Technology Leaves Fingerprints on the Stimulus Bill

To rally support for his administration’s economic recovery bill last week, President Barack Obama invited about a dozen chief executives, seven of them from technology and energy companies, to the Oval Office.

Some of their industries’ top lobbyists, meanwhile, gathered in another office where Jason Furman, a top White House economic adviser, delivered a private briefing for groups expected to benefit most from the stimulus bill.

While much of the sprawling $800 billion legislation consists of tax cuts and broad spending increases for existing programs, like $27 billion on highways and $8.4 billion on public transit, the biggest outlay on new initiatives is essentially a technology industry wish list: In the Senate version, about $7 billion for expanding high-speed Internet access, some $20 billion for building a so-called smart grid power network and $20 billion for digitizing health records.

To many on K Street, the stimulus bill was the clearest guide to the new administration’s closest friends in the business world. What oil was to President George W. Bush, some say, clean energy and technology are to the Obama White House.

“We have a president who gets it,” said Dean Garfield, the president of the Information Technology Industry Council, which recently identified the Senate initiatives in a short list of its top priorities.

A close look at the history of the stimulus bill — the first major product of the new administration — shows that the industries that stand to gain most from the proposed legislation were also working to help shape it even before Obama had won the election.

For months, the industry officials had been talking with Obama advisers about how to use taxpayer aid to jump-start the economy while laying the groundwork for both the new president’s and their own goals of building a high-tech infrastructure.

Obama’s advisers say that the administration was only following through on the public promises he made in a campaign that began with a call two years ago to curb America’s dependence on foreign oil and extend broadband access “through the heart of inner cities and rural towns all across America.”

And they emphasized that Obama had taken unusual steps to disclose what those firms were saying, like posting any proposals submitted to the transition on its Web site, in contrast to the Bush administration’s fight to keep secret how fossil fuel company executives shaped its energy policy in 2001.

“Whatever they shared, we put out there so the public could see it,” said John Podesta, president of the liberal Center for American Progress and co-chairman of the transition.

Campaign finance records also show that executives at many of the energy and technology companies that stand to profit from the stimulus bill were also big contributors to Obama’s campaign. His promises about a “smart grid” and universal broadband dovetailed with the dreams of many in the technology industry, as well as allied fields like renewable energy and electric power.

Drawing on renewable energy sources, like wind turbines and solar panels, would be easier with a smart grid that could handle inconsistent electricity production. More energy would lower the cost of running giant computer servers, and because such a grid can send signals in both directions, it would also allow variable pricing for peak hours and could potentially expand the Internet network, as would extending other forms of broadband lines to rural and underserved areas.

And moving health records online would open new markets for digital connections, data storage and consumer services.

“They all converge,” said Christopher G. Caine, vice president for governmental programs at IBM, which is in both the smart grid and health care data businesses. At the transition’s request, IBM prepared a research report concluding that $30 billion in spending this year on the smart grid, broadband access and digitized health records would create approximately 949,000 jobs.

The idea of harnessing such pre-existing proposals to a stimulus package traces back to September 2008, when the financial crisis was worsening and it became clear that a jobs bill could be an early priority if Obama won the election.

Obama advisers including Furman, Julius Genachowski and Austan Goolsbee began soliciting input from the high-tech and alternative energy interests, including General Motors, IBM, Google, the Information Technology Industry Council and the electric utilities’ Edison Institute.

By October, “there was a query that said ‘if you had money to spend on broadband as part of this stimulus, what would you propose?’” said Debbie Goldman, a lobbyist for the Communications Workers of America, which has pushed for greater government spending on broadband.

After the election, the campaign’s policy teams went through their agenda and selected those items that could have a quick start and natural end date to identify candidates for a jobs bill.

“Synergies between our short-term goals and our long-term goals,” David Axelrod, a top adviser to Obama, said in an interview, “that was the sweet spot.”

The transition also sought expert advice, holding conference calls and meetings at its temporary headquarters in Washington with a parade of industry lobbyists and executives from high-tech and clean energy companies from mid-November to early December.

On Dec. 2 for example, Goldman of the communications workers union made a presentation promoting the jobs that would be created by broadband spending. On the same day, representatives of all the renewable energy trade groups sat around a table making pitches to Carol M. Browner, who is now Obama’s energy policy chief.

“It was nice they were having us all in so early,” said Karl Gawell of the Geothermal Industry Association, whose members would benefit from $400 million in grants in the House version of the stimulus bill.

The process reached a climax when members of the economic team flew to Chicago for a Dec. 16 meeting with Obama. The team laid out the structure of the plan — increased spending on infrastructure, education, energy and health care, along with tax cuts, financial aid to states and unemployment and food stamp benefits.

While much of the presentation involved broad themes, Furman said it put special focus on “a number of high-priority flagship details” like the renewable energy and high-tech components. Obama signed off on it, after making a few adjustments.

“The president-elect was particularly interested in the energy component of the plan and pushed for a more robust effort on the smart grid,” Furman recalled.

Three days later — the Friday before Christmas — transition officials met at the Capitol with congressional leaders and staff to present the proposals, which Furman said were couched in the form of “suggestions” by the president-elect.

His team had few staff and relied on Congress to convert their ideas into legislative language. Congressional committees, meanwhile, had been working since November to draft their own version of a stimulus bill, and added their own details to Obama’s blueprint. For example, House Democrats attached privacy protections to measures that promote the online storage of medical records, banning the sale of health data, an idea long pushed by the American Civil Liberties Union.

Garfield of the Information Technology Industry Council said technology lobbyists accepted the privacy rules in a spirit of compromise, in light of the victories they won elsewhere with Obama’s help.

“I won’t say it is great to be the king, because we are not the king,” Garfield said. “But it is good to be heard.”