How the Obama Administration Empowers Lobbyists


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