Hollywood took a $3.5 billion hit at the hands of the Bushies with last year’s tax reforms, and some claim Republicans acknowledged they were intentionally targeting Hollywood. Now, showbiz has a chance to regain some lost ground.
Increasing fractiousness within the Republican camp presents a golden opportunity for the industry to press its agenda, especially if it can tailor its message and enlist a few heavyweights.
But it won’t be easy.
The K Street Project, a coalition that works to put Republicans and GOP supporters in top lobbying jobs, remains a formidable force. Republicans consider it a benevolent society. Democrats shudder that it’s a strong-arm outfit seeking to extend GOP influence over all matters of government.
Before the 2004 election — when Republicans held only a slight majority in the Senate — the GOP and its allies projected a rigid uniformity, speaking one message with one voice. Now, with more seats in Congress, they are less uniformly doctrinaire.
Just last month, at a symposium on the future of conservatism, nearly two dozen leading Republicans and their supporters openly differed on a variety of issues that generally unite conservatives. Grover Norquist, a prominent member of the K Street Project, actually argued against those who called for the government to “clean up” movies, television and music.
For the first time in four years, Hollywood has more chances for its economic message to be heard in Republican Washington.
And that message is a quintessentially Republican story: Showbiz is self-sufficient, with no need for government funding, and it’s America’s second-biggest export, carrying the banner of America to all our little friends overseas. What could be more flag-waving than Hollywood?
Perhaps no one is more aware of this irony than Rep. Mark Foley (R-Fla.), chairman of the House Entertainment Caucus and a lonely GOP supporter of the industry.
“Whenever I’ve tried to bring up the strong export and revenue and employment issues about Hollywood with my colleagues,” he says, “they always bring up Michael Moore, Whoopi Goldberg and Barbra Streisand.”
That could change if the industry starts telling its economic story — and not just through the MPAA.
“Bring someone like Steven Spielberg to Washington to talk on C-SPAN about employment and revenues that Hollywood generates,” says one GOP lobbyist. “And bring a star to sign autographs for Republican staffers. That kind of stuff goes a country mile in this town!”
Another lobbyist advises that Sumner Redstone and Rupert Murdoch — both Bush supporters — should come to town.
The industry has good fiscal reason to start building or repairing relationships with Republicans. After reforming Social Security, the Bush administration plans to rework the tax code. Some taxes will go down, but to offset revenue loss, other taxes will go up.
“When it comes to tax reform,” says a third lobbyist who specializes in tax issues, “you don’t want to be an industry disfavored by the party in power. You’ll end up a loser.”
And Hollywood needs to work hard to gain lost ground. Last year, the House and Senate went to conference over bills meant to compensate businesses that would be affected by the impending elimination of export subsidies.
Hollywood’s compensation amounted to about $1.5 billion on a loss of $5 billion, leading to a net loss of $3.5 billion — “the highest of any industry,” the tax lobbyist says. “It was no accident.”
Republicans had exacted retribution for what it perceived as insults from showbiz, such as stars’ vocal liberalism and support for John Kerry and the MPAA’s selection of Dan Glickman — a Democrat — as its new topper.
The K Street Project and its influential congressional allies — notably Sen. Rick Santorum (R-Pa.) and Rep. Tom DeLay (R-Texas) — perceived the Glickman hiring as an insult having expected the MPAA to hire one of their own to replace Jack Valenti.
The org did sound out Billy Tauzin, but the Louisiana Republican ended up taking a lobbying job with the pharmaceuticals industry.
But, as the tax lobbyist puts it, “There was more than one Republican in Washington.”
Last year, Hollywood didn’t fully realize how much it stood to lose by not paying attention to an increasingly powerful Republican party in Washington. This year, the industry has a chance to gain.
The question is: Will Hollywood recognize these opportunities and take advantage of them — or miss them and find the government’s hand scooping up yet more industry profits?