K Street in Brief

Taxed twice

A rallying cry of American colonial patriots was “No taxation without representation.”

American expatriates face another problem: double taxation with representation that they think hasn’t been particularly concerned with their point of view.

The Asia-Pacific Council of American Chambers of Commerce and other chambers in Asia announced Tuesday a new alliance that they hope will increase their influence in Congress.

{mosads}The Alliance for a Competitive Tax Policy says it is seeking to eliminate the “biggest tax increase on Americans working overseas in 30 years.”

The Tax Increase Prevention and Reconciliation Act in 2006 narrowed an exclusion on foreign-earned income. The effect was that more Americans who live abroad have to pay taxes to both the United States and to their country of residence.

The alliance has hired Akin Gump Strauss Hauer & Feld to take up its cause on Capitol Hill, where supporters like Rep. Gregory Meeks (D-N.Y.) and Sen. Jim DeMint (R-S.C.) have already introduced bills to fix the problem.

There are about 4 million Americans who live overseas, estimated Hal Shapiro, an Akin Gump lobbyist working with the alliance. But most are spread out among numerous small businesses or in huge corporate offices.

“This isn’t the kind of tax issue that hurts a particular business. It hurts a couple of people [who work at a business]. They are easy to overlook,” Shapiro said.

Shapiro acknowledges it could take a while to fix the problem, given that under pay-as-you-go budgetary rules, any loss in revenue would have to be offset somewhere else, either by a spending cut or a tax cut. But the alliance is starting to educate members about the need for the change.

“We have a long road ahead,” Shapiro said.

Jim Snyder

 

AARPeeved 

The senior citizens’ lobbying group AARP is rolling out a grassroots effort and an inside-the-Beltway advertising campaign to pressure Congress to keep Medicare premiums from rising because of pending legislation to increase doctors’ pay.

On July 1, Medicare payments to physicians will go down 10.6 percent — which Congress is loath to see — unless lawmakers step in to prevent it. Although the AARP supports the fee increase, the group does not want the extra cost to be borne by Medicare beneficiaries.

 “We cannot keep shifting the costs of a broken healthcare system on the backs of older Americans,” AARP Senior Vice President David Sloane said in a statement.

The AARP has dubbed the campaign “Keep Medicare Fair” and is organizing its members via a special website. The group has signed up 100,000 people in its first week online and through its monthly bulletin, which is sent to the AARP’s 35 million members.

The formula that sets annual premium hikes for Medicare’s physician benefit is based on the total cost of providing that benefit to all enrollees, meaning an increase in fees translates into an increase in beneficiary premiums.

Congress could exclude the fee increase from the formula this year, but it would significantly increase the price tag for the Medicare legislation. A proposal to replace the current formula and use the medical inflation rate to set doctors’ payments for the next 10 years would cost $288.1 billion, according to the Congressional Budget Office. To do so without affecting premiums would cost $364.3 billion.

Jeffrey Young

 

War of words 

The battle over a $40 billion air refueling tanker program continued this week.

On Monday, 22 retired Air Force generals wrote a letter to Defense Secretary Robert Gates denouncing the “vitriolic attacks” on the Air Force for picking an Airbus plane over Boeing’s for its new fleet of mid-air refueling tankers.

The generals, who are all associated with either Northrop Grumman or its team partner EADS, the parent company of Airbus, came to the defense of the Air Force and its decision.

“We are unwavering in our support of the military and civilian members of the Air Force team and know that they embody a commitment to integrity first,” stated the letter, which was also published as an advertisement in some news outlets.

Among the letter’s signers are Gen. Michael Ryan, the former Air Force chief of staff; and Gen. Charles Horner, former commander of the North American Aerospace Defense Command and Space Command.

Congressional supporters of Boeing have criticized the Air Force for its choice, arguing that the decision would severely affect the U.S. defense industrial base, national security and the aerospace workforce.

Boeing has filed a protest against the Air Force with the Government Accountability Office, arguing the merits of its 767-based tanker.

As part of a larger public relations campaign, Boeing last week ran an ad in 41 newspapers across the country, entitled “The tanker decision. Why it doesn’t ad up.”

In a counter-offensive, Northrop Grumman kicked off its own major public-relations campaign this week, focusing on advertising, op-ed pieces, blog posts and letter-writing.

Roxana Tiron

 

Drilling for support 

Executives from around 40 of the largest independent oil and natural gas producers are in town this week to encourage lawmakers to support domestic drilling.

They will emphasize in particular how the climate change bills that Congress is contemplating will increase the need for natural gas, which will mean areas now off limits to drilling will have to be opened up. While natural gas is a fossil fuel, it emits carbon dioxide at a significantly lower level than does coal.

“The demand for natural gas will increase under any of these proposals,” said Jon Bargas, a spokesman for the Independent Petroleum Association of Mountain States , which is sponsoring the fly-in.

Bargas said the executives would urge members of Congress to reject bills that, for environmental reasons, would block off more areas to drilling.

J.S.

 

Energy boost 

Six years ago, Sonnenschein, Nath & Rosenthal didn’t have a lobbying arm in Washington. But after hiring Elliott Portnoy away from Arent Fox , the venerable Chicago-based firm now has a book of business that was worth around $6.3 million in 2007.

The public policy branch announced Tuesday that it plans to continue its expansion by hiring away 13 counsels and other energy “specialists” from the firm Sullivan & Worcester .

The group will join the energy practice at Sonnenschein and will focus on regulation, litigation and public policy in Washington. The team will be led by Clinton Vince and James Costan.

Sonnenschein already represents energy clients like the Association of Oil Pipe Lines , FPL Group and Frontier Oil .

J.S.

 

Ready or not 

The head of the National Guard Bureau, Lt. Gen. Steven Blum, urged lawmakers on Tuesday to appropriate more money to the Guard and Reserve to boost the readiness of the forces that are asked to serve in Iraq and perform domestic missions like homeland security and disaster relief.

Blum told the House Armed Services Committee that the Guard’s “readiness level” is 61 percent. Blum stressed that all the National Guard forces deployed to Iraq and Afghanistan receive the equipment and training they need. The problem is the “unintended consequence” of slippage in the quality of the equipment and training that the forces receive for domestic missions, Blum said. With consistent funding, the Guard will reach a readiness level of 77 percent by 2013 and will be “in an acceptable place,” Blum added.

The National Guard is also getting significant support from the active Army and the service’s chief of staff, Gen. George Casey. In a letter to Congress, Casey said that the Army has $3.9 billion in so-called unfunded requirements, mostly for the National Guard.

The Army and the Guard are seeking congressional support and funding for what they call dual-use items — equipment that can be used both on the battlefield and at home. Such items are tactical trucks, Humvees, radio, engineering and medical equipment, as well as command and control technology and utility helicopters.

 R.T.