How the Obama Administration Empowers Lobbyists

Peter Suderman | August 3, 2009

In news that should surprise no one, it turns out that Obama's proposed overhaul of the nation's health-care system has not reduced the influence of health-care industry lobbyists in Washington, as he promised during last year's campaign, but, instead, made their business even better.  

The Wall Street Journal reports that, although overall expenditures on lobbying in the nation's capitol are down very slightly—about 1%, which suggests that lobbying has hardly suffered in the midst of a massive economic downturn—spending on lobbying in the health care and energy sectors is up. The drug industry, in particular, has swelled its spending by about 13 percent, with Pfizer increasing its spending by a whopping 82 percent from the same quarter last year. 

As the Politico notes, smaller firms in and around the health-care industry are spending more, too, and this quote makes the reasoning exceedingly clear:

"Health care reform has created this situation," explained NADP Executive Director Evelyn Ireland. "We would not otherwise be [lobbying] this year - we would be focused on education and research."

In other words, thanks to Obama's planned health-care overhaul, for health-care lobbyists, business is booming—and in some cases, at the expense of education and research. 

In part, this has been the explicit strategy for liberal health-care reformers: Rather than have major industry players spend their lobbying dollars opposing reform, as they did during the aborted HillareCare effort in 1994, the idea has been buy off the wealthiest players with various concessions. Industry, then, merely has to decide whether they think their money will go further either opposing legislation or, instead, accepting concessions, taking a seat at the table, and negotiating the details. 

I'm not exactly a fan of rent-seeking, but I hardly think businesses (or lobbyists) are particularly to blame for this sort of behavior. When the president and Congress decide it's time to rebuild the entire framework by which an industry does business, you can hardly expect them to sit idly by as their livelihoods are manhandled by the federal government. That's especially true when the plan is to turn more decision-making power over to the government: The more Washington stands to pick winners and losers in a particular sector of the economy, the more that industry will spend its money there. 

Reason's Ron Bailey wrote about the corporate welfare buried in cap-and-trade legislation here, and noted how the Podesta family has benefited from energy lobbying here. 

Comments

|8.3.09 @ 3:34PM|#

I am curious just what type of "education and research" tha national association of dental plans does?

Anonymous|8.3.09 @ 3:40PM|#

Socialism looms, rent-seeking grows. News at 11.

WWJGD|8.3.09 @ 3:42PM|#

Well golly, he had only the best intentions...

Rich|8.3.09 @ 3:49PM|#

I am curious just what type of "education and research" tha national association of dental plans does?

Kinda pay-to-play surveying.

|8.3.09 @ 4:17PM|#

I just don't understand why we allow our government officials to be directly influenced by people with interests in the law. We don't let sex offenders have a say in what the punishments for sex crimes should be. But ... we do let "victims groups" have a say in what punishments for crimes should be. Why the disconnect? It has nothing to do with one group being more sympathetic than another, as the health insurance industry is not the least bit sympathetic. So it just comes down to money being able to buy access to politicians. But why do the politicians let those with conflicts of interests get their way when it comes time to write/enforce the law?

It is per se corrupt to let the health insurance companies have a say in what our national healthcare policy should be. They have a financial interest in the outcome, and their financial interest is in conflict with the interests of We The People.

People/groups/companies who have interests in the law should not be permitted to have direct access to the lawmakers debating/writing laws that affect their businesses. No, I'm not saying their free speech should be limited - I'm only saying their speech should have the same limits that an ordinary American's speech has - If Blue Cross Blue Shield has something to say about healthcare reform, it can write a letter to Obama and its repreentative in Washington. But for a lawmaker to allow BC/BS into his/her office to discuss healthcare reform and directly lodge objections and give suggestions is such a ridiculous conflict of interests that it's revolting. Representatives of X industry (healthcare, oil/gas, automobiles, media, whatever) should not be allowed within 100 miles of Washington, DC, when Congress is debating/discussing new legislative reforms that affect X industry.

Access to politicians should never amount to anything beyond being able to write a letter to them. That's it. But the system is so corrupt that the health insurance companies have already drafted the "reform" bill that will be passed. It will have a title that implies substantive reform while the 1500 pages of the actual law itself will be nothing more than subterfuge to disguise what could be said in one page - Taxpayers give Health Insurance companies several trillion dollars over the next Y years.

This is what happens when the wealthy can buy access to politicians and be allowed to write their own laws. And we sit back and allow it... cowering over fears of "socialized medicine" while simultaneously worrying that our (socialist) Medicaid benefits will be reduced.

People get the government they deserve, and the truth is we don't deserve any better than what we have. But come on, we should at least try.

|8.3.09 @ 4:25PM|#

I just don't understand why we allow our government officials to be directly influenced by people with interests in the law.

Freedom of association, democracy, all that jazz.

creech|8.3.09 @ 4:26PM|#

Hey, Bruce, how would lawmakers know anything about any issue unless they could hear from those with a stake in the matter? Osmosis?
So neither Ralph Nader or Ford gets to comment about CAFE? No mortgage broker should attempt to explain to Barney Frank about moral hazard?
No medical marijuana lab owner should be allowed to tell a congressman facts about the
illnesses of his or her customers?

|8.3.09 @ 4:29PM|#

In Bruce's situation, as Creech points out, all legislation would be written by no-nothing incompetents who were merely taking stabs in the dark at a solution.

