forwarded from Linda Weatherby: Great piece: Corporate lobbyists
don't run GOP; it's vice versa!]]
Michael Eisenstadt
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"Welcome to the Machine" by Nicholas ConfessoreHi Mike---
I think this article says it all. I may have long since sent it to you, =
so pardon if so. I've lost the ghetto list address--would you perhaps =
pass this on? =20
Thank you sir---and thanks for the advice on controlling those pesky =
hormones. =20
Cheers to you and Madelon, Linda
http://www.washingtonmonthly.com/features/2003/0307.confessore.html
-------------------------------------------------------------------------=
-------
=20
Respond to this Article July/August 2003 =20
Welcome to the Machine
How the GOP disciplined K Street and made Bush supreme.=20
By Nicholas Confessore=20
--------------------------------------------------------------------
=20
When presidents pick someone to fill a job in the =
government, it's typically a very public affair. The White House =
circulates press releases and background materials. Congress holds a =
hearing, where some members will pepper the nominee with questions and =
others will shower him or her with praise. If the person in question is =
controversial or up for an important position, they'll rate a profile or =
two in the papers. But there's one confirmation hearing you won't hear =
much about. It's convened every Tuesday morning by Rick Santorum, the =
junior senator from Pennsylvania, in the privacy of a Capitol Hill =
conference room, for a handpicked group of two dozen or so Republican =
lobbyists. Occasionally, one or two other senators or a representative =
from the White House will attend. Democrats are not invited, and neither =
is the press.=20
The chief purpose of these gatherings is to discuss =
jobs--specifically, the top one or two positions at the biggest and most =
important industry trade associations and corporate offices centered =
around Washington's K Street, a canyon of nondescript office buildings a =
few blocks north of the White House that is to influence-peddling what =
Wall Street is to finance. In the past, those people were about as =
likely to be Democrats as Republicans, a practice that ensured K Street =
firms would have clout no matter which party was in power. But beginning =
with the Republican takeover of Congress in 1994, and accelerating in =
2001, when George W. Bush became president, the GOP has made a =
determined effort to undermine the bipartisan complexion of K Street. =
And Santorum's Tuesday meetings are a crucial part of that effort. Every =
week, the lobbyists present pass around a list of the jobs available and =
discuss whom to support. Santorum's responsibility is to make sure each =
one is filled by a loyal Republican--a senator's chief of staff, for =
instance, or a top White House aide, or another lobbyist whose =
reliability has been demonstrated. After Santorum settles on a =
candidate, the lobbyists present make sure it is known whom the =
Republican leadership favors. "The underlying theme was [to] place =
Republicans in key positions on K Street. Everybody taking part was a =
Republican and understood that that was the purpose of what we were =
doing," says Rod Chandler, a retired congressman and lobbyist who has =
participated in the Santorum meetings. "It's been a very successful =
effort."=20
If today's GOP leaders put as much energy into shaping K =
Street as their predecessors did into selecting judges and =
executive-branch nominees, it's because lobbying jobs have become the =
foundation of a powerful new force in Washington politics: a Republican =
political machine. Like the urban Democratic machines of yore, this one =
is built upon patronage, contracts, and one-party rule. But unlike =
legendary Chicago mayor Richard J. Daley, who rewarded party =
functionaries with jobs in the municipal bureaucracy, the GOP is =
building its machine outside government, among Washington's thousands of =
trade associations and corporate offices, their tens of thousands of =
employees, and the hundreds of millions of dollars in political money at =
their disposal.=20
At first blush, K Street might not seem like the best place =
to build a well-oiled political operation. For most of its existence, =
after all, the influence industry has usually been the primary obstacle =
to aggressive, ambitious policy-making in Washington. But over the last =
few years, Republicans have brought about a revolutionary change: =
They've begun to capture and, consequently, discipline K Street. Through =
efforts like Santorum's--and a House version run by the majority whip, =
Roy Blunt (R-Mo.)--K Street is becoming solidly Republican. The =
corporate lobbyists who once ran the show, loyal only to the parochial =
interests of their employer, are being replaced by party activists who =
are loyal first and foremost to the GOP. Through them, Republican =
leaders can now marshal armies of lobbyists, lawyers, and public =
relations experts--not to mention enormous amounts of money--to meet the =
party's goals. Ten years ago, according to the Center for Responsive =
Politics, the political donations of 19 key industry sectors--including =
accounting, pharmaceuticals, defense, and commercial banks--were split =
about evenly between the parties. Today, the GOP holds a two-to-one =
advantage in corporate cash.=20
That shift in large part explains conservatives' =
extraordinary legislative record over the last few years. Democrats, =
along with the press, have watched in mounting disbelief as President =
Bush, lacking either broad majorities in Congress or a strong mandate =
from voters, has enacted startlingly bold domestic policies--from two =
major tax cuts for the rich, to a rollback of workplace safety and =
environmental standards, to media ownership rules that favor large =
conglomerates. The secret to Bush's surprising legislative success is =
the GOP's increasing control of Beltway influence-peddlers. K Street =
used to be a barrier to sweeping change in Washington. The GOP has =
turned it into a weapon.=20
Lobbyists on a Leash=20
To see how effective this machine can be, one need only =
compare the Bush administration's current push to reform Medicare with =
Bill Clinton's 1993 attempt to pass universal health insurance. Both set =
out to enact revolutionary changes in the nation's health-care system. =
And by most measures, Clinton would have seemed more likely to succeed, =
having staked his presidential campaign on the popular issue at a time =
when Democrats controlled both houses of Congress. By contrast, Bush =
rarely mentioned Medicare during his campaign, and enjoys much slimmer =
majorities in Congress. Furthermore, although his prescription-drug =
benefit is popular, Bush's stated goal of moving more seniors into =
private health plans is most definitely not. Yet where Clinton's plan =
met an ignominious death, Bush's appears headed for speedy passage.=20
There were, of course, many reasons why Clinton failed, from =
mishandling relations with congressional leaders to the perceived =
insularity and arrogance of the task force of policy wonks Hillary =
Clinton assembled to tackle the challenge of achieving universal health =
care. But another major obstacle was the business and health-care =
interests on K Street. Clinton worked to win their backing. Among other =
things, his plan would have capped employer contributions to workers' =
health insurance at a level far below what many large companies, like =
General Motors and Kodak, were already paying to their employees' health =
plans, saving the companies billions of dollars. But some of those firms =
nevertheless denounced Clinton's plan after it was unveiled, rightly =
believing that they could bid up the price of their support even more. =
Meanwhile, conservative activists, eager to deny a new Democratic =
