Issues

The Perils of Lobbying


By Tom Pavone, University of Chicago

A long time ago, in what may seem like a galaxy far, far away, the Founding Fathers gathered in Philadelphia to replace the Articles of Confederation with the Constitution of the United States. Included within the Constitution were ten amendments, the Bill of Rights. And in the very first amendment lies the right to petition the government. In modern terms, that means the right to lobby.

The justification for lobbying can be found in the writings of James Madison, who in Federalist No. 10 addresses the issue of how to guard against factions, especially against what he, and others before him, termed the “tyranny of the majority.” When the Founders included the right to petition in the First Amendment, the main purpose was indeed to provide a means for minority groups to influence policymaking, thereby preventing the majority from oppressing them and denying them rights.

But it’s 2011 now, and much has changed since 1787.

It’s not that lobbying has gone out of fashion; on the contrary, there are currently over 17,000 federal lobbyists in Washington, or roughly 32 for every member of Congress.

What has changed is who is doing the lobbying.

Over the past three decades, income inequality has reached unprecedented levels. In 2010, during the worst recession since the Great Depression, U.S. corporations held $1.93 trillion on their balance sheets, the highest level in recorded history. In the same year, the average Fortune 500 CEO received an average of $11.4 million in total compensation, a 23 percent increase since the year before. Clearly, even in the worst of times, when the poor and marginalized are most in need of help, the lobbying power of the wealthy elite is increasing exponentially.

According to Open Secrets, between 1998 and 2010, lobbying groups have spent well over 25 billion dollars in their quest to influence policymaking. If Madison’s model had been adopted in practice, we should see groups representing African Americans, Latinos, the LGBTQ community, and other marginalized groups making up the largest share of the expenditures. These are, after all, the minorities which are most at risk of being oppressed by the majority.

But these aren’t the groups that are spending the most in Washington.

No, the number one group falls under the category of Finance, Insurance, and Real Estate. Its expenditures over the last twelve years? Over 4.2 billion dollars. The silver medal goes to the health insurance sector, which has also spent over 4 billion dollars. One has to get down to eighth place before some form of marginalized group lobbying begins to appear, namely under the category of Ideological/Single Issue lobbying, which has spent just under 1.5 billion dollars since 1998. But we must remember that many of these expenditures include groups that aren’t being marginalized, such as gun rights advocates, so the actual expenditures by marginalized communities is likely to be much smaller.

Perhaps these numbers begin to shed light upon why financial regulations were so loose in the years leading up to the Great Recession. It may explain why we still, despite the reforms undertaken under the Obama Administration, remain the only advanced democracy without a universal healthcare system. It may explain why income inequality is increasing, why women still earn less than men and hold fewer high level positions in corporations and in government, why racial segregation is as severe now as it has ever been, and why we are one of the last democracies to provide no form of federal recognition for same-sex couples. After all, how are teacher’s unions, gay rights advocates, and the NAACP supposed to compete with the financial resources of Goldman Sachs?

The truth is that lobbying is indeed protecting a minority, but that minority is made up of the richest individuals and corporations. And these elites are able to hire more lobbyists who, in some cases, draft the very legislation that the Congress passes almost verbatim.

A recent example of the lobbying power of the rich can be seen in this summer’s debt limit and budgetary negotiations. All proposals, including President Obama’s, largely sought to move toward a balanced budget by cutting entitlement programs such as Medicare, Medicaid, and Social Security—all without raising taxes for the rich. The Republicans even went so far as to oppose closing tax loopholes for corporations, even as they advocated trillions of dollars of spending cuts for programs benefitting the poorest and most needy of Americans. When money talks, this is what happens to business as usual in Washington.

So what can we do about it?

One option is to ban lobbying altogether, and until recently I was strongly in favor of this initiative. But I’ve recently reconsidered this option. Why? Because banning lobbying would simply mean that money would be exchanged in the dark, under the counter, through illegal means, and without our knowledge. A good example is that of Italy, where lobbying is illegal but corruption is pervasive. Powerful and wealthy interests will always seek to buy politicians, whether the practice is legal or illegal, so my view is that it’s best to keep the practice legal but to regulate it heavily so it remains within our control.

But given that the Congress has passed lobbying reform dozens of times in the past few decades, it might seem that further regulation would be unnecessary. Even President Obama, who has been an outspoken critic of our lobbying practices, was one of the chief architects of the 2006 Legislative Transparency and Accountability Act, which sought to impose more stringent regulations on lobbyists. But this was not landmark reform as the President often touts it—the loopholes within it are egregious.

Take, for example, what many considered to be its greatest reforming measure: that individual lobbyists would no longer be able to provide gifts or free meals for members of Congress. That’s all good and well, but the Act provided no such restriction for corporations. So while Goldman Sachs’ lobbyists can no longer buy John Boehner a free meal, Goldman Sachs itself still can. And since lobbyists are nothing more than representatives of their special interest patrons, is it really too much to ask if anything has really changed?

And while the Act really does provide greater transparency for the lobbying process, the problem isn’t that the process is not transparent. It’s that the lobbyists representing the rich and powerful are crowding out the lobbyists representing the weak and marginalized. In other words, it isn’t enough simply to make the process transparent if the structure remains the same.

In my view, true lobbying reform has to include a provision to cap expenditures so that it can level the playing field. We must end the days where financial institutions can spend hundreds of millions of dollars yearly to write their own regulations. This would ensure that the Goldman Sachs lobbyist can no longer cut in line in front of the Freedom to Marry and NAACP lobbyists. In short, it would make sure that all lobbyists are created equal, and that structural reforms are undertaken instead of the measly aesthetic reforms of the 2006 congressional Act.

Over the coming years as income inequality continues to grow, the influence of the powerful minority is certain to increase if the status quo isn’t changed. In the absence of true lobbying reform, it may very well soon be that those 17,000 lobbyists in Washington become more powerful than 300 million Americans, assuming they aren’t already. So much for the so-called “tyranny of the majority.”

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About NEW STUDENT UNION

The New Student Union is an online magazine run by and for college students covering the issues we care about. Self-starters with great communication skills and a passion for writing should email info@newstudentunion.com to get involved. Official site will launch in late 2011.

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Trackbacks/Pingbacks

  1. Pingback: Fear and Loathing in Lobbyland « The New Student Union - August 7, 2011

  2. Pingback: Fear and Loathing in Lobbyland | The New Student Union - October 13, 2011

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