Oh wait.

Jordan|8.3.09 @ 4:35PM|#

No, I'm not saying their free speech should be limited -

Yes, you are.

I'm only saying their speech should have the same limits that an ordinary American's speech has

It already does. Ordinary Americans are free to receive and accept invitations from the President, just like representatives of Blue Cross/Blue Shield.

This is what happens when you give the government broad regulatory powers.the wealthy can buy access to politicians and be allowed to write their own laws.

Fixed that for you.

Jordan|8.3.09 @ 4:46PM|#

I meant to say "invitations from the President and/or lawmakers".

|8.3.09 @ 4:51PM|#

"It is per se corrupt to let the health insurance companies have a say in what our national healthcare policy should be."

I disagree and would hold up utilities as an example. Utilities lobby lawmakers. Why? To counter-balance environmentalists. If lawmakers only were lobbied by environmentalists, we'd all be sitting in the dark.

Another way of looking at it would be that what the hell does Harry Reid know about health care? His only personal experience is with his employer provided top-shelf plan.

If the insurance companies can't lobby lawmakers, it's possible that some idiot lawmaker could write a piece of legislation oblivious to the fact that it was really going to fuck shit up once it became law.

Wicks Cherrycoke|8.3.09 @ 5:21PM|#

"It is per se corrupt to let the health insurance companies have a say in what our national healthcare policy should be."

Ever hear of the First Amendment?

|8.3.09 @ 5:51PM|#

It is per se corrupt to let the health insurance companies have a say in what our national healthcare policy should be.

Your this close. Try:

It is per se corrupt to let the health insurance companies government have a say in what our national healthcare policy should be.

|8.3.09 @ 6:07PM|#

Gee, government threatens to nationalize one sixteenth of the economy and interest groups want their say?

|8.3.09 @ 6:21PM|#

Dang, I just realized why folks hate lobbyists. I think the public perception is that the lobbyists just make the rounds to our congress critters with sackfuls of cash and a list of demands.

mark|8.3.09 @ 6:57PM|#

government threatens to nationalize one sixteenth of the economy

One sixth, James. Soon to become 1/4. And with the gov't in charge you can be sure it will become 1/2. And that, of course, will give the green light to regulating the other half, as it affects vital government interests.

bruce|8.3.09 @ 7:04PM|#

Just because you don't have a direct pecuniary interest in a law doesn't mean you don't know anything about it.

I strongly reject the notion that only people interested in the outcome of a legislative issue are competent to decide the matter.

In 99% of cases we can presume certain people, companies, and groups are opposed to, or in favor of, a particular law. For example, we don't need to hear from MADD to know that MADD is in favor of longer DWI punishments and lower blood-alcohol content limits. We sure as hell don't need to let MADD write the damn law.

Victim impact statements are another example - the law sets a minimum punishment and a maximum punishment for a given crime. Society can presume that the victim of the crime wants the defendant to receive the maximum punishment permitted by law, while the defendant wants the minimum punishment. We don't need to hear from either party to know their preferences on punishment (though the defendant has a constitutional right to address the court while the victim does not). The judge should be neutral and not take either the preference of the criminal or the victim into account in determining the appropriate sentence. I absolutely reject the notion that only the victim knows how the crime has affected him/her and thus only the victim is capable of determining what the proper sentence is. The law should just presume the victim wants the maximum sentence and go from there. The victim's sob story is not necessary to the process.

|8.3.09 @ 7:24PM|#

[i]I just don't understand why we allow our government officials to be directly influenced by people with interests in the law. [/i]

The only way to get rid of influence on politics is to limit the power of the politicians.

bruce|8.3.09 @ 10:41PM|#

nmg: As long as politicians can make/enforce laws, they'll have lots of power. But we can do a few things, such as ban lobbyists (you can contact your representative yourself, but you can't pay someone to do it for you), impose term limits on all politicians (one term, no worries about getting money to run for re-election so no way to buy the politician with campaign cash), impose equal time/equal access rules for all constituents - I should get as much time to talk to Nancy Pelosi about my wacky UFO/alien abduction theories as General Motors gets to talk to her about the auto business. Also, public companies should have limited access to politicians in general. I'd suggest that public companies cannot meet politicians in person and can write no more than one 10-page, double-spaced letter (in proportionally-spaced 12-point font and including no more than 3 pages of attachments/exhibits) to their representatives every month.

I also think we need to have more than 2 political parties. The first step in remedying that is to not have a winner takes all system. This will let smaller political parties participate in the system. The libertarian party should have a few seats in Congress.

That's just a start.

|8.4.09 @ 12:00PM|#

nmg: As long as politicians can make/enforce laws, they'll have lots of power.

There was a time in this country when this was not the case, when the federal government in particular was a negligible concern for most everybody. When, even though the politicians could make/enforce laws, their scope for doing so was very narrow, and hence they did not have lots of power.

|8.12.09 @ 10:47PM|#

um, I am a rookie at all this, and this may sound crazy, but...how about the lawmakers sticking to talking to, say, DOCTORS about health care, and not insurance companies?

I know a good one...DOCTOR RON PAUL, perhaps??? (I just had to put in a plug for The Only Politician I Have Ever Trusted).