president his first major political victory, worked to convince business =
lobbyists that they would gain more by opposing Clinton than by =
supporting him. As more and more K Street lobbies abandoned Clinton, the =
plan went down to defeat.=20
Bush has taken a different approach. Instead of convening =
policy wonks to solve a problem, he issued a price tag and a political =
goal: Set Medicare on the road to privatization. When legislators from =
both parties balked at his initial proposal to offer more generous drug =
benefits to seniors who left Medicare for private plans, Bush dropped =
it--but retained incentives to lure seniors into the private market. =
What he didn't have to do was fight K Street, because the lobbyists were =
already tamed. Those health-care interests that had doubts about Bush's =
plan have been successfully pressured to keep quiet. Most of the rest =
have given Bush their full support.=20
A good example is the pharmaceutical industry. Drug =
companies have a natural affinity for the GOP's effort to move seniors =
into private plans, because if Medicare were to begin providing =
prescription drugs, its bargaining power could drive down drug prices. =
But over the past few years, Republican leaders have carefully =
cultivated and cajoled the industry. The upper ranks of its Washington =
trade group, PhRMA, are stocked with former aides to powerful =
Republicans, and its political behavior reflects it: The industry, which =
gave roughly evenly during the fight over Clinton's health-care plan, =
now contributes 80 percent of its money to Republicans. PhRMA has =
essentially become an extension of the GOP. It supported Bush's plan =
with a multimillion-dollar ad campaign even before the plan had been =
finalized and made public, and continued its support even as Bush =
compromised in ways that went against the drug industry's interests. By =
contrast, large corporations waited to see what Clinton's plan looked =
like and then haggled over its details, while health-care companies =
funded the famous "Harry and Louise" ads that eventually helped sink it. =
Bush's Medicare legislation could still stall or get watered =
down. But the fact that the White House and the GOP have pushed it so =
far, so fast, regardless of the risk and downside, hints not only at the =
power of an organized K Street, but at the political end to which it is =
being directed. For years, conservatives have tried and, mostly, failed =
to significantly reduce the size of the federal government. The large =
entitlement programs in particular command too much public support to be =
cut, let alone abolished. But by co-opting K Street, conservatives can =
do the next best thing--convert public programs like Medicare into a =
form of private political spoils. As a government program, Medicare is =
run by civil servants and controlled by elected officials of both =
parties. Bush's legislation creates an avenue to wean people from =
Medicare and into the private sector--or, at least, a version of the =
private sector. For under the GOP plan, the medical insurance industry =
would gradually become a captive of Washington, living off the business =
steered to it by the government but dependent on its Beltway =
lobbyists--themselves Republican surrogates--to maintain this stream of =
wealth. Over time, private insurers would grow to resemble the defense =
sector: closely entwined with government, a revolving door for =
Republican officials, and vastly supportive, politically and =
financially, of the GOP. Republicans are thus engineering a tectonic =
political shift in two phases. First, move the party to K Street. Then =
move the government there, too.=20
Rise of the Machine=20
The emerging Republican machine is the mirror image of that =
built by the Democratic Party under Franklin D. Roosevelt and his =
successors. The edifice of federal bureaucracy that emerged between the =
1930s and the 1960s shifted power and resources from the private sphere =
to the public, while centralizing economic regulation in federal =
agencies and commissions. Democratic government taxed progressively, =
then redistributed that money through a vast and growing network of =
public institutions. Those constituencies that Democratic governance =
serviced best--the working class, the poor, veterans, the elderly, and, =
eventually, ethnic and racial minorities--made the Democrats the =
majority party. "Tax and tax, spend and spend, elect and elect," as =
Roosevelt's aide Harry Hopkins put it, became the basis of Democratic =
power.=20
For many years, most business leaders adopted a conciliatory =
approach to the new system and accepted its basic premises. But during =
the 1970s, prodded by intellectuals like Irving Kristol and Lewis =
Powell, businesses began funding a new wave of aggressively ideological =
think tanks and advocacy groups to challenge the intellectual =
underpinnings of Democratic governance. Corporations sought influence by =
opening Washington offices, launching PACs, and pouring money into their =
trade associations. Savvy GOP operatives steered that money toward the =
Republican Party. Between the early 1970s and mid-1980s, the number of =
trade associations doubled; between 1981 and 1985, the number of =
registered lobbyists in Washington quadrupled, vastly augmenting =
business power and giving rise to K Street.=20
But there was a limit to what these groups could accomplish: =
Democrats still enjoyed an entrenched majority in Congress. The need to =
cultivate them meant that K Street's immediate interests would never =
align with the GOP's even if, more often than not, their long-term =
interests did. As a result, there emerged a broadly bipartisan lobbying =
culture. To facilitate broad access, most trade associations hired =
lobbyists from both parties, who were expected to be pragmatic and =
nonideological. Although certain industries may have had traditional =
ties to one party, most corporate PACs distributed money roughly =
equally.=20
This culture flourished even during Ronald Reagan's two =
terms. When Reagan was elected and Republicans won the Senate, GOP =
activists urged business to donate more to their party. But a =
little-known California Democrat named Tony Coelho stopped them in their =
tracks. As chairman of the Democratic Congressional Campaign Committee, =
he reminded business lobbyists that his party still controlled the House =
and, with it, the committees and subcommittees through which any =
legislation would have to pass. At the same time, he worked to convince =
businessmen that Democrats, too, could deliver for them. During Reagan's =
first two years, Coelho tripled the DCCC's fundraising. So even as the =
Republican realignment chugged ahead, Democrats retained a rough parity =
on K Street.=20
But while Democratic power endured, it contained an inherent =
tension. For the most part, K Street groups supported Democrats because =
they had to and Republicans because they wanted to. The Democrats needed =
corporate money to stay competitive, but were limited by the pull of =
their liberal, labor-oriented base. Although the party became generally =
more pro-business during the 1980s, it had few natural constituencies on =
K Street. At best, control of Congress allowed Democratic leaders to cut =
occasional deals with business interests, delivering key compromises--a =
tax break here, a floor vote there--in exchange for a portion of =
business giving.=20
Thus, under Democratic rule, the private sector remained =
unorganized, with lobbyists wielding huge influence, but in the service =
of a thousand different agendas and interests. And, as these multiplied, =
K Street became an obstacle to any large reforms. Lobbyists grew adept =
at larding ambitious legislation with special-interest provisions. When =
a reform threatened a large enough bloc, ad hoc coalitions could defeat =
