Very well-sourced essay on how special interests continue to legislate in Washington, despite the promises of President Obama and his Party...
Sep. 17, 2009 |
At the end of this summer of discontent, of death panels and unplugging poor Grandma, of Birthers and astroturfers and rifle-toting picketers,
the halcyon early days of the Obama administration feel increasingly
like hazy, gilt-edged memories. The president's sprawling legislative
agenda -- a healthcare overhaul, financial regulation reform, slashing
wasteful military spending, and climate change legislation legislation
-- is slowly grinding its way through the halls of Congress. Barack
Obama's sheen, his administration's unflagging confidence, and all the
bipartisan, post-racial aspirations have been replaced by the hard
realities of Washington politicking. And with the media's lens more
tightly focused than ever on Washington's every move and utterance
24/7, anything said a few months back feels like a lifetime ago.
One particular statement from distant April, however,
bears revisiting. The president's chief of staff, Rahm Emanuel, then
grasped not only the magnitude of what was being undertaken, but the
raft of entrenched interests lining up in opposition. As he told the New York Times:
We're not taking on a fight; we're
taking on a multiple-front fight because we've taken on a series of
entrenched interests across the waterfront -- from education to health
care, and the defense industry, and the lobbying industry as a whole …
There will be a scorecard at the end of which ones we won and which
ones we didn't, but every one of those policy challenges have been
initiated by us.
Never short on chutzpah, Emanuel made it clear: it was Us
vs. Them in a "multiple-front fight." A "scorecard at the end" would
determine winners and losers. As a candidate on the campaign trail,
Obama himself regularly decried the undue influence of moneyed
interests and lobbyists. Announcing his candidacy on Feb. 10, 2007, for
instance, he declared
it "time to turn the page" on the "cynics, and the lobbyists, and the
special interests who've turned our government into a game only they
can afford to play." And on Jan. 21, 2009, the very day he came into
office, Obama issued
one of his first executive orders aiming to limit the influence of
lobbyists in the new administration. He planned to "close the revolving
door that lets lobbyists come into government freely, and lets them use
their time in public service as a way to promote their own interests
over the interests of the American people when they leave."
The new White House stood confident in those early months
that it could take on "K Street" -- a street in the capital notorious
for the density of its lobbying firms as well as Washington shorthand
for their growing ranks. Tallied up today, however, the
administration's seven-month scorecard tells a different story. Just as
sweeping as the administration's packed domestic agenda has been the
sheer force with which the lobbying industry and its clients have
fought back, blocking, maligning or undermining its progress. In a
Washington version of Newton's third law,
the president's actions and those of his allies in Congress have
elicited an equal and opposite reaction from opponents -- inside the
Beltway and beyond it.
Spending eye-popping sums of money, deploying armies of
lobbyists, dispatching grass-roots foot soldiers as agents of
disruption, the special interests have fought fiercely to derail the
White House reform agenda. It's now apparent that Obama and his
advisors, including Rahm Emanuel, underestimated their strength. Even
if Congress were to move in all four areas targeted for reform, the
concessions already made, the softening of prospective regulations and
restrictions, would likely signal a series of genuine victories for
those special interests.
What does it mean when an intelligent, ambitious and
well-liked president, who broke through one of the nation's most
glaring racial barriers and enjoys majorities in both houses of
Congress, can't overcome the deeply rooted interests that now seem
thoroughly embedded in the American political system? A look at the
unprecedented opposition to Obama's plans reveals why Rahm Emanuel
might want to pocket that scorecard.
An opposition that knows no limit
The sheer presence of lobbyists cannot be underestimated.
Case in point: the legislative battle over healthcare reform. As of
mid-August, there were six lobbyists trying to influence healthcare
legislation for every single member of the House and Senate, Bloomberg
News reported.
That's 3,300 lobbyists working on a single issue (three
times the number of defense lobbyists) with nearly three new lobbyists
joining the fray each day. So far this year, $263 million
(or more than $1 million a day) has been shelled out just for lobbying
health-related issues, according to the Center for Responsive Politics.
Industry players have waged war to sway public opinion, spending
$75 million on TV ads. Lawmakers up for election in 2010 have already
seen $23 million flow into their nascent campaign coffers.
