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Monday, September 28, 2015

Who Lobbies for Us?

One exercise that I like to do when trying to understand a situation is to try to imagine what I’d be thinking and feeling if I were the other guy. To that end, I sometimes imagine what it must be like to be a Washington lawmaker. Members of Congress probably have very full days. Because they are members of their party and the ones who decide what laws we will have, what programs we will fund and what governmental agencies will and won’t do, there are lots and lots and lots of people who would like to talk with each and every one of them.

These people who want to talk with them are mostly paid to do so. It is their job to gain access to lawmakers for the express purpose of influencing their thoughts about a particular area of interest to their employer or client. If a company or group has enough money to employ a lobbyist full-time, they will have a person on The Hill every day trying to get appointments to talk with lawmakers or their staff.

Let’s pause and think about this. We’re talking about an entire industry. According to Wikipedia, the modern source of truth, there were over 12,000 registered lobbyists in Washington as of 2014. There are less than 500 lawmakers. You do the math. Between actually spending time on the floor and in committee, they have a continuous stream of professionals coming through their offices.

Each lobbyist is trying to persuade lawmakers to craft (or support) legislation favorable to their particular mission at the time. Some of these missions might actually be helpful to us regular folks, but most of it is favorable to the industries and groups that fund them. These generally break down into two major classifications: industry groups and citizen groups.

Citizen groups are supposedly lobbying for us, but here’s what they have to offer a lawmaker:

  1. Ideas
  2. Ability to help get support for other favored agenda items

Industry groups, on the other hand can offer:

  1. Ideas
  2. Ability to help get support for other favored agenda items
  3. Campaign funding
  4. Financial support for pet projects
  5. A job if and when the lawmaker decides to retire from public life

This explains things like why medical insurance companies still exist after healthcare reform. Did you know that 62% of all personal bankruptcies are caused by the inability to pay medical bills? And, 78% of those folks HAD medical insurance. Insurance companies make huge profits. They do this by using very creative tactics along with legislative support so that they can legally get away with said tactics. On top of corporate profits, they employ many expensive people as executives and lobbyists.
Nobody wants to put a whole industry out of work, but we’ve done it before and we will need to do it again. How many whalers do you know? The fact is, when an industry is sucking the life out of the economy, it’s value proposition needs to be reevaluated.

It won’t be. Because there is no lobbyist in Washington with the resources to compete with highly profitable industries like medical insurance. It starts with election finance reform. In 2010, the Supreme Court ruled that corporations are people. This put the nail in the coffin of any hope that we could stop industry from funding elections. Winning an election requires lawmakers to be pragmatic. You need to take care of the folks that are buttering your bread. Until that’s an average citizen, citizen lobby groups are at a serious disadvantage.

Since corporations are now people, you’d think the limit on personal campaign donations would apply, but until we eliminate soft money, there will always be back channels. The other option would be to ban lawyers from being lawmakers. Of course, if we did that, we might not be able to find enough willing individuals to serve in Washington.


This morning, only one day after writing this post, I came across a new initiative that is starting to take hold in the medical insurance industry, which I used as an example above. It is called value-based insurance design (V-BID) and elements of it were actually included in the Affordable Care Act. It's a step in the right direction and will make a significant difference if it is widely adopted.

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