Thought of the Week
The Masters golf tournament kicked off yesterday, with defending champion Rory McIlroy sharing the early first round lead with a five-under par 67. The score is truly incredible when analyzed data suggests that a scratch golfer would shoot 85, a 5-handicapper would shoot 91, and an 18-handicapper would shoot 110 or higher at Augusta National under Masters conditions. Golf is unique in that established handicaps are designed to allow golfers of varying skill levels compete against one another head-to-head. Recently, the Global Business Alliance* (GBA) conducted a benchmarking survey designed to help GBA members better understand how their government affairs activities, strategies, and processes stacked up to other members and U.S.-based companies, a government affairs handicap of sorts (as you may know, GBA is the only trade association that exclusively represents the interests of foreign subsidiaries operating in the U.S.). Among the report’s key findings were:
Structure, Scale and Global Advantage:
- Global Function: 79% of GBA members have a global government affairs function, significantly higher than U.S. firms (45%).
- Resource Allocation: Government relations budgets are stable or increasing for over 85% of GBA members, with 52% of respondents reporting a departmental budget between $1.1 – $5 million. Staffing levels also increased for 54% of respondents, indicating a commitment to growing the function.
- D.C. Presence: 76% of GBA members maintain a Washington, D.C., office compared to 69% of American companies.
Strategic Engagement and Leadership Involvement
- CEO Engagement: CEO involvement in public affairs remains robust, with 75% engaging in direct federal/national lobbying or policymaker meetings in the last 12 months. The most frequent activity (80%) is active participation in trade and business associations.
- Key Issue Priority Shift: After a recent spike, trade/sanctions are now the highest priority issue lobbied at the federal level; tax issues rank second.
- Lobbying Focus Shift: The average time allocated to executive orders/actions or outreach rose from 18% in 2022 to 22% in 2025, second only to legislation and legislative outreach (35%).
- Top Targets: The Executive Branch and political appointees were overwhelmingly ranked as having the greatest impact on foreign subsidiaries, followed by Congress and federal agencies.
Integration, Contracting and Political Activity
- Integration Is Lower: Foreign subsidiaries are far less likely to take a leading role in cross-functional areas compared to their U.S. peers.
- 55% of government relations departments play a leading role in coalitions.
- Integration with CSR (45%) and communications (64%) is lower when compared to American firms.
- Government Contracting: 43% of GBA members report involvement in federal government contracting, with the Department of Defense being the top agency.
- Political Engagement: 54% of foreign subsidiaries are involved in federal political giving; however, GBA PACs tend to be smaller than their American counterparts.
Technology Adoption and Benchmarking Challenges
- Rapid AI Adoption: AI is being utilized across GBA membership; 35% use non-integrated AI tools (e.g., ChatGPT), and 33% have AI integrated into proprietary systems.
- The primary use cases are content generation (47%) and Proofreading/Editing (45%).
Thought Leadership from our Consultants, Think Tanks, and Trade Associations
Bloomberg Government Sees Fiscal Fights Expanding with Trump Budget Requests. President Trump’s fiscal 2027 budget request delivered on April 3 kicked off the latest budget season on Capitol Hill. Over the coming months, Congress will respond to the $2.2 trillion spending plan, which proposes a record $1.5 trillion for defense spending and a roughly 10% cut to civilian agencies. While lawmakers are still working through the last fiscal 2026 spending bill, with votes possible after the recess on a Homeland Security bill without funds for Immigration and Customs Enforcement or the Border Patrol, Republican leaders are discussing using the budget reconciliation process to advance funding for the omitted agencies, possibly for several years. Republicans advanced last year’s tax and spending law using reconciliation procedures, which require adoption of a budget resolution and allow passage with a simple majority in the Senate. There’s also interest in using the same process again to advance funding for the Defense Department and war needs as well as provisions addressing government fraud and alternatives to the SAVE America Act requiring voter ID. Any provision included in a reconciliation measure has to be narrowly tailored and related to the federal budget or it could be removed under the Senate’s Byrd Rule.
