July 14, 2023

Thought of the Week:

One of my first jobs in Washington was as a place holder; I was literally paid to wait in line. A fraternity brother had a job interning for a Capitol Hill lobbying firm, and using a $20/hour lure, he recruited several of us to wait in line in the halls of Congress. $40 for two hours work was big money for a 19-year-old in the mid-1980s, but it was nothing for lawyers and lobbyists to pay to ensure they had in-person access to the highest profile Congressional hearings. This was pre-Internet and before the 24-hour news cycle, and the job entailed waking up early, heading to one of the House or Senate office buildings, and getting in line two, sometimes three, hours before a hearing was to begin; 10 minutes before the event started an associate from a firm would show up, hand me a check, and take my place in line. Congressional hearings take place almost daily, and, today, there are a number of line standing and seat holding service companies to choose from in Washington. This week saw high-profile Congressional testimony from FBI Director Wray and Senate testimony from PGA Tour executives concerning the proposed PGA Tour-LIV Golf merger, and no doubt, there were some in attendance who used place holding companies to guarantee their spot. Beyond agency heads like Director Wray, corporate executives get called to testify before Congress all the time, and preparing for and executing congressional testimony can be high-stakes and stressful. Understanding the rules, and customs, of legislative hearings is essential if companies want to position themselves to advance policy goals and minimize legal or reputational fallout. According to Congressional experts, the keys to preparing for hearings, include:

1) Finding the Right Team. Hearing preparation requires a variety of areas of expertise to cover all of the challenges posed by the event. A preparation team should include subject matter experts, legal specialists, lobbyists, and communications professionals. In addition, firms need to know if they’re being asked to testify about a problem or if they are the problem.

2) Don’t Be Too Hard or Too Soft. Congressional hearings aren’t litigation and shouldn’t be treated as such. The best approach is to blend the discretion of the lawyers with the collaborative spirit of the government relations team.

3) Don’t Lie. Tell the truth while giving testimony and when communicating with congressional staff. Providing a false statement to Congress is a crime, regardless of whether one is under oath. In addition, the communications team should get facts out prior to the hearing. Once a narrative is established, even if false, it’s difficult to undo.

4) Know Your Friends and Enemies. Sort out who your organization’s “friends” are on an issue and leverage those relationships to make or reinforce key messages. At the same time, explore which organizations are more disliked by legislators, and contrast your firm with other potential witnesses on the issues. In addition, check in with friendly members in advance of the hearing to gauge the environment surrounding an issue.

5) Make Your Testimony Unmemorable. Hearings are not trials that can be won or lost. While legal elements exist, at their core hearings are political theater. A confrontational/condescending approach shifts the tone of the hearing, and witnesses lose nearly every time that happens. A snappy back and forth makes good video for legislators and the media, but rarely witnesses. Ultimately, the goal is to make testimony as forgettable as possible because the only hearings remember are those where the CEO did a really bad job.

6) Find a Local Angle. It’s more difficult for a lawmaker to demonize an industry if they’re in the member’s home district. Figure out ways to extend the company’s impact—if necessary, think about supply chains from raw materials to finished product.

Thought Leadership from our Consultants, Think Tanks, and Trade Associations

Bloomberg Government Says Inflation Data Gives Biden a Boost. The U.S. inflation rate’s slide to a more than two-year low signals a major step toward ending the cost-of-living emergency—and possibly the Federal Reserve’s historic monetary tightening, too. At 3% last month, consumer-price inflation is now just a third of the level it reached a year ago, which was the highest in four decades. The slide comes after a period of two years when the “Great Inflation” debate hogged headlines and loomed over everything from U.S. presidential politics to bar-room conversations. Although a single month’s numbers do not mean it’s game over in the fight against inflationary pressures—especially for the Fed, which is widely reckoned to be locked-in to another interest-rate hike later this month—there is now a better-than-even chance that a July 26 hike, which would take the benchmark rate to 5.5%, could be the last in quite a while. In fact, White House National Economic Council Director, Lael Brainard, went so far as to say that inflation is trending toward lower levels and the chance of a recession hitting the American economy is waning.

