Obama vs. the Lobbyists

A Scorecard for the Future of American Politics

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 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. Barack Obama's sheen, his administration's unflagging confidence, and all the bipartisan, post-racial aspirations have been replaced by the hard realities of Washington politicking.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 TV ads. 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 Sen. Max Baucus (D-MT), 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 reelection 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 U.S. into a parliamentary system, by 48 percentage points.

Sen. Chuck Grassley (R-IA), 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, Sen. Kent Conrad (D-ND), 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 -- backs 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's 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 U.S. 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 U.S. 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."

In fact, Wall Street's lobbying battle against increased financial regulation has been so powerful and smothering that, one year after the financial crisis began, plenty of experts already foresee future crises like the one in our not-so-distant past. Of the mega banks on Wall Street, MIT professor and former International Monetary Fund chief economist Simon Johnson says, "They will run up big risks, they will fail again, they will hit us for a big check."

On the Waxman-Markey climate bill, the first in U.S. history to tackle global warming, opponents have thrown everything but the classic kitchen sink at lawmakers to persuade them to drop their support. One of the heaviest hitters, the American Coalition for Clean Coal Energy (ACCCE), an umbrella advocacy group representing mining, coal, manufacturers, and other energy interests, has spent nearly $12 million since 2008 lobbying against climate change efforts. But the 2,800 lobbyists weighing in on the Waxman-Markey bill in Washington -- more than 75% representing industry interests -- are only the tip of a rapidly melting iceberg.

The American Energy Alliance, headed by oil lobbyist Thomas Pyle, has hit the road with its "American Energy Express" bus tour visiting county fairs, horse shows, and baseball games in coal-friendly Midwestern and Appalachian states, claiming that Waxman-Markey is actually a national energy tax that would eliminate jobs. The ACCCE has also hired a firm specializing in astroturfing -- that is, in creating or funding phony grassroots organizations or networks -- to put together "America's Power Army," a 225,000-strong volunteer network to spread misinformation at the town-hall meetings of congressional representatives and other forums.

The anti-Waxman-Markey warfare reached a new low when one sleazy D.C. lobbying firm, showing the lengths to which opponents will go, fabricated letters opposing the bill and sent them to members of Congress. A Congressional investigation found that Bonner and Associates, a specialist in grassroots/astroturf campaigns working for ACCCE, forged more than a dozen separate letters and sent them to Rep. Tom Perriello (D-VA) and several other congressmen. The purported authors of the phony letters ranged from an American veterans' organization and the American Association of University Women to a Hispanic advocacy group, Creciendo Juntos, and the NAACP. But their message was the same: Fight Waxman-Markey, it will cost us jobs.

The F-22's False Promise

In April, Defense Secretary Robert Gates signaled the Obama administration's new philosophy on military spending by announcing an array of notable budget cuts intended to curtail or eliminate some of the unsuccessful or unnecessary weapons systems that litter the Pentagon's bloated budget and reflect the previous administration's military excesses. "We must reform how and what we buy," Gates explained, "meaning a fundamental overhaul of our approach to procurement, acquisition and contracting."

In Gates's crosshairs were projects like the F-22 Raptor jet fighter, a Cold War relic that's run wildly over-budget and never flown a mission in Iraq or Afghanistan; the VH-71 presidential helicopter, which Obama specifically insisted he didn't want or need; the C-17, a transport plane Gates said the country already had enough of; and the Army's lackluster Future Combat Systems modernization program, the brainchild of former Defense Secretary Donald Rumsfeld. After years of excessive military spending, Gates's plan to trim these wasteful projects (though, sadly, not the defense budget in toto) potentially presented a stark change of fortune to defense contractors and corporations accustomed to the beneficence of Washington's lawmakers.

In response, the defense industry and its lobbyists mobilized. Six months later, as new defense legislation staggers through Congress, just north of 1,000 defense-related lobbyists are hard at work. This year $62 million has been spent on Pentagon lobbying efforts. In particular, Lockheed Martin, the F-22's main manufacturer, has sunk almost $7 million into lobbying in 2009, in part through a campaign targeting lawmakers with F-22 manufacturing sites in their states, while extolling the number of jobs an F-22 program would create. Lockheed even launched a faux-grassroots website, PreserveRaptorJobs.com, to drum up public support for the plane. (It has since been taken down.)