Capital Alpha Says Ceasefire Doesn’t Mean the Underlying Issues Have Been Resolved. President Trump’s announcement of a two-week ceasefire might be a positive for defense sentiment, but the war could easily resume in April. Conviction levels for when the conflict could be resolved remain 25% in May, 45% in the fall of 2026, and 35% in 2027. Among the core issues that remain unresolved are the elimination of Iran’s nuclear and ballistic missile threat and Tehran’s ability to attack Gulf maritime traffic. While a two-week ceasefire won’t provide the interval for Israel and the U.S. to rebuild weapons inventories, it may give Iran time to dig out ballistic missile and drone storage facilities that had been hit in air and missile strikes. An issue with threatening dramatic action and then, at the very last moment, retreating is that adversaries will tailor their actions to that pattern. Thus, President Trump’s threats to attack Iran’s power grid and bridges were met by Iranian threats to attack energy facilities and infrastructure in Saudi Arabia. Going forward, it may be worth considering how these patterns could impact geopolitical risk elsewhere. It should be reiterated that the destruction of the Islamic Republic’s air and naval forces is a misplaced strategic objective, as regional states could have handled both. The far greater conventional factor has been Iran’s drone and missile forces. It’s improbable that the U.S., Israel, and Arab regional states will agree to an extended ceasefire or cessation of military action that provides the Islamic Republic and the IRGC with the resources, either through the resumption of trade or reparations, to rebuild its missile, air defense, and drone inventories. If an extended ceasefire emerges with financial relief for Iran, this would lead to new regional investments to counter Iranian missile and drone systems.
Eurasia Group Believes Market Disruptions Will Continue for Months After Hostilities Cease. Even in the event of a cease-fire, it will take months to repair oil refineries across the Middle East; about a third of which have sustained damage in the war to date. Dozens of empty tankers sit anchored offshore of Singapore; it would take them at least two months to pick up oil from the Gulf and deliver it back to Asia. At the same time, Europe is facing its first fuel shortages, with several Italian airports announcing fuel restrictions; more shortages will spread across Europe from April or May, if the conflict continues.
“Inside Baseball”
91% of K Street Leaders Say Democrats Will Win the House in the Midterms. Nearly all K Street leaders believe Democrats are on track to take back the House in the 2026 midterms, according to Punchbowl News’ latest Canvass survey.* The broad agreement is already influencing how Congress approaches spending, policy, and relationships ahead of a potential shift in power. Most respondents (91%) said Democrats will win control of the House in November, compared to just 9% who believe the GOP will hold onto its razor-thin majority. There’s also skepticism about whether Republicans can even maintain their grip on the House before this session ends. Just over half of K Street leaders said it’s likely Republicans will lose their majority before the new Congress is sworn in. Beyond the House, K Street is already mapping out key Senate primaries. In Maine, respondents narrowly favored Graham Platner to win the Maine Senate Democratic primary, with 53% backing him compared to 45% for Gov. Mills. In Texas, GOP Sen. Cornyn is seen on K Street as the frontrunner in the Texas Senate Republican primary, with 52% predicting he’ll win compared to Texas Attorney General Paxton’s 46%. President Trump said he would make an endorsement in the runoff between the two, but there’s been no announcement yet. Although Cornyn got 42% of the vote in March, edging out Paxton, the race goes to a runoff in May, without Rep. Hunt (R-TX) on the ballot.
*The Washington office participates in the Canvass survey.
In Other Words
“You know, Biden would use the autopen. He was incapable of signing his name,” President Trump to a group of elementary school children writing cards to members of the military at the annual White House Easter Egg Roll.
“While I support maintaining our readiness and replenishing stockpiles, I cannot support funding for further military operations without a formal declaration of war from Congress,” Sen. Curtis (R-UT); the statement is a sign of the challenges the Trump administration may face in moving a defense supplemental via reconciliation, as near-unanimous Republican support in both chambers of Congress will be necessary.
Did You Know
The Artemis II crew broke the record for the farthest distance humans have ever traveled from Earth (252,756 miles), surpassing the Apollo 13 mark of 248,655 miles set in 1970.
Graphs of the Week
A significant share of the U.S. military’s most critical assets is already committed to the Iran theater, according to research by the Atlantic Council. Even with Tuesday’s 11th-hour cease-fire, Pentagon officials have made clear that the U.S. military stands ready to resume its attacks if/when President Trump gives the word. “We’ll be hanging around. We’re not going anywhere,” Defense Secretary Hegseth said earlier this week, adding that U.S. troops are ready to “restart at a moment’s notice.”