And the biggest spenders in healthcare lobbying aren't
doling out their largesse to just anyone. Take Sen. Max Baucus,
D-Mont., the chairman of the influential Senate Finance Committee,
leader of the bipartisan "Gang of Six" spearheading the Finance
Committee's healthcare negotiations, and architect of that committee's
much anticipated healthcare legislation. He's also one of the top five
recipients of health industry-related money in Congress, pocketing $2.9 million in his career. For his 2008 reelection campaign, the unassuming Baucus took in
$1.2 million from health industries, $690,050 of which came from
health-related political action committees, the most for any Washington
politician. Not that the six-term senator needed it: He steamrolled his
opponent, an 85-year-old serial also-ran who'd lost 14 elections in 44
years and campaigned on a platform to turn the U.S. into a parliamentary system, by 48 percentage points.
Sen. Chuck Grassley, R-Iowa, the ranking Republican
member of the Finance Committee, not surprisingly ranks among the top
recipients of health-related money as well. He's received
$2.1 million from health industry players. And yet another Senate
Finance Committee member and Gang of Sixer, Sen. Kent ConradD-N.D., has
likewise enjoyed a steady flow of donations to his political action committee from lobbyists working for the pharmaceutical and health-insurance industries.
Loosening up lawmakers with lobbying and campaign
donations is one way in the door; having worked for them doesn't hurt,
either. According to the Sunlight Foundation, five former Baucus
staffers -- two of whom are former chiefs of staff -- now lobby or work for major players in the healthcare debate, including the Pharmaceutical Research and Manufacturers of America (which outright opposes
the House's promising healthcare legislation that includes a public
option) and drug makers Wyeth, Merck and AstraZeneca. Similarly, all
but one of the Finance Committee's 10 Republican members have ties to
former staffers now lobbying for healthcare-related companies and
organizations.
Perhaps, then, it's not so surprising to learn that none of the Big 3 -- Baucus, Grassley or Conrad -- backs a true
public option in healthcare legislation, arguably the only way to keep
insurers honest, ensure competition, and lower costs. Before the August
recess, Democrats had hoped Grassley might come on board with
healthcare legislation, giving the Obama administration the bipartisan
imprimatur it sought. Grassley had other ideas, and spent his recess propagating the myth that the House was trying to "pull the plug on Grandma." He was even more forthright in a fundraising letter, declaring, "I am and always have been opposed to the Obama Administration's plans to nationalize health care. Period."
Baucus and Conrad, meanwhile, back a nonprofit co-op model,
a pseudo-public option that, while successful in a handful of settings
nationwide, would, most experts believe, likely fail dismally in any
competition with heavyweight private health insurers. Indeed, an early
outline of Baucus's long-awaited legislation lists Elizabeth Fowler,
the senator's chief health aide, as the apparent author; Fowler, it
turns out, formerly worked as an executive for Wellpoint, a big-time
health insurer that -- you guessed it -- opposes a true public option.
Nor has the White House withstood the pressure of the
deep-pocketed health industries. Before the August congressional
recess, Health and Human Services Secretary Kathleen Sebelius broke new
ground, declaring that a public option was "not the essential element"
of a healthcare overhaul. By then, the Obama administration had already
made its "secret," backroom deal
with top drug company representatives. In exchange for early support
for its reform agenda, the White House agreed to limit how much (via
drug price negotiations and industry rebates) Big Pharma would have to
decrease the cost of its products, now borne by taxpayers, to $80
billion over 10 years. The deal was a coup -- for the drug makers.
After all, the total sales of the top five U.S. pharmaceutical
companies alone totaled almost $660 billion in the past half decade,
more than eight times the agreed-upon cost savings.
Healthcare may be the most striking example of what's
been going on in Obama-era Washington, but this sort of lobbying
onslaught actually extends to Obama's whole agenda. Almost 2,400 lobbyists are, for instance, working on financial industry-related issues like the White House's proposed financial-regulation and consumer-protection reforms. Influential players, among them the U.S. Chamber of Commerce and Business Roundtable, have already spent a staggering
$222 million on lobbying in just the first half of 2009. The Chamber of
Commerce, in particular, ranks first this year in finance-related
lobbying (total spending: $26.2 million; total number of lobbyists
employed: 167). A senior director for the Chamber of Commerce, which
vehemently opposes a White House-proposed Consumer Financial Protection Agency
that would consolidate authority over credit cards, mortgages, loans
and other consumer products into one centralized regulator, pulled no punches in a comment offered to Reuters: "We are working to kill the bill."
