Obama vs. the Lobbyists

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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.