Background
Most Americans don’t understand that the government affairs industry changed dramatically when earmarks were banned in 2011. With the best of intentions, the Obama Administration led this initiative in Congress to eliminate what was commonly known as “pork barrel spending” because America had not balanced its national budget since the Clinton years.
The purpose of banning earmarks was to fund agencies directly, increase transparency in the federal funding process, and eliminate “quid pro quo” arrangements between traditional lobbyists and Members of Congress.
Almost fifteen years later, this change has completely transformed the government relations industry—arguably making “lobbying” obsolete.
At Shepherd Strategies, our leadership has capitalized on this market disruption for the past decade, creating data-driven growth opportunities for clients by dealing in the “art of the possible.” At the same time, we continue to see many traditional lobbyists relying on earmark strategies from the last decade. Our desire to protect businesses, nonprofits, government, and individuals from these predatory practices led us to name our firm Shepherd Strategies.
We believe that in a world of “sheep and wolves,” it is our duty to be the Shepherds.
The purpose of this analysis is to articulate transitions in the government affairs industry over the past 20 years, and suggest how business, community, and government leaders can navigate the future.
Prior to earmark bans in 2011, the McCain Feingold Act (“McCain Feingold”), also known as the Bipartisan Campaign Reform Act, imposed the most sweeping regulatory changes the industry had ever seen. Signed into law by President George W. Bush in 2002, this historic legislation professionalized federal “lobbying,” defined the industry, sought to eliminate political donations for “quid pro quo,” and created the Federal Election Commission (FEC) to enforce compliance measures.
Today, political and legal scholars commonly question the outcomes of McCain-Feingold, particularly the creation of political action committees (PACs) and the rise of “bundling” political donations. Regardless, McCain-Feingold, by intending to curb political “quid pro quo,” drove more “soft money” donations throughout the industry, leading earmarks to increase by over 300% in just three years (from about 4,100 prior to McCain-Feingold, to over 14,000 in 2005). The rise of earmarks during a short time cost taxpayers tens of billions of dollars, leading to difficult budget measures. Ultimately, famous scandals like the “Jack Abramoff Scheme,” “Bridge to Nowhere,” and the “Cunningham Scandal” occurred during this time – giving lobbyists a bad name and expediting earmark reform.
Before 2011, lobbyists would work with clients to complete applications for earmarks; thousands of measures per year would pass with “pork barrel” spending for clients. This forced legislators to reach out across the aisle within their respective states to make political and policy deals that would benefit their voters. Members were judged by the ability to bring results and opportunities back to their states. Region, state, and city officials were incentivized to behave in a bipartisan manner with earmarks at stake.
Regardless of the goals associated with ending “earmarks” in 2011, federal budget spending has doubled, and twice as much money is now given to states, local, and federal government – as well as business and non-profit – through grants, loans, tax breaks, and government sales. Federal agencies are allocated appropriations to distribute at all levels, and government relations firms now must help secure funding for clients through grant and sales processes, which are more about standards and accuracy than political relationships. Not only has the shift of funding to agencies changed practices for securing government funding, but it has also reduced the need for lobbyists to navigate the federal regulations tied to the vast amounts of money agencies receive. Ultimately, the decline of traditional legislation has led to a surge in regulation.
Funding for business and non-profit can be secured at the state, local, and federal levels, through direct applications with federal agencies, or following the path of funding to the community.
Government relations experts must be able to read budgets and complete government registrations and applications, rather than be experts on the social scene.
Bipartisanship is key to secure funding that is already allocated – as agency employees, state, local, and federal elected officials all have a role in the process and can be from multiple parties.
Monitor and regard regulations just as much as legislation, because it is tied to the flow of this federal money and its allocation at all levels of government.
Work with industry experts, versus generalists, so that your applications and policy positions are clear and actionable to agency leaders and decision-makers.
Know your entity’s past performance and actual capabilities in the eyes of government, to have realistic expectations about outcomes.
Engage the government with a goal, plan, and purpose; focus on a specific outcome or objective.
Regard compliance seriously at all levels of government.
Learn the “art of the possible” with government funding and pursue what is already available.
Understand the realistic timeline for your government affairs goals.
The best recipe for success to secure government funding is to follow market data, and combine accurate and effective applications with genuine political relationships.
The following comparison summarizes the transformation of the government affairs industry before and after the 2011 earmark ban.
| Government Affairs Industry Trends | Before the 2011 Ban | After the 2011 Ban |
|---|---|---|
| Overall Lobbying Spend | Hovered around $3-4 billion with steady types of clientsBroke | Broke the $5B mark in 2025 with the rise of “mega firms” |
| Power Over Government Finance Allocation | Capitol Hill | Executive Branch |
| Target for Lobbying Engagement | Legislative branch & appropriations committees | Executive branch & regulatory agencies |
| Mechanism for Action | Legislative text inserts (“pork”) | Competitive grants & agency contracts |
| Industry Leader Skillset and Background | Relationship-driven political access | Technical compliance & grant writing |
| How to Achieve Return on Investment | Secure an earmark for a client | Sell to government, secure a loan, grant, or tax credit for client |
| Client Base | Towns, public universities, small defense firms | Large corporations capable of competing nationally |
| Bills Passed Per Year and Signed Into Law | 400-600 | 200-300 (less than the Great Depression) |
| Internal Congressional Reactions | Legislative “lubricant” to collaborate and “bring home the bacon” to states – work as a state or regional delegation outside of party lines | Rely on big omnibus bills for legislative changes and action, rather than bipartisan cooperation |
| Code of Federal Regulations (CFR)Around | Around 170,000 pages | Around 200,000 pages, with 1.08M new restrictive clauses embedded |
| Political Spending (annually) | $574M annually | Over $4.5B annually |
| Federal Outlays | $3.5T | $7T |
| Formula-Based Grants to States | $500M annually | $1.1T annually |
Before you invest in a pricey, long-term lobbying plan, let Shepherd Strategies provide a free 30-day market assessment of your government opportunities.
Let Shepherd Strategies provide you with the market data and actionable intelligence needed to grow your market share and capitalize on sustainable government opportunities nationwide.
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