New Senate majority jolts K Street

Business groups and lobbying firms were jolted this week with the surprise results of Georgia’s two runoff elections that tipped the balance of power in the Senate to Democrats.

Lobbyists connected to Senate Majority Leader Mitch McConnell (R-Ky.) and other top Republicans in the chamber are now shifting gears and hoping a Democratic-controlled Washington will attempt to tackle some bipartisan issues.

“I think the big shift here is one of priorities. The business community will undoubtedly be playing more defense than they otherwise would have been. But there will be bipartisan opportunities on big things like appropriations and infrastructure and on more tailored things like retirement policy,” said Brendan Dunn, a partner at Akin Gump and former McConnell aide.

Meanwhile, Democratic-focused lobbying shops, particularly those with connections to President-elect Joe Biden, Speaker Nancy Pelosi (D-Calif.) and incoming Senate Majority Leader Charles Schumer (D-N.Y.), are in a stronger position to deliver for their clients.

“Dems are the new ‘it’ girls, for sure. I don’t think Republican lobbyists have to worry too much because things are so close in the Senate, but it does give the Dems the gavel, and therefore the power, and makes them the kings of the forest,” said Ivan Adler, president of Ivan Adler Associates, a lobbyist recruitment firm.

The unexpected shift in power underscored the value of having bipartisan lobbying shops, many K Street veterans said.

“I think if anything the election shows the importance of having bipartisan firms and having firms that can continue to provide strategic counsel regardless of who is in charge,” said Blake Androff, executive vice president of Signal Group and a former Pelosi aide.

Marc Lampkin, Brownstein’s government relations department chair, said he sees the new Senate power shift “more as an opportunity for bipartisanship in firms and places that have a lens across the bipartisan divide.”

Androff added that the biggest challenge will be for “firms that are purely partisan and on the Republican side who just peddle on access.”

Several GOP-heavy firms started bulking up their Democratic ties in 2018 after Republicans lost the House. Those shifts continued after Biden started pulling ahead of President Trump in the polls.

Trump-connected lobbyist Brian Ballard, a top fundraiser for the president whose lobbying shop Ballard Partners has boomed over the last four years, announced this week that Democratic fundraiser Courtney Whitney was joining the firm.

Lampkin noted that the 50-50 divide in the Senate means “the Republicans are going to have to be part of the decision.”

For most legislation, Senate Democrats will need some GOP support to clear the 60-vote threshold needed to advance bills.

“The close margins in both chambers mean that you’re going to have to govern more center-left as opposed to hard progressive left,” Lampkin said.

Democrats control the House by a very slim margin, with Pelosi having about a 10-seat advantage after Republicans flipped seats in November and as several House Democrats are slated to join the Biden administration.

“I think a closely divided government should be good for most established and diversified government relations shops,” said former Rep. Vin Weber (R-Minn.), a partner at Mercury LLC. “We’re going to have one party in a sense but the margins in the Senate and House are so close.”

The business community is expected to rely more on lobbyists to hit the brakes on some Democratic priorities.

“It’s always easier to stop a bill than to move one. So the Republicans on the Hill will need all the help they can get from their friends on K Street to minimize the damage in the first 100 days,” said Tim LaPira, professor of political science at James Madison University.

K Street was already preparing for energy and environment regulations out of the Biden administration, but control of Congress increases the odds of legislation on those and many other issues affecting the business community.

“For business lobbyists, whether you’re Democrat or Republican, this is not the time to take time off because they’re going to be playing a tremendous amount of defense the next four years,” said Doug Pinkham, president of the Public Affairs Council.

Increased financial regulations are now a serious cause for concern in the business community, as are the possibility of changes to the tax code.

Androff said the new power dynamic means companies and industries will turn to well-positioned Democrats and bipartisan firms to navigate Washington.

“For the business community, they’re obviously going to have to approach this through the lens that they have to continue to work with both sides of the aisle to get their priorities across the finish line,” he said.