Businesses cannot agree on stimulus plan

As difficult as it may be for congressional Democrats to strike a deal with President Bush on a stimulus package, getting K Street to rally around the plan may be even tougher.

There is no shortage of concern about the flagging economy in the business community, but disagreement among lobbyists over the remedy could complicate any congressional intervention.

{mosads}“The business community is all over the board. The only common denominator that I’m aware of is ‘do no harm’ — don’t raise taxes,” the executive vice president of the National Federation of Independent Business (NFIB), Dan Danner, said.

Some lobbyists favor swift action to shore up consumer confidence, fearing that bolder measures will only mire a would-be package in political battles. Other lobbyists see a stimulus bill as a vehicle to move long-standing priorities — from extending the Bush tax cuts to spurring more tourism in the United States.

A few aren’t convinced that Congress should step in at all. “We’re not yet sure. We want to see more data,” said John Castellani, the president of the Business Roundtable, a group representing the chief executives of some of the largest U.S. corporations.

 A real fear for the business community is that Democrats will attach tax increases to offset the legislation’s price tag, which could reach as high as $100 billion. “Anything that has tax increases in it is not a stimulus,” a tax expert at the National Association of Manufacturers (NAM), Dorothy Coleman, said.

Viewpoints begin to diverge from there, however. The top lobbyist for the U.S. Chamber of Commerce, Bruce Josten, favors slashing the capital gains rate for corporations to revitalize the economy. He also says that boosting investment in the country’s roads, bridges and rail network would prop up the job market.

 Coleman argues that extending the R&D tax credit — and also expanding it — would give the economy a big lift. Though the credit is among many tax provisions that Congress has routinely renewed, she expressed concern that the stimulus package could be “the last train leaving the station” this year due to the distraction of the November elections.

Then there are the tools the Bush administration has used previously to stimulate the economy, such as taxpayer rebates and provisions that allow companies more quickly to deduct the costs of equipment purchases.

Business tax relief is clearly popular, but many lobbyists argue that bolstering flagging consumers should be the first goal. “Something that gets as much cash as reasonable to people as quickly as possible is what really works,” Castellani of the Business Roundtable said.

Yet there is disagreement over how best to get money to households — whether through rebates or through payroll or sales tax holidays. “If you say you want consumer confidence to go up everybody would agree. The question is how you do that,” Danner said.

 Lobbyists have not let a lack of unanimity keep them from pressing their own views on congressional aides and administration officials in recent days. They will only redouble those efforts once lawmakers, having returned from the winter recess, unveil their proposals, which could happen as soon as next week.

The overall effect of the lobbying could appear scattershot, according to Danner. “I do think as soon as something comes out, there will be lots of activity. My sense is it won’t be action of the consensus nature,” he said.

Coleman predicted that the business community would unite around a course of action. “People are talking among themselves about things. I don’t think we’re there yet,” she said.

 Some lobbyists believe that business groups will ultimately back a package of targeted measures to bolster consumers, recognizing the need for decisive action as well as the constraints of election-year politics.

“We need a boost in consumer confidence and that, I believe, will come not solely from the effect of policies but the very fact that we are acting,” said Jade West, a lobbyist for the National Association of Wholesaler-Distributors who also runs the Tax Relief Coalition.

To that end, West argued that the business lobby needs to set aside, at least for now, some of its more polarizing goals — such as the extension of the Bush tax cuts — even though they may be wildly popular with businesses.

And given Democrats’ preference for helping individuals over corporate America, some business tax relief would likely be off the table, she warned: “I think we’ll have a hard time selling any tax provision that looks like it is geared to the giant corporations.”