almost anything, regardless of its popularity with voters. This inherent =
incoherence disadvantaged Republican presidents as much as it later =
would Clinton. Reagan's 1981 tax cut, primarily intended as an =
across-the-board rate reduction for individuals, passed Congress as a =
special-interest bonanza adorned with far more corporate loopholes and =
special breaks than his advisers had planned, so ballooning the federal =
deficit that Reagan spent the remainder of his presidency ratcheting =
taxes back up, four times between 1982 and 1984 alone. "The hogs were =
really feeding," David Stockman, Reagan's budget director, later =
confessed. "The greed level, the level of opportunism just got out of =
control."=20
The DeLay School=20
It took something that hadn't happened in 40 years to begin =
to change the culture of K Street: In 1994, Republicans won control of =
Congress. All of a sudden, the Democrats' traditional power base =
evaporated, and with it much of their leverage over lobbyists. New =
Republican leaders like Newt Gingrich, Dick Armey, Tom DeLay, and a =
handful of close advisers like Ed Gillespie and Grover Norquist, quickly =
consolidated power in the House, and turned their attention to the =
lobbying community. Revolutionaries all, they nursed a deep disdain for =
K Street pragmatism. "They had a hard time dealing with lobbyists who =
were used to dealing with Democrats [and] were looking at ways to change =
this in the interests of the [conservative] coalition," says one =
conservative activist.=20
One way was to start ensuring that the new GOP agenda of =
radical deregulation, tax and spending cuts, and generally reducing =
government earned the financial support they thought it deserved. In =
1995, DeLay famously compiled a list of the 400 largest PACs, along with =
the amounts and percentages of money they had recently given to each =
party. Lobbyists were invited into DeLay's office and shown their place =
in "friendly" or "unfriendly" columns. ("If you want to play in our =
revolution," DeLay told The Washington Post, "you have to live by our =
rules.") Another was to oust Democrats from trade associations, what =
DeLay and Norquist dubbed "the K Street Strategy." Sometimes =
revolutionary zeal got the better of them. One seminal moment, never =
before reported, occurred in 1996 when Haley Barbour, who was chairman =
of the Republican National Committee, organized a meeting of the House =
leadership and business executives. "They assembled several large =
company CEOs and made it clear to them that they were expected to purge =
their Washington offices of Democrats and replace them with =
Republicans," says a veteran steel lobbyist. The Republicans also =
demanded more campaign money and help for the upcoming election. The =
meeting descended into a shouting match, and the CEOs, most of them =
Republicans, stormed out.=20
DeLay's attempt to corral the private sector stalled soon =
after. While corporate giving took on a more Republican cast and more =
Republicans began to be hired, the GOP leadership experienced =
significant pushback, for two reasons. One was that Democrats still =
controlled the White House. The other was that, by most measures, =
Clinton's presidency had been very good for business, especially for the =
large corporations who had supported Clinton's efforts to bring the =
budget deficit under control. By 1996, corporate and trade association =
PACs still gave roughly three-quarters of their money to both parties' =
incumbents. After Clinton's 1996 reelection, Gingrich's subsequent =
combustion, and Democratic gains in Congress two years later, the =
bipartisan lobbying culture remained largely intact.=20
It took the 2000 elections, which gave Republicans the White =
House and Congress, to completely change the climate. In the months =
after, Santorum became the Senate's point man on K Street and launched =
his Tuesday meetings. Working on the outside, Norquist accelerated what =
he calls the "K Street Project," a database intended to track the party =
affiliation, Hill experience, and political giving of every lobbyist in =
town. With Democrats out of power, these efforts are bearing fruit. =
Slowly, the GOP is marginalizing Democratic lobbyists and populating K =
Street with loyal Republicans. (DeLay alone has placed a dozen of his =
aides at key lobbying and trade association jobs in the last few =
years--"graduates of the DeLay school," as they are known.) Already, the =
GOP and some of its key private-sector allies, such as PhRMA, have =
become indistinguishable.=20
Dinging the Chicks=20
Republicans, of course, see things differently. "The =
Democrats are terrified that our K Street Project is going to replicate =
the way that they behaved when they had the House and Senate," says =
Norquist. For him and many of his contemporaries, Democratic rule prior =
to 1994 was no less autocratic than that of Republicans today. But =
there's a fundamental difference: Democrats were limited by the basic =
tension between pleasing their labor base and corporate interests. =
Unions did, and still do, function as arms of the Democratic Party. When =
it came to the vastly bigger interests on K Street, someone like Coelho =
could aim only for financial parity and perhaps a slight advantage in =
jobs. The emerging GOP machine, however, is premised on a unity of =
interests between party and industry, which means the GOP can ask =
for--and demand--total loyalty.=20
With thin Republican majorities in the House and Senate, a =
market for Democratic lobbyists remains, and traditional bipartisan =
lobbying firms still thrive. But increasingly, the trade associations =
and their corporate representatives--those firms run by Republicans--are =
the beneficiaries of Washington's new spoils system. And like Mayor =
Daley's ward supervisors, they are expected to display total loyalty. =
"These guys come downtown thinking that they owe their job to somebody =
on the Hill or the influence that somebody brought to bear for them, and =
they think it's their primary function, in addition to working for the =
entities they've joined, to sustain the relationship between the Hill =
and themselves," says Vic Fazio, a top Democratic lobbyist and former =
congressman from California. "They rationalize it by saying it's good =
for the old boss and the new one, too."=20
Day-to-day, the most trusted lobbyists--like those who =
attend Santorum's meetings--serve as commissars, providing the =
leadership with eyes and ears as well as valuable advice and feedback. =
And generally, placing party surrogates atop trade associations makes =
them more responsive to the party's needs. However, the K Street =
strategy also provides the GOP with a number of specific advantages. =
>From a machine perspective, such jobs are far more useful than =
appointive positions in the executive branch. Private sector work has =
none of government's downside. Political machines thrive on closed-door =
decision-making; on K Street, there's no other kind. Neither are trade =
associations subject to inspector generals or congressional oversight; =
there are no rules against whom you can meet with, no reporters armed =
with FOIAs. These jobs also make for better patronage. Whereas a deputy =
undersecretary might earn $140,000, a top oil lobbyist can make =
$400,000. Controlling K Street also helps Republicans accumulate =
political talent. Many ex-Clintonites who might have wanted top lobbying =
positions couldn't get them, and so left Washington for posts at =
universities, corporations, and foundations elsewhere. But the GOP, able =
to dole out the most desirable jobs, has kept more of its best people in =
Washington, where they can be hauled out for government or campaign work =
like clubs in a golf bag.=20
But jobs and campaign contributions are just the tip of the =