Eurasia Group Insists President Biden Will Lead Democrats in 2024 Despite Indications of Discontent Within the Party. With President Biden’s approval ratings hovering in the low 40s and former president Trump likely to be the Republican nominee, the 2024 election looks like a coin flip. The risk that the relatively unpopular Biden, who is showing unmistakable signs of aging, could lose to the Republican nominee has motivated behind-the-scenes discussions among some Democratic leaders about replacing the president at the top of the Party’s 2024 ticket. However, such an outcome is unlikely to occur, for three important reasons:

  • President Biden will not drop out of the race willingly and as the incumbent would have the overwhelming advantage in a contested primary. In fact, the Party has already reformed the electoral calendar in his favor, and if Biden were to exit the race it would only be through a well-coordinated, behind-the-scenes pressure campaign from Democratic elites;
  • Biden’s presumptive replacement at the head of the ticket would be Vice President Harris. Although she is even less popular than Biden, and would be even more likely to lose to the Republican nominee, as the first woman and African American in the role she would be nearly impossible to skip over. Such a dynamic does not incentivize Democratic elites, who are more motivated to defeat Trump than replace Biden; and
  • Any attempt to replace both Biden and Harris would be enormously difficult; it would require behind-the-scenes coordination from a two-person ticket sometime in the next six months, which would risk alienating Black and progressive voters, key constituent groups of the Democratic base. 

Elected officials, even those willing to entertain covert discussions about replacing Biden, are unlikely to come out publicly in favor of replacing the president; they do not want to pay the political costs of opposing the current president and party head without guarantees that others will do so as well. The behind-the-scenes nature of these discussions makes a coordinated public move nearly impossible to agree upon.

Global Policy Group Gazes Into Sabato’s Crystal Ball. The University of Virginia’s Larry Sabato released the first look into his well-regarded Crystal Ball examining the 2024 Electoral College outlook.  The Crystal Ball foresees that there will be only four true “toss-up” states in the upcoming presidential contest: Arizona (11 electoral votes); Georgia (16); Nevada (6); and Wisconsin (10). Sabato also projects that North Carolina (16) and Maine’s 2nd congressional district (1) lean Republican (Maine and Nebraska split their electoral votes by district), while Michigan (15); Pennsylvania (19); and New Hampshire (4) lean Democratic. The remainder of the states are considered either safe or likely to be won by one of the two major parties. The Crystal Ball forecasts that, by combining safe, likely, and leaning states for each party, the Democrats have 260 electoral votes and the Republicans have 235 with only 43 electoral votes considered toss-ups. Thus, from Sabato’s standpoint, Democrats are much closer to the 270 votes needed to win the presidency.

“Off the Record”

A Backdoor Impeachment Move? With House Republicans divided over whether to impeach members of the Biden administration, some in the GOP are considering a possible alternative: simply zeroing out their salaries. The tool that some members, mostly conservatives, are eying is the Holman Rule, an obscure and controversial power that allows lawmakers to reduce the salaries of—and effectively fire—specific federal employees. The possible targets are exactly who you might guess: Attorney General Garland, Homeland Security Secretary Mayorkas, and possibly FBI Director Wray. While some are even hoping to use the procedure on investigators working for special counsel Jack Smith, two caveats exist. First, using the Holman Rule wouldn’t necessarily mean Republicans would skip impeachment. In fact, one GOP source said the two tools are not mutually exclusive and that proceedings against Garland could start in the Judiciary Committee as soon as this month. Second, using the power of the purse to punish Biden administration officials isn’t destined to be any more successful than impeaching them, which is to say not at all, given Democrats’ control of the Senate and the need for the president’s signature on any appropriations bill.

In Other Words

“I don’t think so. I’m not a No. 2 guy,” Florida Gov. DeSantis (R) on whether he would join former President Trump’s ticket as vice president.

Did You Know

Both Vice President Aaron Burr and Vice President John Breckinridge self-exiled to Great Britain. Burr did so after killing former Treasury Secretary Alexander Hamilton in a duel, and Breckinridge, the youngest vice president and later a Confederate major general, did so after the end of the Civil War.

Graphs of the Week

According to the latest Gallup survey, trust in institutions continues to fall. In fact, significant declines in public confidence were seen in 11 of the 16 institutions Gallup tracks annually, with the presidency and Supreme Court suffering the most. The share of Americans expressing a great deal or fair amount of confidence in these two institutions fell 15% and 11%, respectively.

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