Page 1 of 2 DISPATCHES FROM AMERICA A well-oiled influence machine
By Andy Kroll
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 Barack Obama administration feel increasingly like hazy,
gilt-edged memories.
The president's sprawling legislative agenda - a health-care overhaul,
financial regulation reform, slashing wasteful military spending, and climate
change legislation legislation - is slowly
grinding its way through the halls of Congress. 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aspirations have been replaced by the hard realities of Washington politicking.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 February 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 January 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
grassroots 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 advisers, 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 health-care reform. As of mid-August, there were six
lobbyists trying to influence health-care 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 one million dollars 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 television advertisements. Lawmakers up for
election in 2010 have already seen $23 million flow into their nascent campaign
coffers.
And the biggest spenders in health-care lobbying aren't doling out their
largesse to just anyone. Take Senator Max Baucus (Democrat - Montana), the
chairman of the influential Senate Finance Committee, leader of the bipartisan
"Gang of Six" spearheading the Finance Committee's health-care negotiations,
and architect of that committee's much anticipated health-care 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 re-election
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 US into a
parliamentary system, by 48 percentage points.
Senator Chuck Grassley of 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, Democrat Senator
Kent Conrad from North Dakota, 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 health-care debate,
including the Pharmaceutical Research and Manufacturers of America (which
outright opposes the House's promising health-care 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 health-care-related companies and organizations.
Perhaps, then, it's not so surprising to learn that none of the Big 3 - Baucus,
Grassley, or Conrad - back a true public option in health-care 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 health-care 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 non-profit 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' 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 health-care 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 US pharmaceutical
companies alone totaled almost $660 billion in the past half decade, more than
eight times the agreed upon cost savings.
Health care 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 US 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."
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