iceberg. Control a trade association, and you control the considerable =
resources at its disposal. Beginning in the 1990s, Washington's =
corporate offices and trade associations began to resemble miniature =
campaign committees, replete with pollsters and message consultants. To =
supplement PAC giving, which is limited by federal election laws, =
corporations vastly increased their advocacy budgets, with trade =
organizations spending millions of dollars in soft money on issue ad =
campaigns in congressional districts. And thanks to the growing number =
of associations whose executives are beholden to DeLay or Santorum, =
these campaigns are increasingly put in the service of GOP candidates =
and causes. Efforts like the one PhRMA made on behalf of Bush's Medicare =
plan have accompanied every major administration initiative. Many of =
them have been run out of the offices of top Republican lobbyists such =
as Ed Gillespie, whose recent elevation to chairman of the Republican =
National Committee epitomizes the new unity between party and K Street. =
Such is the GOP's influence that it has been able to marshal on behalf =
of party objectives not just corporate lobbyists, but the corporations =
themselves. During the Iraq war, for instance, the media conglomerate =
Clear Channel Communications Inc. had its stations sponsor pro-war =
rallies nationwide and even banned the Dixie Chicks, who had criticized =
White House policy, from its national play list. Likewise, last spring =
Norquist and the White House convinced a number of corporations and =
financial services firms to lobby customers to support Bush's dividends =
tax cut. Firms like General Motors and Verizon included flyers touting =
the plan with dividends checks mailed to stockholders; Morgan Stanley =
included a letter from its CEO with the annual report it mailed to =
millions of customers.=20
Lobby Horses=20
Although this arrangement is intended to mutually benefit =
the GOP and the businesses who support it, in practice, the new =
Republican machine must balance the needs of K Street with the interests =
of the party. Sometimes that requires the GOP to take positions that it =
knows will be unpopular with voters or open the party up to criticism =
from the press. Shortly after Bush took office, at the behest of =
business groups, congressional Republicans summarily tossed out a set of =
ergonomics standards that Bush's father had sent wending through the =
rule-making process a decade earlier. Similarly, in June, =
Republican-appointed commissioners on the Federal Communications =
Commission--bowing to the wishes of large broadcasters and newspaper =
chains--dumped 50-year-old federal regulations on media ownership, =
causing a wave of public anger. And while it's not uncommon for =
lobbyists to have a hand in writing legislation on the Hill, the Bush =
administration has sometimes shifted the locus of executive policy =
making so far towards K Street that Bush's own appointees are cut out of =
the process. While environmental groups complained loudly about being =
excluded from meetings of Dick Cheney's energy task force, Bush's own =
energy secretary, Spencer Abraham, was barely involved. As Public =
Citizen pointed out in a February 2003 letter to Congress, Joseph =
Kelliher, a senior advisor to Abraham and his point man on the task =
force, didn't write white papers or propose ideas of his own, but merely =
solicited suggestions from a cross-section of energy lobbyists and =
passed them on to the White House, where they were added to the task =
force's recommendations nearly verbatim. Top administration officials =
then handed the package down to the House, where it was approved almost =
unaltered.=20
But the flip side of the deal is that trade associations and =
corporations are expected to back the party's initiatives even on =
occasions when doing so is not in their own best interest. When Bush's =
recently passed dividends tax cut proposal was first announced, the life =
insurance industry complained that the bill would sharply reduce the tax =
advantage of annuities sold by insurance companies, potentially costing =
them hundreds of millions of dollars. The industry's lobbyists were told =
to get behind the president's proposal anyway--or lose any chance to =
plead their case. So they did. In mid-March, Frank Keating, the head of =
the industry's trade group and a close friend of Bush's, hand-delivered =
a letter to the White House co-signed by nearly 50 CEOs, endorsing the =
president's proposal while meekly raising the hope that taxes on =
dividends from annuities would also be included in the final repeal =
(which they weren't). Those firms that didn't play ball on Bush's pan =
paid the price. The Electronic Industries Alliance was one of the few =
big business lobbies that declined to back the tax cut, in large part =
because the high-tech companies that make up a good portion of its =
membership don't even issue dividends. As a result, the trade group was =
frozen out of all tax discussions at the White House. The final bill =
reflected the ability of the GOP machine to pass legislation largely on =
its own terms: Whereas Reagan's 1981 tax bill was a Christmas tree of =
special breaks, Bush's was relatively clean, mainly benefiting wealthy =
individuals and small businesses, as the administration had intended.=20
Positively K Street=20
If you read The Washington Post last spring, you might have =
come across what seemed, on the surface, to be just another small beer =
scandal. This one involved Rep. Michael Oxley (R-Ohio), who heads the =
House Committee on Financial Services. Late last year, Oxley was set to =
launch an investigation of pricing practices in the mutual fund =
industry. But in December, one of his staffers allegedly let it be known =
that Oxley might go easy on the mutual funds if their trade group, the =
Investment Company Institute (ICI), pushed out its Democratic chief =
lobbyist, Julie Domenick. The Post's reporting caused a minor uproar; =
the House Ethics Committee briefly considered an investigation. The =
press coverage, however, never made clear why a powerful committee =
chairman like Oxley would risk his career over one job on K Street.=20
What explains Oxley's decision is the same thing that =
explains why the Bush administration would risk angering voters by =
attempting to privatize Medicare: The GOP needs K Street's muscle for =
long-term ideological projects to remake the national government. For =
years, conservatives have been pushing to divert part of Social Security =
into private investment accounts. Such a move, GOP operatives argued, =
would provide millions of new customers and potentially trillions of =
dollars to the mutual fund industry that would manage the private =
accounts. The profits earned would, of course, be shared with the GOP in =
the form of campaign contributions. In other words, by sluicing the =
funds collected by the federal government's largest social insurance =
program through businesses loyal to the GOP, the party would instantly =
convert the crown jewels of Democratic governance into a pillar of the =
new Republican machine. But to make the plan a reality, the GOP needed =
groups like the ICI to get behind the idea--by funding pro-privatization =
think tanks, running issue ads attacking anti-privatization Democrats, =
and so on. The ICI, however, had always been lukewarm to privatization, =
for which conservatives blamed Domenick. Hence, the GOP machine decided =
she had to go. In the end, to quell the Oxley scandal, Domenick was =
allowed to keep her job. But ICI hired a former general counsel to Newt =
Gingrich to work alongside her, and the GOP's campaign to get K Street =
behind Social Security privatization continues.=20
If the GOP is willing to be aggressive enough, even the =