In fact, Wall Street's lobbying battle against increased
financial regulation has been so powerful and smothering that, one year
after the financial crisis began, plenty of experts already foresee
future crises like the one in our not-so-distant past. Of the mega
banks on Wall Street, MIT professor and former International Monetary
Fund chief economist Simon Johnson says, "They will run up big risks, they will fail again, they will hit us for a big check."
On the Waxman-Markey climate bill, the first in U.S.
history to tackle global warming, opponents have thrown everything but
the classic kitchen sink at lawmakers to persuade them to drop their
support. One of the heaviest hitters, the American Coalition for Clean
Coal Energy (ACCCE), an umbrella advocacy group representing mining,
coal, manufacturers and other energy interests, has spent nearly $12
million since 2008 lobbying against climate change efforts. But the
2,800 lobbyists weighing in on the Waxman-Markey bill in Washington --
more than 75 percent representing industry interests -- are only the
tip of a rapidly melting iceberg.
The American Energy Alliance, headed by oil lobbyist Thomas Pyle, has hit the road
with its "American Energy Express" bus tour visiting county fairs,
horse shows and baseball games in coal-friendly Midwestern and
Appalachian states, claiming that Waxman-Markey is actually a national
energy tax that would eliminate jobs. The ACCCE has also hired a firm specializing in astroturfing
-- that is, in creating or funding phony grass-roots organizations or
networks -- to put together "America's Power Army," a 225,000-strong
volunteer network to spread misinformation at the town-hall meetings of
congressional representatives and other forums.
The anti-Waxman-Markey warfare reached a new low when one
sleazy D.C. lobbying firm, showing the lengths to which opponents will
go, fabricated letters opposing the bill and sent them to members of
Congress. A congressional investigation found that Bonner and Associates, a specialist in grass-roots/astroturf campaigns working for ACCCE, forged
more than a dozen separate letters and sent them to Rep. Tom Perriello,
D-Va., and several other congressmen. The purported authors of the
phony letters ranged from an American veterans' organization and the
American Association of University Women to a Hispanic advocacy group,
Creciendo Juntos, and the NAACP. But their message was the same: Fight
Waxman-Markey, it will cost us jobs.
The F-22's false promise
In April, Defense Secretary Robert Gates signaled
the Obama administration's new philosophy on military spending by
announcing an array of notable budget cuts intended to curtail or
eliminate some of the unsuccessful or unnecessary weapons systems that
litter the Pentagon's bloated budget and reflect the previous
administration's military excesses. "We must reform how and what we
buy," Gates explained, "meaning a fundamental overhaul of our approach
to procurement, acquisition and contracting."
In Gates' crosshairs were projects like the F-22 Raptor
jet fighter, a Cold War relic that's run wildly over-budget and never
flown a mission in Iraq or Afghanistan; the VH-71 presidential
helicopter, which Obama specifically insisted he didn't want or need;
the C-17, a transport plane Gates said the country already had enough
of; and the Army's lackluster Future Combat Systems modernization
program, the brainchild of former Defense Secretary Donald Rumsfeld.
After years of excessive military spending, Gates' plan to trim these
wasteful projects (though, sadly, not the defense budget
in toto) potentially presented a stark change of fortune to defense
contractors and corporations accustomed to the beneficence of
Washington's lawmakers.
In response, the defense industry and its lobbyists
mobilized. Six months later, as new defense legislation staggers
through Congress, just north of 1,000 defense-related lobbyists are
hard at work. This year $62 million has been spent on Pentagon lobbying
efforts. In particular, Lockheed Martin, the F-22's main manufacturer,
has sunk almost $7 million
into lobbying in 2009, in part through a campaign targeting lawmakers
with F-22 manufacturing sites in their states, while extolling the
number of jobs an F-22 program would create. Lockheed even launched a faux-grass roots Web site, PreserveRaptorJobs.com, to drum up public support for the plane. (It has since been taken down.)
Obama, however, stood firm. Even after House lawmakers tried to restore
F-22 funding, the president insisted that he'd veto any bill with more
of the planes in it. This was made crystal clear in a "Statement of
Administration Policy" (SAP) on the House defense appropriations bill.
