform and deficit spending.

In four years, or eight, or 12, look for the anti-incumbent monster to rear its head again, striking fear into the Congressional majority.

All of this has happened before, and all of it will happen again.

Climate Legislation Introduced in the U.S. Senate

By John Hofland

Senators John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) released their much-anticipated climate and energy legislation earlier this month (Senator Lindsey Graham (R-S.C.) had been involved in crafting the bill but dropped out of the process after a disagreement with Majority Leader Harry Reid regarding immigration reform). Dubbed the “American Power Act,” the bill attempts to develop cleaner sources of energy and reduce greenhouse gas emissions. While it contains several important policy differences compared to the Waxman-Markey bill passed by the House last summer, its impact on American business will be the same: increased costs and decreased global competitiveness.

The bill's authors are quick to note that theirs is not a cap-and-trade bill. However, upon closer examination the bill caps overall emissions, requires covered sectors to have emission permits equal to their emissions and allows trading of permits. That sounds like a cap-and-trade bill.

Like the House bill, the Senate bill calls for a 17 percent emission reduction by 2020 and an 83 percent reduction by 2050. Emission levels from 2005 serve as the baseline year from which to make reductions. Unlike the House bill, which establishes an economy-wide cap-and-trade program, the Senate bill takes a sector approach with different requirements for electric utilities, manufacturers and transportation.

Electric utilities are required to participate in the program immediately in 2013 while manufacturers are not subject to it until 2016. Free emissions permits will be given to energy-intensive, trade-exposed industries in the beginning years to cover direct costs of compliance and to help offset the expected passed-through permit costs incurred by electric utilities. The bill also contains a “carbon tariff” to address the importation of goods from countries that do not regulate their greenhouse emissions.

The Senate bill does not include transportation in the cap-and-trade program; instead refiners will be required to purchase emission permits equal to the amount of their annual fuels sales. This cost will undoubtedly be passed along to consumers, which will increase the price of gasoline and diesel fuel.

The bill also sets a price collar for allowances. In the first year the price will be between $12 and $25. The floor and ceiling will rise each year at 3 percent and 5 percent above the Consumer Price Index, respectively.

Finally, the bill intends to refund a significant amount of the money raised through the sale of emission permits back to consumers, particularly in the later years, to help offset increased energy costs. It remains to be seen how much of the increased cost will be offset by these rebates. Some of the proceeds will also go toward deficit reduction.

The legislation has several other provisions, including:

• Provisions to increase the use of nuclear energy including an expansion of the loan guarantee program and accelerated permits, licensing, and judicial review of applications to build new nuclear plants;
• Expands offshore drilling but contains a moratorium on new leases until the Gulf oil spill investigation has concluded and allows states to enact a state law that prohibits leasing within 75 miles of that state's coastline;
• Provides financial incentives for carbon capture and storage in order to support the continued use of coal;
• Preempts all state and local greenhouse gas regulatory programs;
• Preempts EPA's ability to use other provisions of the Clean Air Act to regulate greenhouse gases, but permits EPA to continue to use the Clean Air Act to set performance standards for new coal fired power plants permitted after 2009.

Book by Tom Mullikin Wins 2010 National Indie Excellence Award for Business 

The Maxims of Politics: Making Government Work by GPRA head Tom Mullikin is the Award-Winner in the Business Category of the 2010 National Indie Excellence Awards, which recognize outstanding achievement in independently published books.

The Maxims of Politics is Mullikin's foundational treatise on issue management in the broad landscape of American public policy. His book serves as a field guide that empowers leaders to effectively navigate the dense and often treacherous jungle of issue management.

“The National Indie Excellence Awards contest shines a spotlight on books that demonstrate excellence,” said Ellen Reid, sponsor of the contest, author and a long-time champion of independent publishing. “National Indie Excellence Award judges are professionals from all aspects of the independent book industry, who select award winners and finalists based on overall excellence of presentation.”

For more information and a list of all Winners, Finalists and Sponsor’s Choice prize winners, please visit www.indieexcellence.com.