federal payroll can become a source of patronage. Recently, as part of =
Bush's "competitive sourcing" initiative, the Interior Department =
announced that over half of the Park Service's 20,000 jobs could be =
performed by private contractors; according to the Post, administration =
officials have already told the service's senior managers to plan on =
about one-third of their jobs being outsourced. (Stay tuned for =
"Yosemite: A division of Halliburton Corporation.") But the Park Service =
is only the beginning. Bush has proposed opening up 850,000 federal =
jobs--about half of the total--to private contractors. And while doing =
so may or may not save taxpayers much money, it will divert taxpayer =
money out of the public sector and into private sector firms, where the =
GOP has a chance to steer contracts towards politically connected firms. =
Anyone who doubts this eventuality need look no further than =
Florida. There, as New York Times columnist Paul Krugman pointed out =
last year, Gov. Jeb Bush, the president's brother, has outsourced =
millions of dollars worth of work formerly performed by government =
employees to private contractors. There's little evidence that doing so =
has improved state services, as the governor's own staff admits. But it =
has vastly improved the financial state of the Florida Republican Party. =
According to an investigation by The Miami Herald last fall, "[t]he =
policy has spawned a network of contractors who have given [Bush], other =
Republican politicians, and the Florida GOP millions of dollars in =
campaign donations."=20
The New Spoils System=20
The Bush brothers would not be the first political family to =
turn government contracts into a source of political power. When the =
current mayor of Chicago, Richard M. Daley, won his father's old job 14 =
years ago, civil service reform had already wrecked the old system of =
bureaucratic patronage. So the new mayor began to farm out government =
services to private contractors, many of which returned the favor by =
donating generously to Daley's reelection campaigns. Today, Daley =
dominates Chicago politics almost as thoroughly as did his father. Like =
his father, Daley has used his power, in part, to improve city services =
voters care about, from better schools to the flower beds lining Lake =
Shore Drive. By contrast, the fruits of today's Republican machine--tax =
cuts and deregulation--have been enjoyed mainly by corporations and =
upper-income voters, while federal services, from college aid to =
environmental protection, are getting scaled back.=20
Indeed, it's striking how openly and unapologetically Bush =
and his party have allied themselves with corporations and the wealthy. =
The rhetoric of compassion aside, no one who pays attention to what goes =
on in Washington could have much doubt as to where the Bush =
administration's priorities lie. If the economy doesn't improve or =
unemployment continues to get worse, the GOP may find it's not such an =
advantage to be seen catering so enthusiastically to monied interests. =
But most Republicans seem confident that the strength they gain by =
harnessing K Street will be enough to muscle through the next =
election--so confident, in fact, that Bush, breaking with conventional =
electoral wisdom, has eschewed tacking to the political center late in =
his term. And if the GOP can prevail at the polls in the short term, its =
nascent political machine could usher in a new era of one-party =
government in Washington. As Republicans control more and more K Street =
jobs, they will reap more and more K Street money, which will help them =
win larger and larger majorities on the Hill. The larger the Republican =
majority, the less reason K Street has to hire Democratic lobbyists or =
contribute to the campaigns of Democratic politicians, slowly starving =
them of the means by which to challenge GOP rule. Already during this =
cycle, the Republicans' campaign committees have raised about twice as =
much as their Democratic counterparts. So far, the gamble appears to be =
paying off.=20
It wouldn't be the first time. A little over a century ago, =
William McKinley--Karl Rove's favorite president--positioned the =
Republican Party as a bulwark of the industrial revolution against the =
growing backlash from agrarian populists, led by Democratic presidential =
candidate William Jennings Bryan. The new business titans flocked to =
McKinley's side, providing him with an extraordinary financial advantage =
over Bryan. McKinley's victory in 1896 ushered in a long period of =
government largely by and for industry (interrupted briefly, and =
impermanently, by the Progressive Era). But with vast power came, =
inevitably, arrogance and insularity. By the 1920s, Republican rule had =
degenerated into corruption and open larceny--and a government that, in =
the face of rapidly growing inequality and fantastic concentration of =
wealth and opportunity among the fortunate few, resisted public pressure =
for reform. It took a few more years, and the Great Depression, for the =
other shoe to drop. But in 1932 came the landslide election of Franklin =
Delano Roosevelt, and the founding of the very structure of governance =
today's Republicans hope to dismantle. Who knows? History may yet repeat =
itself.=20
Nicholas Confessore is an editor of The =
Washington Monthly.=20
=20
=20
=20
=20
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Feedback Customer Service Subscribe Online Make A Donation =
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The Washington Monthly 733 15th St. NW Suite 520 Washington DC. =
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<DIV><FONT face=3DArial size=3D2>Hi Mike---</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=3DArial size=3D2>I think this article says it all. =
I may have=20
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<DIV><FONT face=3DArial size=3D2>Thank you sir---and thanks for the =
advice on=20
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<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Cheers to you and Madelon, =
Linda</FONT></DIV>
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<DIV><FONT face=3DArial size=3D2></FONT> </DIV><A=20
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<TD vAlign=3Dtop><FONT size=3D-1><A=20
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<TD align=3Dright><B>July/August 2003 =
</B></TD></TR></TBODY></TABLE>
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<CENTER></FONT><B>
<H1><FONT color=3D#000000 size=3D7>Welcome to the=20
Machine</FONT></H1></B><FONT color=3D#555555 =
size=3D+2></FONT><FONT=20
color=3D#555555 size=3D+2>How the GOP disciplined K Street =
and made Bush=20
supreme. </FONT></CENTER>
<P>
<CENTER><B><FONT size=3D+1>By <A href=3D"#byline">Nicholas=20
Confessore</A></FONT></B>=20
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<NOSCRIPT><IMG height=3D1=20
=
src=3D"http://x3.extreme-dm.com/z/?tag=3Dnickt&p=3Dhttp%3A%2F%2Fwww.w=
ashingtonmonthly.com%2Ffeatures%2F2002%2F0307.confessore.html&j=3Dn" =
width=3D1></NOSCRIPT><IMG height=3D370 hspace=3D15=20
=
src=3D"http://www.washingtonmonthly.com/graphics/kstreet.jpg"=20
width=3D259 align=3Dright vspace=3D4><BR>When presidents =
pick someone to=20
fill a job in the government, it's typically a very public =
affair.=20
The White House circulates press releases and background =
materials.=20
Congress holds a hearing, where some members will pepper the =
nominee=20
with questions and others will shower him or her with =
praise. If the=20
person in question is controversial or up for an important =
position,=20
they'll rate a profile or two in the papers. But there's one =
confirmation hearing you won't hear much about. It's =
convened every=20
Tuesday morning by Rick Santorum, the junior senator from=20
Pennsylvania, in the privacy of a Capitol Hill conference =