The plane's loyal supporters like Sen. Saxby Chambliss, R-Ga., and Rep.
John Murtha, D-Pa., got the message and left the F-22 on the cutting-room floor.
But the question remains: How pyrrhic was the
administration's F-22 "victory"? Gates has, as a start, agreed to order
four more of the useless F-22s at a cost of $351 million
a pop -- they are included in the 2009 supplemental defense bill -- and
he plans to more than double the future run of F-35 Joint Strike
Fighters, a cumbersome, accident-prone, prohibitively expensive plane like the F-22. It will surprise no one that the F-35 is also made by Lockheed
-- and it is easy to imagine that the F-35 commitment could, in fact,
have been a corporate trade-off for the lost F-22, which Lockheed still
hopes to sell abroad with the Senate's help.
And what about those other projects eyed by Gates: the
VH-71 helicopter or the C-17 transport? The Obama administration, by
all evidence, seems to be wilting in its defense of their termination.
(That the second most powerful Pentagon official, William Lynn, is a former lobbyist
for defense contractor Raytheon undoubtedly doesn't help.) The same SAP
with the F-22 veto is noticeably softer on the VH-71, saying only that
"the President's senior advisors would recommend that he veto the
bill," but stopping short of insisting that the helicopter must go. As
for the C-17, any kind of administration recommendation is MIA in the
SAP.
"Gates and Obama got tough on the F-22, and in Congress
the porkers backed off, and Murtha even took the F-22s he had in his
bill out," Winslow Wheeler, director of the Straus Military Reform
Project at the Center for Defense Information and a former Capitol Hill
staffer for three decades, told TomDispatch. "But in the same bill,
Murtha also packed in more C-17s, more presidential helicopters, more
F-35 engines, challenging Gates and Obama. They need to understand that
they need to put up a fight."
If not Obama, then who?
Rahm Emanuel knew back in April that the administration
was entering the ring, but how ready have Obama and his team been to
duke it out on all fronts? On paper, Obama has appeared ready enough.
In his moving address
to Congress last week, for instance, he not only emphasized the need
for a public option in healthcare reform, but directly debunked the
"bogus claims" being used to attack his healthcare reform vision.
His actions, though, have been less reassuring. While
committing his administration to the Afghan war, the president has
appeared unwilling to fight defense boondoggles down the line, as he
did in the case of the F-22, and he's been less than forceful in
defending sorely needed financial reforms -- like those for the $592 billion over-the-counter derivatives market -- in the face of Wall Street's lobbying clout.
Once again, this isn't entirely surprising: For all the
talk of the flood of small, individual donations to Obama's historic
2008 election campaign, its coffers overflowed with money from
financial powerhouses like Goldman Sachs and JPMorgan Chase and
corporations like General Electric, Google and Microsoft. According to
the Center for Responsive Politics, Obama still ranks near the top
among all recipients when it comes to contributions from the health, defense, financial and energy industries.
The same goes for Obama's staff. In an interview with
Politico.com, Bill Moyers put it vividly. "I think Rahm Emanuel, who is
a clever politician, understands that the money for Obama's reelection
would come primarily from the health industry, the drug industry and
Wall Street, and so he is a corporate Democrat who is destined,
determined that there would be something in this legislation," Moyers
asserted, that will appease those powerful interests.
If the president's sprawling agenda has revealed
anything, it's the extent to which private industries and their foot
soldiers on K Street and Capitol Hill influence -- and in some cases
dictate -- American policymaking. Right now, about 12,500
federally registered lobbyists make their trade in Washington, but
believe it or not, they're only a small slice of the pie. James
Thurber, director of the Center for Congressional and Presidential
Studies at American University, tells TomDispatch that the number of
people in the political advocacy business who aren't registered -- the
astroturfers, public relations firms, and strategy groups, among others
-- number anywhere from 90,000 to 120,000. Conservatively speaking,
that adds up to 168 influence peddlers for every member of Congress.
Now you know the players. The teams, uneven as they may
be, are on the field. So take out that scorecard. Beating the
Washington influence machine, flush with cash, amply staffed and
relentless in its mission, will be no small feat for Obama's team. And
if they fail, then it will be possible to say that no matter who's
voted in, it's the influence machine that rules Washington.