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     Sep 17, 2009
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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 Obama's sheen, his administration's unflagging confidence, and all the bipartisan, post-racial aspirations have been replaced by the hard realities of Washington politicking.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." 

Continued 1 2 

Gates' budget shakes up the Pentagon
(Apr 8, '09)

Mini-gulags, hired guns and lobbyists
(Sep 28, '06)

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3. Crucial Iran nuclear evidence 'covered up'

4. Gold a hedge and no more - yet

5. Turkey stands at Iran's side

6. Drama in a theater of despair

7. Fifty questions on 9/11

8. Cash down the drain

9. Change? Yes, it can

10. BlackBerry success has sour taste

(24 hours to 11:59pm ET, Sep 15, 2009)


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