room, for=20
a handpicked group of two dozen or so Republican lobbyists.=20
Occasionally, one or two other senators or a representative =
from the=20
White House will attend. Democrats are not invited, and =
neither is=20
the press.=20
<P>The chief purpose of these gatherings is to discuss=20
jobs--specifically, the top one or two positions at the =
biggest and=20
most important industry trade associations and corporate =
offices=20
centered around Washington's K Street, a canyon of =
nondescript=20
office buildings a few blocks north of the White House that =
is to=20
influence-peddling what Wall Street is to finance. In the =
past,=20
those people were about as likely to be Democrats as =
Republicans, a=20
practice that ensured K Street firms would have clout no =
matter=20
which party was in power. But beginning with the Republican =
takeover=20
of Congress in 1994, and accelerating in 2001, when George =
W. Bush=20
became president, the GOP has made a determined effort to =
undermine=20
the bipartisan complexion of K Street. And Santorum's =
Tuesday=20
meetings are a crucial part of that effort. Every week, the=20
lobbyists present pass around a list of the jobs available =
and=20
discuss whom to support. Santorum's responsibility is to =
make sure=20
each one is filled by a loyal Republican--a senator's chief =
of=20
staff, for instance, or a top White House aide, or another =
lobbyist=20
whose reliability has been demonstrated. After Santorum =
settles on a=20
candidate, the lobbyists present make sure it is known whom =
the=20
Republican leadership favors. "The underlying theme was [to] =
place=20
Republicans in key positions on K Street. Everybody taking =
part was=20
a Republican and understood that that was the purpose of =
what we=20
were doing," says Rod Chandler, a retired congressman and =
lobbyist=20
who has participated in the Santorum meetings. "It's been a =
very=20
successful effort."=20
<P>If today's GOP leaders put as much energy into shaping K =
Street=20
as their predecessors did into selecting judges and =
executive-branch=20
nominees, it's because lobbying jobs have become the =
foundation of a=20
powerful new force in Washington politics: a Republican =
political=20
machine. Like the urban Democratic machines of yore, this =
one is=20
built upon patronage, contracts, and one-party rule. But =
unlike=20
legendary Chicago mayor Richard J. Daley, who rewarded party =
functionaries with jobs in the municipal bureaucracy, the =
GOP is=20
building its machine outside government, among Washington's=20
thousands of trade associations and corporate offices, their =
tens of=20
thousands of employees, and the hundreds of millions of =
dollars in=20
political money at their disposal.=20
<P><A =
href=3D"https://www.kable.com/pub/wmth/subscribe.asp"><IMG=20
height=3D250 hspace=3D15=20
=
src=3D"http://www.washingtonmonthly.com/graphics/text-ad1.jpg"=20
width=3D300 align=3Dright vspace=3D10 border=3D0></A>At =
first blush, K=20
Street might not seem like the best place to build a =
well-oiled=20
political operation. For most of its existence, after all, =
the=20
influence industry has usually been the primary obstacle to=20
aggressive, ambitious policy-making in Washington. But over =
the last=20
few years, Republicans have brought about a revolutionary =
change:=20
They've begun to capture and, consequently, discipline K =
Street.=20
Through efforts like Santorum's--and a House version run by =
the=20
majority whip, Roy Blunt (R-Mo.)--K Street is becoming =
solidly=20
Republican. The corporate lobbyists who once ran the show, =
loyal=20
only to the parochial interests of their employer, are being =
replaced by party activists who are loyal first and foremost =
to the=20
GOP. Through them, Republican leaders can now marshal armies =
of=20
lobbyists, lawyers, and public relations experts--not to =
mention=20
enormous amounts of money--to meet the party's goals. Ten =
years ago,=20
according to the Center for Responsive Politics, the =
political=20
donations of 19 key industry sectors--including accounting,=20
pharmaceuticals, defense, and commercial banks--were split =
about=20
evenly between the parties. Today, the GOP holds a =
two-to-one=20
advantage in corporate cash.=20
<P>That shift in large part explains conservatives' =
extraordinary=20
legislative record over the last few years. Democrats, along =
with=20
the press, have watched in mounting disbelief as President =
Bush,=20
lacking either broad majorities in Congress or a strong =
mandate from=20
voters, has enacted startlingly bold domestic policies--from =
two=20
major tax cuts for the rich, to a rollback of workplace =
safety and=20
environmental standards, to media ownership rules that favor =
large=20
conglomerates. The secret to Bush's surprising legislative =
success=20
is the GOP's increasing control of Beltway =
influence-peddlers. K=20
Street used to be a barrier to sweeping change in =
Washington. The=20
GOP has turned it into a weapon.=20
<P><B>Lobbyists on a Leash</B>=20
<P>To see how effective this machine can be, one need only =
compare=20
the Bush administration's current push to reform Medicare =
with Bill=20
Clinton's 1993 attempt to pass universal health insurance. =
Both set=20
out to enact revolutionary changes in the nation's =
health-care=20
system. And by most measures, Clinton would have seemed more =
likely=20
to succeed, having staked his presidential campaign on the =
popular=20
issue at a time when Democrats controlled both houses of =
Congress.=20
By contrast, Bush rarely mentioned Medicare during his =
campaign, and=20
enjoys much slimmer majorities in Congress. Furthermore, =
although=20
his prescription-drug benefit is popular, Bush's stated goal =
of=20
moving more seniors into private health plans is most =
definitely=20
not. Yet where Clinton's plan met an ignominious death, =
Bush's=20
appears headed for speedy passage.=20
<P>There were, of course, many reasons why Clinton failed, =
from=20
mishandling relations with congressional leaders to the =
perceived=20
insularity and arrogance of the task force of policy wonks =
Hillary=20
Clinton assembled to tackle the challenge of achieving =
universal=20
health care. But another major obstacle was the business and =
health-care interests on K Street. Clinton worked to win =
their=20
backing. Among other things, his plan would have capped =
employer=20
contributions to workers' health insurance at a level far =
below what=20
many large companies, like General Motors and Kodak, were =
already=20
paying to their employees' health plans, saving the =
companies=20
billions of dollars. But some of those firms nevertheless =
denounced=20
Clinton's plan after it was unveiled, rightly believing that =
they=20
could bid up the price of their support even more. =
Meanwhile,=20
conservative activists, eager to deny a new Democratic =
president his=20
first major political victory, worked to convince business =
lobbyists=20
that they would gain more by opposing Clinton than by =
supporting=20
him. As more and more K Street lobbies abandoned Clinton, =
the plan=20
went down to defeat.=20
<P>Bush has taken a different approach. Instead of convening =
policy=20
wonks to solve a problem, he issued a price tag and a =
political=20
goal: Set Medicare on the road to privatization. When =
legislators=20
from both parties balked at his initial proposal to offer =
more=20
generous drug benefits to seniors who left Medicare for =
private=20
plans, Bush dropped it--but retained incentives to lure =
seniors into=20
the private market. What he didn't have to do was fight K =
Street,=20
because the lobbyists were already tamed. Those health-care=20
interests that had doubts about Bush's plan have been =
successfully=20
pressured to keep quiet. Most of the rest have given Bush =
their full=20
support.=20
