You would think, given that Congress just passed a nearly $800 billion stimulus bill and there is already talk of a second stimulus billin the near future, that business would be booming on K Street — the epicenter of the federal lobbying industry. After all, with all that federal cash coming down the pipe, somebody has to make the case for clients looking to snag a chunk of it.
The number of active lobbyists declined 2% in 2008 to 15,900, recording its first yearly drop in seven years, according to a Wall Street Journal analysis of public records. The decline, which started in mid-2007, accelerated in the second half of last year, even when the federal government was taking on a greater role in corporate activity, pumping billions of dollars into the marketplace to boost economic growth and help revive Wall Street.
The Journal reports that industries across the board are cutting their lobby shops, though auto manufacturers and Wall Street are making some of the broadest cuts. Not surprising, considering these industries have received hundreds of billions of dollars combined — and turning around and spending that federal money to lobby the government for ever more federal money could create a bit of a PR problem. According to The Journal, the current decline is the largest since 2001, when K Street said goodbye to five percent of its registered lobbyists.
While some lobbyists undoubtedly have lost their jobs, before we shed two many tears for all these poor, unemployed lobbyists, it might be worth examining a couple of possible other contributors to the trend that The Journal fails to consider.
If my wicked math skills are accurate, a two percent decline means approximately 320 federal lobbyists have deregistered. It seems quite likely that a significant portion of these are heavily connected to the Republican Party. With Democrats in firm control of both houses of Congress and the presidency, now might be an ideal time for those lobbyists who were in high demand because of their access to GOP leaders to take a long vacation or find something else to do for a while, at least until late 2009 or so.
Also, and perhaps more important, the Journal reports that the decline “accelerated in the second half of last year.” Let’s see, what was going on in the second half of last year? I seem to recall some sort of election was dominating the headlines. By early fall, it was becoming increasingly clear that then-Sen. Obama had a very strong chance of winning the White House. He also pledged that former federal lobbyists would not be allowed to work in his administration for two yearsafter leaving their jobs on K Street (though, of course, that promise turned out to be somewhat less absolutethan originally expected). As The Huffington Post’s Ryan Grim reportedlast week, the Obama administration’s lobbying restrictions have produced “a cottage industry of deregistration” among progressive lobbyists who hope to work in the administration once their two-year cooling-off period passes.
If this is the case, is it really much of a surprise that the lobbying ranks on K Street have thinned marginally?
Finally, the current number of registered federal lobbyists in Washington has returned roughly to Clinton-era levels,after more than doubling during the K Street project’s heyday way back when the GOP controlled Congress and the White House. Perhaps the housing bubble that played a key role in decimating the global economy was accompanied by a “lobbying bubble” in Washington during the Bush years — and the market is simply correcting itself.