Thought of the Week:
Official Washington is still on its unofficial month-long August recess. While members of Congress, congressional staffers, administration officials, and federal bureaucrats will begin to trickle back into the city after Labor Day, Congress will not reconvene until September 9. Even with much of Washington still on vacation, SCOA’s Washington office was on Capitol Hill this week, along with one of our trade associations, the Global Business Alliance (GBA), to lobby in favor of what has become an existential issue for many corporate advocates, particularly those who represent foreign subsidiaries like SCOA. The issue in question is one of those, shake your head, “only in D.C.” kind of deals—we were essentially lobbying the House Committee on Oversight and Accountability in favor of continuing to be able to lobby. That’s right, in a town that runs in large part on lobbying dollars (lobbying is a $4.27 billion annual industry), we were on the Hill lobbying for the right to lobby. Despite the right to lobby being ingrained in the Constitution’s First Amendment guarantees (Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances) at issue are the circumstances that determine the specific act under which a lobbyist must register—the Lobbying Disclosure Act (LDA) or the Foreign Agent Registration Act (FARA). Bottom line, a change in registration requirements from the LDA to FARA would force in-house corporate lobbyists for foreign subsidiaries, regardless of the number of Americans their companies employ, to consider closing shop. At present, the LDA includes a commercial exemption for corporate lobbyists of foreign subsidiaries that allows them to advocate their positions before Congress and the administration on par with advocates for U.S. companies. Lifting the LDA’s commercial exemption for foreign entities is an issue that arises periodically, either out of Congress or the Justice Department. The impetus for change is typically China, other countries of concern, and/or sovereign wealth funds; however, the legislation is often drafted in a way that touches a much wider pool of impacted parties, namely foreign subsidiaries. When compared to registration under the LDA, FARA’s restrictions, in the absence of extremely expanded legal and compliance efforts, would be too stringent for many companies to meet. Although we remain confident in being able to reach an adequate number of receptive ears, no one on K street can afford to be complacent in a presidential election year, especially one in which we could see a change in administration and/or changes in both houses of Congress. This year may also feature a lame duck session of Congress with must-pass legislation, a perfect vehicle for attaching something as obscure as a rule change impacting lobbyist/agent registration. While the intricate machinations around the LDA and FARA might be something that concerns few outside the beltway, here, for your reading please, are a few other questions, every true DC lobbyist must be able to answer:
-Which way does the Inner Loop of the beltway revolve?
-Lettered streets run East to West (numbered streets North to South), which three letters are skipped?
-Name another nickname for K Street (hint, it involves an Italian fashion designer)?
-Approximately how many federal lobbyists are there?
-Who coined the term lobbyist?
-Name at least four pubs, not on Capitol Hill, that lobbyists frequent?
Thought Leadership from our Consultants, Think Tanks, and Trade Associations
Eurasia Group Believes Former President Trump’s New Messaging Strategy is Targeted at Boosting Turnout. Anticipating a post-convention boost for Harris in the polls, the Trump campaign will shift into a higher gear, embracing more frequent—and less conventional—forms of voter engagement. In addition to traditional rallies, the Trump campaign is planning several interviews with popular TV and social media figures. These appearances are not only cost effective but are designed to keep Trump focused on a given topic and to reach out to more undecided voters—chiefly younger men—who likely turn to alternative sources for their news. The new strategy is a highly targeted approach aimed at bolstering turnout rather than persuading new voters. Trump has consistently suffered from a firm ceiling of support of roughly 45%, whereas Harris’s support has only been increasing since Biden’s exit, and she appears to be capturing a significant number of the so-called “double haters” who said they would not vote for either Biden or Trump.
The Global Policy Group Recaps the DNC. The Democratic National Convention concluded late last week with Vice President Harris delivering a speech accepting the party’s nomination for president. During the convention, Democrats adopted a platform that was written before President Biden ended his bid for reelection. As a result, the 91-page platform mentions President Biden 287 times, including 19 references to Biden’s “second term;” mentions former-President Trump 150 times; but only mentions Vice President Harris 32 times. The platform largely sticks to generalities and avoids issues that could spark divisions among Democrats—a concerted effort by the party to unite behind Harris and focus on defeating former-President Trump in November. The platform is more of a discussion paper made up of longstanding Democratic Party priorities rather than a guide to the policy priorities of Vice President Harris, making it a sharp contrast to the platform adopted by Republicans last month, which was shaped by former-president Trump and reflected his own views on key policy issues. The Democratic Party platform includes many longstanding core policy priorities, including strengthening voting rights laws, enacting legislation aimed at reducing gun violence, and restoring and protecting abortion rights. These core Democratic priorities are likely to play leading roles in Vice President Harris’ campaign, and Democrats believe that restoring reproductive rights will be a key issue in the upcoming election.