<P>A good example is the pharmaceutical industry. Drug =
companies=20
have a natural affinity for the GOP's effort to move seniors =
into=20
private plans, because if Medicare were to begin providing=20
prescription drugs, its bargaining power could drive down =
drug=20
prices. But over the past few years, Republican leaders have =
carefully cultivated and cajoled the industry. The upper =
ranks of=20
its Washington trade group, PhRMA, are stocked with former =
aides to=20
powerful Republicans, and its political behavior reflects =
it: The=20
industry, which gave roughly evenly during the fight over =
Clinton's=20
health-care plan, now contributes 80 percent of its money to =
Republicans. PhRMA has essentially become an extension of =
the GOP.=20
It supported Bush's plan with a multimillion-dollar ad =
campaign even=20
before the plan had been finalized and made public, and =
continued=20
its support even as Bush compromised in ways that went =
against the=20
drug industry's interests. By contrast, large corporations =
waited to=20
see what Clinton's plan looked like and then haggled over =
its=20
details, while health-care companies funded the famous =
"Harry and=20
Louise" ads that eventually helped sink it.=20
<P>Bush's Medicare legislation could still stall or get =
watered=20
down. But the fact that the White House and the GOP have =
pushed it=20
so far, so fast, regardless of the risk and downside, hints =
not only=20
at the power of an organized K Street, but at the political =
end to=20
which it is being directed. For years, conservatives have =
tried and,=20
mostly, failed to significantly reduce the size of the =
federal=20
government. The large entitlement programs in particular =
command too=20
much public support to be cut, let alone abolished. But by =
co-opting=20
K Street, conservatives can do the next best thing--convert =
public=20
programs like Medicare into a form of private political =
spoils. As a=20
government program, Medicare is run by civil servants and =
controlled=20
by elected officials of both parties. Bush's legislation =
creates an=20
avenue to wean people from Medicare and into the private =
sector--or,=20
at least, a version of the private sector. For under the GOP =
plan,=20
the medical insurance industry would gradually become a =
captive of=20
Washington, living off the business steered to it by the =
government=20
but dependent on its Beltway lobbyists--themselves =
Republican=20
surrogates--to maintain this stream of wealth. Over time, =
private=20
insurers would grow to resemble the defense sector: closely =
entwined=20
with government, a revolving door for Republican officials, =
and=20
vastly supportive, politically and financially, of the GOP.=20
Republicans are thus engineering a tectonic political shift =
in two=20
phases. First, move the party to K Street. Then move the =
government=20
there, too.=20
<P><B>Rise of the Machine</B>=20
<P>The emerging Republican machine is the mirror image of =
that built=20
by the Democratic Party under Franklin D. Roosevelt and his=20
successors. The edifice of federal bureaucracy that emerged =
between=20
the 1930s and the 1960s shifted power and resources from the =
private=20
sphere to the public, while centralizing economic regulation =
in=20
federal agencies and commissions. Democratic government =
taxed=20
progressively, then redistributed that money through a vast =
and=20
growing network of public institutions. Those constituencies =
that=20
Democratic governance serviced best--the working class, the =
poor,=20
veterans, the elderly, and, eventually, ethnic and racial=20
minorities--made the Democrats the majority party. "Tax and =
tax,=20
spend and spend, elect and elect," as Roosevelt's aide Harry =
Hopkins=20
put it, became the basis of Democratic power.=20
<P>For many years, most business leaders adopted a =
conciliatory=20
approach to the new system and accepted its basic premises. =
But=20
during the 1970s, prodded by intellectuals like Irving =
Kristol and=20
Lewis Powell, businesses began funding a new wave of =
aggressively=20
ideological think tanks and advocacy groups to challenge the =
intellectual underpinnings of Democratic governance. =
Corporations=20
sought influence by opening Washington offices, launching =
PACs, and=20
pouring money into their trade associations. Savvy GOP =
operatives=20
steered that money toward the Republican Party. Between the =
early=20
1970s and mid-1980s, the number of trade associations =
doubled;=20
between 1981 and 1985, the number of registered lobbyists in =
Washington quadrupled, vastly augmenting business power and =
giving=20
rise to K Street.=20
<P>But there was a limit to what these groups could =
accomplish:=20
Democrats still enjoyed an entrenched majority in Congress. =
The need=20
to cultivate them meant that K Street's immediate interests =
would=20
never align with the GOP's even if, more often than not, =
their=20
long-term interests did. As a result, there emerged a =
broadly=20
bipartisan lobbying culture. To facilitate broad access, =
most trade=20
associations hired lobbyists from both parties, who were =
expected to=20
be pragmatic and nonideological. Although certain industries =
may=20
have had traditional ties to one party, most corporate PACs=20
distributed money roughly equally.=20
<P>This culture flourished even during Ronald Reagan's two =
terms.=20
When Reagan was elected and Republicans won the Senate, GOP=20
activists urged business to donate more to their party. But =
a=20
little-known California Democrat named Tony Coelho stopped =
them in=20
their tracks. As chairman of the Democratic Congressional =
Campaign=20
Committee, he reminded business lobbyists that his party =
still=20
controlled the House and, with it, the committees and =
subcommittees=20
through which any legislation would have to pass. At the =
same time,=20
he worked to convince businessmen that Democrats, too, could =
deliver=20
for them. During Reagan's first two years, Coelho tripled =
the DCCC's=20
fundraising. So even as the Republican realignment chugged =
ahead,=20
Democrats retained a rough parity on K Street.=20
<P>But while Democratic power endured, it contained an =
inherent=20
tension. For the most part, K Street groups supported =
Democrats=20
because they had to and Republicans because they wanted to. =
The=20
Democrats needed corporate money to stay competitive, but =
were=20
limited by the pull of their liberal, labor-oriented base. =
Although=20
the party became generally more pro-business during the =
1980s, it=20
had few natural constituencies on K Street. At best, control =
of=20
Congress allowed Democratic leaders to cut occasional deals =
with=20
business interests, delivering key compromises--a tax break =
here, a=20
floor vote there--in exchange for a portion of business =
giving.=20
<P>Thus, under Democratic rule, the private sector remained=20
unorganized, with lobbyists wielding huge influence, but in =
the=20
service of a thousand different agendas and interests. And, =
as these=20
multiplied, K Street became an obstacle to any large =
reforms.=20
Lobbyists grew adept at larding ambitious legislation with=20
special-interest provisions. When a reform threatened a =
large enough=20
bloc, ad hoc coalitions could defeat almost anything, =
regardless of=20
its popularity with voters. This inherent incoherence =
disadvantaged=20
Republican presidents as much as it later would Clinton. =
Reagan's=20
1981 tax cut, primarily intended as an across-the-board rate =
reduction for individuals, passed Congress as a =
special-interest=20
bonanza adorned with far more corporate loopholes and =
special breaks=20
than his advisers had planned, so ballooning the federal =
deficit=20
that Reagan spent the remainder of his presidency ratcheting =
taxes=20
back up, four times between 1982 and 1984 alone. "The hogs =
were=20
