2. The K Street fiscal cliff war rooms:
It now seems clear that there will be some sort of deal to avert the fiscal cliff. It will probably start with a general agreement in principle: To raise revenue, tax rates will go up a bit for the wealthiest and loopholes will be curtailed, while outlays will be reduced through expense cuts to Medicare and Medicaid as well as other programs.
That’s when the reporting will have to shift from speculation about the negotiation to pinning down who’s doing what and why.
Editors and TV news producers trying to figure that out should be pushing reporters to get as much as they can from inside the war rooms set up for occasions like this by lobbyists up and down K Street. What are the lobbyists’ clients — be they oil producers, hospitals, teachers unions or defense contractors — most focused on and why?
Sure, we know the AARP is going to fight cutbacks in Medicare and will rely on its usual allies among Democratic liberals. But what about the finer details that are K Street’s bread and butter? Are hospitals worried about changes in Medicare penalties for outlier infection rates or patient readmissions, both of which could be levied under the guise of Medicare savings? Is the urologists’ lobby (yes, there is one) worried about changes in Medicare reimbursement policies for prostate cancer tests whose efficacy has lately been called into question? Are the CT and MRI medical imaging companies, like General Electric, gearing up to fight Medicare savings derived from possible restrictions on the cost and use of their equipment?
Is there some obscure language in the tax code that the oil industry wants to preserve even if killing some broader oil tax loophole has been advertised as part of the deal?
Which contract is which defense contractor most worried could be collateral damage when the i’s are dotted and the t’s are crossed in any provision for defense cuts?
The headlines will probably say that the “carried interest” loophole — the one that allows partners at private equity firms to be taxed on their pay as if it is a capital gain on investment income even though they haven’t invested anything — has been eliminated. But are there lobbyists working on some language that would open up another loophole?
For serious journalists, the real work of covering the fiscal cliff begins after the deal is announced.