Observatory Group Questions What is Possible in Congress Under Harris or Trump. Because both Vice President Harris and former president Trump are running on populist agendas that would require congressional approval to move their biggest proposals, the makeup of Congress will significantly impact how far each will be able to go. At present, there is about a 50-50 chance for a divided Congress, about a 1/3 chance for a fully Republican Congress, and low odds of a fully Democratic Congress. On the broadest basis, regardless of who is elected and whether there is a Republican, Democratic, or divided Congress, investors should expect the U.S. federal deficit to worsen. In addition, irrespective of who is elected president and which party controls Congress, in 2025, Congress will have to deal with two major fiscal issues—the expiration of some of the 2017 tax cuts and raising the debt limit that will set domestic spending caps for FY26 and FY27. A fully unified Washington, regardless of party, brings risks. If Republicans retake the Senate and keep the House, not only will there likely be a sharp increase in the federal deficit but also the possible end of the legislative filibuster in the Senate (the requirement that most legislation in the Senate receive 60 votes to advance). There is an even more pronounced risk of ending the filibuster with a fully Democratic Washington. A divided Congress brings different risks, including the impeachment of Trump (Democratic House), a confirmation crisis for Harris nominees (Republican Senate), and oversight wars involving either Trump or Harris. Beyond major must-pass legislation, all of this will contribute to an atmosphere of extreme partisan gridlock. Such gridlock will increase the odds that states take it upon themselves to address issues Washington is ignoring, and it raises the probability that a President Trump or Harris will look to executive action to advance priorities Congress isn’t willing to consider. However, recent Supreme Court rulings may make unilateral executive action much more difficult than in the recent past.
“Inside Baseball”
Take Me Home Country Roads. John Denver fans know that the actual country road traveled in the iconic song runs through Maryland’s Montgomery County on the way to West Virginia. Beyond the most famous night club closing song in history, the two states share something else in common—this election cycle, races there may determine which party ultimately controls the Senate. Although it has long been assumed that West Virginia Governor Jim Justice (R) will succeed Senator Joe Manchin (D-WV) in the heavily Republican leaning state, a new AARP poll shows that former Maryland Governor Larry Hogan (R) has pulled even in his race for the Senate—even as Vice President Harris leads former president Trump by more than 20 points in the Old Line state. While Harris leads among every demographic group apart from Republicans in the poll, Hogan holds double-digit leads among voters under 35, independents, and white voters. Much of Maryland’s ticket splitting can be explained by Hogan’s favorability stemming from his time in office, earning him a 59% favorable rating in the same poll. Prince George’s County Executive Angela Alsobrooks is still undefined to a significant portion of the electorate, and she will need to make up ground with Harris-Hogan voters if she wants to keep Maryland off the chopping block for Senate Democrats.
In Other Words
“We believe both candidates’ mics should be live throughout the full broadcast. Our understanding is that Trump’s handlers prefer the muted microphone because they don’t think their candidate can act presidential for 90 minutes on his own,” Brian Fallon, Harris campaign Senior Adviser for Communications.
Did You Know
Two candidates—John Quincy Adams and Rutherford B. Hayes—became president even though they did not win either the electoral or popular votes; three others—Benjamin Harrison, George W. Bush, and Donald Trump—became president by winning the electoral college but losing the popular vote.
Graph of the Week
AEI has found that Americans’ social networks have not bounced back from the global pandemic. The percentage of Americans reporting no close friendships increased from 12% in 2021 to 17% in 2024. Additionally, a growing educational gap in the size of friendship circles can be identified. Data shows that 24% of Americans with a high school diploma or less education report having no close friends, compared to 10% of college graduates. Similarly, just 17% of Americans without a college degree have at least six close friends, compared to 33% of college graduates. This educational gap is even wider among black Americans: 35% of black Americans without a college degree report having no close friends, compared to just 11% with a college degree. Financial strain and declining membership in three institutions—marriage, religious organizations, and labor unions—have are behind the decline in social ties among Americans without college educations.
