Lobbying spending hits plateau for first time in a decade

Could the great lobbying gold rush be over?

Last year, for the first time in more than a decade, the amountof money spent on lobbying appears to have decreased. The total willnot be known for a few days, but there are signs that lobbying moneydeclined. At the very least, the once-booming industry's growth hasflatlined.

The lobbying industry has expanded over the past decade at a ratethat rivals the economy of China, with an average increase inspending of more than 8 percent a year, according to statistics fromthe Center for Responsive Politics. Businesses and others lobbyingCongress reported spending $1.4 billion in 1998, a figure that morethan doubled to $3.5 billion in 2009.

But that trend line appears to be shifting: Businesses andadvocacy groups spent $2.6 billion on lobbying in the first threequarters of last year, according to the center. That means that thefourth-quarter total - which the center will release soon - wouldhave to be more than $880 million to exceed last year's sum. Thelast time there was a year-to-year decline was in 1999.

Another signal comes from fourth-quarter reports from majorfirms, which appear to have cut their spending in that period. Thetop 50 biggest spenders in the fourth quarter amounted to a combined$205 million, down from $209 million in the third quarter.

"Obviously it's the economy," said Howard Marlowe, president ofthe American League of Lobbyists, who runs the Marlowe & Co.lobbying firm. "I don't think it's for any other reason than that."

The U.S. Chamber of Commerce, which is consistently the largestspender in Washington, reported a 20 percent drop in expenditures,from $36.4 million in the third quarter to $29.3 million in the lastthree months of the year.

A busy legislative calendar for 2009 and the first part of 2010kept lobbying totals rising even while the economy sank. Democrats'major initiatives to stimulate the economy, overhaul the nation'shealth-care sector and increase regulation of the financial industrywere a huge boon to K Street's revenue.

Lobbying reached a record level - $970 million - in the lastquarter of 2009 as the Senate and the House passed their versions ofthe health-care legislation. (Congress agreed on a final package inMarch of last year.)

"Some lobbyists have found that they needed to reduce their feesin order to keep their clients in tough economic times," Marlowesaid. "Expenditures have decreased because of cost-cutting."

In the past, K Street was often considered recession-proof, basedon the assumption that cutting back on lobbying could further reducea company's bottom line - especially when Congress was consideringmajor bills affecting business.

The change in 2010 could also be linked to the fact that lobbyingreports do not include many of the methods businesses and others useto try to influence public policy, some in the industry say.

Companies and advocacy groups have increasingly relied on grass-roots mobilization or public relations work - strategies that havebeen boosted by the rise of the Internet. Examples from the pastyear abound, including campaigns run by Healthcare for America Nowand Americans for Financial Reform, with both supporting theDemocrats' agenda.

"The sophisticated people with the money are increasingly lookingat these large issue campaigns," said Robert Raben, president andfounder of the Raben Group. "My suspicion is that there has been asteady increase in the use of those tools outside of the directlobbying."

After the passage of the health-care bill, much of the attentionshifted away from Congress to the courts and the regulatory process,where the ultimate fate of the legislation, and its details, will bedetermined. Those activities also aren't required to be reported aslobbying.

"I'm skeptical about reports that lobbying was down," said NickAllard, a lobbyist with Patton Boggs. "I have a sense that publicpolicy and advocacy - lobbying in a broad sense - wasextraordinarily active."

farnamt@washpost.com