Obama, however, stood firm. Even after House lawmakers tried to restore F-22 funding, the president insisted that he'd veto any bill with more of the planes in it. This was made crystal clear in a "Statement of Administration Policy" (SAP) on the House defense appropriations bill. The plane's loyal supporters like Sen. Saxby Chambliss (R-GA) and Rep. John Murtha (D-PA) got the message and left the F-22 on the cutting-room floor.

But the question remains: How pyrrhic was the administration's F-22 "victory"? Gates has, as a start, agreed to order four more of the useless F-22s at a cost of $351 million a pop -- they are included in the 2009 supplemental defense bill -- and he plans to more than double the future run of F-35 Joint Strike Fighters, a cumbersome, accident-prone, prohibitively expensive plane like the F-22. It will surprise no one that the F-35 is also made by Lockheed -- and it is easy to imagine that the F-35 commitment could, in fact, have been a corporate trade-off for the lost F-22, which Lockheed still hopes to sell abroad with the Senate's help.

And what about those other projects eyed by Gates: the VH-71 helicopter or the C-17 transport? The Obama administration, by all evidence, seems to be wilting in its defense of their termination. (That the second most powerful Pentagon official, William Lynn, is a former lobbyist for defense contractor Raytheon undoubtedly doesn't help.) The same SAP with the F-22 veto is noticeably softer on the VH-71, saying only that "the President's senior advisors would recommend that he veto the bill," but stopping short of insisting that the helicopter must go. As for the C-17, any kind of administration recommendation is MIA in the SAP.

"Gates and Obama got tough on the F-22, and in Congress the porkers backed off, and Murtha even took the F-22s he had in his bill out," Winslow Wheeler, director of the Straus Military Reform Project at the Center for Defense Information and a former Capitol Hill staffer for three decades, told TomDispatch. "But in the same bill, Murtha also packed in more C-17s, more presidential helicopters, more F-35 engines, challenging Gates and Obama. They need to understand that they need to put up a fight."

If Not Obama, Then Who?

Rahm Emanuel knew back in April that the administration was entering the ring, but how ready have Obama and his team been to duke it out on all fronts? On paper, Obama has appeared ready enough. In his moving address to Congress last week, for instance, he not only emphasized the need for a public option in health-care reform, but directly debunked the "bogus claims" being used to attack his health-care reform vision.

His actions, though, have been less reassuring. While committing his administration to the Afghan War, the President has appeared unwilling to fight defense boondoggles down the line, as he did in the case of the F-22, and he's been less than forceful in defending sorely needed financial reforms -- like those for the $592 billion over-the-counter derivatives market -- in the face of Wall Street's lobbying clout.

Once again, this isn't entirely surprising: For all the talk of the flood of small, individual donations to Obama's historic 2008 election campaign, its coffers overflowed with money from financial powerhouses like Goldman Sachs and JPMorgan Chase and corporations like General Electric, Google, and Microsoft. According to the Center for Responsive Politics, Obama still ranks near the top among all recipients when it comes to contributions from the health, defense, financial, and energy industries.

The same goes for Obama's staff. In an interview with Politico.com, Bill Moyers put it vividly. "I think Rahm Emanuel, who is a clever politician, understands that the money for Obama's reelection would come primarily from the health industry, the drug industry and Wall Street, and so he is a corporate Democrat who is destined, determined that there would be something in this legislation," Moyers asserted, that will appease those powerful interests.

If the president's sprawling agenda has revealed anything, it's the extent to which private industries and their foot soldiers on K Street and Capitol Hill influence -- and in some cases dictate -- American policymaking. Right now, about 12,500 federally registered lobbyists make their trade in Washington, but believe it or not, they're only a small slice of the pie. James Thurber, director of the Center for Congressional and Presidential Studies at American University, tells TomDispatch that the number of people in the political advocacy business who aren't registered -- the astroturfers, public relations firms, and strategy groups, among others -- number anywhere from 90,000 to 120,000. Conservatively speaking, that adds up to 168 influence peddlers for every member of Congress.

Now you know the players. The teams, uneven as they may be, are on the field. So take out that scorecard. Beating the Washington influence machine, flush with cash, amply staffed and relentless in its mission, will be no small feat for Obama's team. And if they fail, then it will be possible to say that no matter who's voted in, it's the influence machine that rules Washington.