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How Special Interests Won and Lost the Budget and Sequester Fights

This blog post first appeared on Forbes.com

A couple weeks ago, the U.S. Senate adopted numerous “message” amendments to the 2014 budget resolution.  The message amendments are nonbinding, but reveal the causes that have momentum for the “real” budget fight later. According to The Hill, there were some distinct winners and losers in the battle. Among the winners: Medical device companies, retailers, the oil and gas industry, and seniors groups and unions. The losers included sugar reformers and campaign watchdogs.

I also was reminded of the winners and losers (well, mainly the losers) from aRoll Call article  on the “K Street failure” associated with the sequester cuts, focusing on health organizations that failed to delay or stop cuts to their programs.  It reminded me that while their strategy and tactics were probably solid, many times we fail because we do not  adapt our strategy and tactics to the context of your influence attempt.

As I reviewed the list of organizations engaged in the budget amendment and sequester situation, I know that probably all of these groups deployed the following influence tactics. They:

  • developed a coalition of similarly-affected groups (one health coalition had 3,500 organizations engaged!);
  • created a web site and social media presence for their coalition / organization;
  • wrote and distributed “white papers” or position statements distributed to media and lawmakers;
  • executed paid advertising in favor of their issue across all mediums;
  • created grassroots noise and activity whereby citizens contact their legislators on the issue;
  • recruited opinion leaders and “key influentials” to convince them to vote with said cause;
  • dispatched their internal lobbyists to have face to face meetings with legislators and their staff;
  • ditto for your grassroots stakeholders, preferably en masse at their “Lobby Day” events;
  • hired a bi-partisan team of outside lobbyists (Democrat and Republican leaning lobbyists);
  • contributed PAC funds to supportive legislators; and,
  • hosted legislators to visit their facilities to vividly see how the budget impacts their ability to grow, innovate, create jobs, serve their stakeholders (students, patients, etc.).

Notwithstanding the fact that the abundance of a tactic dilutes its’ power, all of the above tactics are good and well-intended. Then why did so many people lose the battle? And why did some win? Without judging the righteousness of any of these interests, I will illuminate why their tactics and the context may have worked for them, and of course, the bottom line as you seek to win hearts and minds of legislators and the public.

First, let’s go to the dark side and look at one reason those who lost fell short.

One Reason the “Losers” Fell Short

When we examine the sequester fight, public health advocates, university professors, defense contractors and federal workers lobbied aggressively for months to stop or mitigate the cuts. They too spent lots of money to execute the tactics outlined above. By allowing the cuts to proceed, Congress ostensibly voted against cancer survivors, researchers, the military, and education. (“the children”) How could this happen?

Again, I was not in the room when each and every conversation occurred, but I know from working with a very diverse client base that the one thing most groups say when they fight any kind of cut or tax to their services or product is to relentlessly tout the advantages of their position and views without much consideration of the merits of their opponent’s position. They don’t admit that there may be some waste in their current programs. They present one-sided arguments, and for a member of Congress who will certainly hear from the other side (Tea Party members at their local Town Hall meetings, for one example) it’s just not persuasive, especially to lawmakers who are undecided or opposed to your position.

Lumsdaine and Sheffield’s research on communications revealed that two-sided arguments are required when your audience is or will be exposed to a conflicting argument, and that emotional appeals do not work as well with better-educated audiences.  You can disagree, but I’d say that most members of Congress are well-educated, in that they have access to tons of information on any subject. In addition, they will hear from the other side.

The Bottom Line: What is your opponent saying that you can agree with? Showing the merits of their position, not just your awareness of it, creates credibility and trust, which paves the way for persuasion. Prepare and articulate your two-sided argument.

The Winners: Context Rules

“To understand human nature, you must appreciate the power of situations.” In his book Situations Matter: Understanding How Context Transforms Your World, author Sam Sommers devotes his book to the unconscious power of situations and how they impact our decisions. Although some may disagree, since the U.S. Congress is still made up of humans, their decision making is also affected by context, which in part explains who won and who lost. Granted, I was not privy to every lobbying interaction and conversation, but from a broad overview, we can see how the context was a powerful persuasion factor in the sequester and budget amendment outcomes.

The Context of a Poor Economy = Victory for the Medical Device Industry

For the winners, the medical device companies had in their favor a bad economy, because they are creating jobs. Minnesota’s device manufacturers employ over 30,000 people, including Medtronic and St. Judes Medical. Medtronic is growing by 9.8% annually, and St. Judes by 6.7%.

I see that the New York Times is experiencing great angst over the medical device industry’s progress. They are shocked that Cook Medical would actually invite the new Congresswoman Cheri Bustos to their facility for a tour of their medical equipment plant.  (Why is it surprising that a group would seek bipartisan support for any legislative initiative? Isn’t that what the public is clamoring for?)

Congresswoman Bustos, a Democrat, stated that “If current laws are holding businesses back from hiring locally, I’m open to looking into ways to improve and fix them.” The Times also was aghast that the device industry was conducting organized “fly-ins” of employees to D.C., like these organizations just invented cold fusion. The “fly-in” is a tactic that has been used by organizations for, oh, the past two decades or so. I know because I speak at those meetings, they are not unusual.

The Bottom Line #1: Today’s economic climate favors the job creators with a positive story to tell.

The Context of an Unfair Playing Field =  Victory for Brick and Mortar Retailers

Retail industry lobbyists achieved a win with bipartisan approval of an online sales tax measure. Republicans and Democrats supported a bill that would allow states to collect sales taxes on goods purchased online within their borders. This is also something I wrote about in Underdog Edge, as we found that the stories from small retailers resonated with undecided lawmakers. The unfair playing field for the “little guy” is especially salient in a tough economic climate.

The Bottom Line: Have you or your stakeholders worked hard, played by the rules, and yet others with less sacrifice are reaping the benefits? We are always receptive to those who play by the rules, but especially in today’s challenging environment, if it’s  true, bang that drum.

A Context with Convert Communicators = Persuasive Communicators

The medical device manufacturers added another persuasive element to their cause by garnering convert supporters for their cause. U.S. Senators Al Franken and Amy Klobuchar of Minnesota, who voted for the Affordable Care Act, and liberal Elizabeth Warren of Massachusetts, support the tax repeal. The Times is shocked and appalled at their behavior, never mind that device manufacturers employ thousands in their state; in Minnesota, they are responsible for 14% of the workforce.  Massachusetts is of course home toBoston Scientific.

The Bottom Line: Organizations that want to win in Washington (and in state capitols and city hall) need to get convert communicators on their side. They are especially persuasive and attention-getting. We discovered this in my research for The Underdog Edge.  Converts know how the other side thinks, and how to appeal to them. Plus, they cause others like them (some Democrats) to think, “They are like me. What caused them to support it? If they supported the tax repeal, can I also support it?”