A BLIZZARD OF STUDIES

For much of the past year, the Roundtable has been alerting congressional staffers to the problems they believe eliminating tax deferral would cause. Now, along with the Chamber of Commerce, the National Foreign Trade Council, and NAM, they are going into overdrive. The strategy: Make the case with studies showing how competitiveness would be damaged, then bring in CEOs to drive the point home to their congressional representatives.

Already, lobbyists are talking up a paper arguing that U.S. shipping companies such as American President Lines were acquired by overseas buyers when t...

A BLIZZARD OF STUDIES

For much of the past year, the Roundtable has been alerting congressional staffers to the problems they believe eliminating tax deferral would cause. Now, along with the Chamber of Commerce, the National Foreign Trade Council, and NAM, they are going into overdrive. The strategy: Make the case with studies showing how competitiveness would be damaged, then bring in CEOs to drive the point home to their congressional representatives.

Already, lobbyists are talking up a paper arguing that U.S. shipping companies such as American President Lines were acquired by overseas buyers when they lost the right to defer taxes on foreign profits in 1986, a trend that only reversed when the deferral was restored in 2004. In mid-March, the Business Roundtable will release a study claiming that many jobs are gained in the U.S. because of foreign operations. Both will be liberally distributed to Congress and Administration staff. Key targets: conservative Blue Dog Democrats such as John Tanner (D-Tenn.) and Earl Pomeroy (D-N.D.) in the House. In the Senate, Baucus will be targeted. Nor have multinationals given up on the White House: Kies says some believe National Economic Council President Lawrence H. Summers and Orszag "may be possible to persuade." And if a broader campaign is needed, he adds, "the ads have already been written."

Partners in private equity, hedge funds, and venture capital firms are gearing up for what promises to be another explosive tax fight: Obama's pledge to change the rate they pay on the percentage of investment profits they earn on their portfolios, known as carried interest, to the regular income tax rate, rather than the lower capital-gains rate they pay now.

The industry killed a similar proposal in 2007, but this time lobbyists are getting ready for a longer, harder fight. The VCs already have their defensive playbook: Distinguish their breed, which invests in badly needed innovation, from the real estate interests, private equity partners, and hedge funds Obama is targeting. At the same...

Partners in private equity, hedge funds, and venture capital firms are gearing up for what promises to be another explosive tax fight: Obama's pledge to change the rate they pay on the percentage of investment profits they earn on their portfolios, known as carried interest, to the regular income tax rate, rather than the lower capital-gains rate they pay now.

The industry killed a similar proposal in 2007, but this time lobbyists are getting ready for a longer, harder fight. The VCs already have their defensive playbook: Distinguish their breed, which invests in badly needed innovation, from the real estate interests, private equity partners, and hedge funds Obama is targeting. At the same time, they'll underscore the importance of venture capital to the President's quest for technologies to boost lower-cost health care and cleaner energy. "This is just the first pitch in a very long, extra-inning baseball game," says Mark Heesen, president of the National Venture Capital Assn.

PRIVATE EQUITY GEARS UP

Private equity players are practicing their pitch as well. Lobbyists will tell tales of the struggling retirees who depend on private equity's plump returns to pad their public pension funds. "The question is who invests in private equity. It's CalPERS or the pension funds of firefighters," says Moses C. Mercado, managing director of Ogilvy Government Relations, which represents Blackstone (BX) and Carlyle Group. Change those returns, he adds, "and you're changing Grandma's pension from her years as a schoolteacher."

With so much opposition building, is the President's support among business weakening? Obama does win high marks among some executives for decisive lea...

PRIVATE EQUITY GEARS UP

Private equity players are practicing their pitch as well. Lobbyists will tell tales of the struggling retirees who depend on private equity's plump returns to pad their public pension funds. "The question is who invests in private equity. It's CalPERS or the pension funds of firefighters," says Moses C. Mercado, managing director of Ogilvy Government Relations, which represents Blackstone (BX) and Carlyle Group. Change those returns, he adds, "and you're changing Grandma's pension from her years as a schoolteacher."

With so much opposition building, is the President's support among business weakening? Obama does win high marks among some executives for decisive leadership, particularly in pushing through the stimulus package and grappling with the economy's problems. "We're very pleased to see the kind of vigor and discipline that's being brought to bear," says Brad Smith, a senior vice-president at Microsoft. (MSFT) Like many executives, he's happy Obama has pledged to make the research and development tax credit permanent and to pour funds into education. There are clearly areas of common ground. But in health care, energy, manufacturing, and other industries, the battle is already joined.