really feeding," David Stockman, Reagan's budget director, =
later=20
confessed. "The greed level, the level of opportunism just =
got out=20
of control."=20
<P><B>The DeLay School</B>=20
<P>It took something that hadn't happened in 40 years to =
begin to=20
change the culture of K Street: In 1994, Republicans won =
control of=20
Congress. All of a sudden, the Democrats' traditional power =
base=20
evaporated, and with it much of their leverage over =
lobbyists. New=20
Republican leaders like Newt Gingrich, Dick Armey, Tom =
DeLay, and a=20
handful of close advisers like Ed Gillespie and Grover =
Norquist,=20
quickly consolidated power in the House, and turned their =
attention=20
to the lobbying community. Revolutionaries all, they nursed =
a deep=20
disdain for K Street pragmatism. "They had a hard time =
dealing with=20
lobbyists who were used to dealing with Democrats [and] were =
looking=20
at ways to change this in the interests of the =
[conservative]=20
coalition," says one conservative activist.=20
<P>One way was to start ensuring that the new GOP agenda of =
radical=20
deregulation, tax and spending cuts, and generally reducing=20
government earned the financial support they thought it =
deserved. In=20
1995, DeLay famously compiled a list of the 400 largest =
PACs, along=20
with the amounts and percentages of money they had recently =
given to=20
each party. Lobbyists were invited into DeLay's office and =
shown=20
their place in "friendly" or "unfriendly" columns. ("If you =
want to=20
play in our revolution," DeLay told <I>The Washington =
Post</I>, "you=20
have to live by our rules.") Another was to oust Democrats =
from=20
trade associations, what DeLay and Norquist dubbed "the K =
Street=20
Strategy." Sometimes revolutionary zeal got the better of =
them. One=20
seminal moment, never before reported, occurred in 1996 when =
Haley=20
Barbour, who was chairman of the Republican National =
Committee,=20
organized a meeting of the House leadership and business =
executives.=20
"They assembled several large company CEOs and made it clear =
to them=20
that they were expected to purge their Washington offices of =
Democrats and replace them with Republicans," says a veteran =
steel=20
lobbyist. The Republicans also demanded more campaign money =
and help=20
for the upcoming election. The meeting descended into a =
shouting=20
match, and the CEOs, most of them Republicans, stormed out.=20
<P>DeLay's attempt to corral the private sector stalled soon =
after.=20
While corporate giving took on a more Republican cast and =
more=20
Republicans began to be hired, the GOP leadership =
experienced=20
significant pushback, for two reasons. One was that =
Democrats still=20
controlled the White House. The other was that, by most =
measures,=20
Clinton's presidency had been very good for business, =
especially for=20
the large corporations who had supported Clinton's efforts =
to bring=20
the budget deficit under control. By 1996, corporate and =
trade=20
association PACs still gave roughly three-quarters of their =
money to=20
both parties' incumbents. After Clinton's 1996 reelection,=20
Gingrich's subsequent combustion, and Democratic gains in =
Congress=20
two years later, the bipartisan lobbying culture remained =
largely=20
intact.=20
<P>It took the 2000 elections, which gave Republicans the =
White=20
House and Congress, to completely change the climate. In the =
months=20
after, Santorum became the Senate's point man on K Street =
and=20
launched his Tuesday meetings. Working on the outside, =
Norquist=20
accelerated what he calls the "K Street Project," a database =
intended to track the party affiliation, Hill experience, =
and=20
political giving of every lobbyist in town. With Democrats =
out of=20
power, these efforts are bearing fruit. Slowly, the GOP is=20
marginalizing Democratic lobbyists and populating K Street =
with=20
loyal Republicans. (DeLay alone has placed a dozen of his =
aides at=20
key lobbying and trade association jobs in the last few=20
years--"graduates of the DeLay school," as they are known.) =
Already,=20
the GOP and some of its key private-sector allies, such as =
PhRMA,=20
have become indistinguishable.=20
<P><B>Dinging the Chicks</B>=20
<P>Republicans, of course, see things differently. "The =
Democrats=20
are terrified that our K Street Project is going to =
replicate the=20
way that they behaved when they had the House and Senate," =
says=20
Norquist. For him and many of his contemporaries, Democratic =
rule=20
prior to 1994 was no less autocratic than that of =
Republicans today.=20
But there's a fundamental difference: Democrats were limited =
by the=20
basic tension between pleasing their labor base and =
corporate=20
interests. Unions did, and still do, function as arms of the =
Democratic Party. When it came to the vastly bigger =
interests on K=20
Street, someone like Coelho could aim only for financial =
parity and=20
perhaps a slight advantage in jobs. The emerging GOP =
machine,=20
however, is premised on a unity of interests between party =
and=20
industry, which means the GOP can ask for--and demand--total =
loyalty.=20
<P>With thin Republican majorities in the House and Senate, =
a market=20
for Democratic lobbyists remains, and traditional bipartisan =
lobbying firms still thrive. But increasingly, the trade=20
associations and their corporate representatives--those =
firms run by=20
Republicans--are the beneficiaries of Washington's new =
spoils=20
system. And like Mayor Daley's ward supervisors, they are =
expected=20
to display total loyalty. "These guys come downtown thinking =
that=20
they owe their job to somebody on the Hill or the influence =
that=20
somebody brought to bear for them, and they think it's their =
primary=20
function, in addition to working for the entities they've =
joined, to=20
sustain the relationship between the Hill and themselves," =
says Vic=20
Fazio, a top Democratic lobbyist and former congressman from =
California. "They rationalize it by saying it's good =
for the=20
old boss and the new one, too."=20
<P>Day-to-day, the most trusted lobbyists--like those who =
attend=20
Santorum's meetings--serve as commissars, providing the =
leadership=20
with eyes and ears as well as valuable advice and feedback. =
And=20
generally, placing party surrogates atop trade associations =
makes=20
them more responsive to the party's needs. However, the K =
Street=20
strategy also provides the GOP with a number of specific =
advantages.=20
From a machine perspective, such jobs are far more useful =
than=20
appointive positions in the executive branch. Private sector =
work=20
has none of government's downside. Political machines thrive =
on=20
closed-door decision-making; on K Street, there's no other =
kind.=20
Neither are trade associations subject to inspector generals =
or=20
congressional oversight; there are no rules against whom you =
can=20
meet with, no reporters armed with FOIAs. These jobs also =
make for=20
better patronage. Whereas a deputy undersecretary might earn =
$140,000, a top oil lobbyist can make $400,000. Controlling =
K Street=20
also helps Republicans accumulate political talent. Many=20
ex-Clintonites who might have wanted top lobbying positions =
couldn't=20
get them, and so left Washington for posts at universities,=20
corporations, and foundations elsewhere. But the GOP, able =
to dole=20
out the most desirable jobs, has kept more of its best =
people in=20
Washington, where they can be hauled out for government or =
campaign=20
work like clubs in a golf bag.=20
<P>But jobs and campaign contributions are just the tip of =
the=20
iceberg. Control a trade association, and you control the=20
considerable resources at its disposal. Beginning in the =
1990s,=20
Washington's corporate offices and trade associations began =
to=20
resemble miniature campaign committees, replete with =
pollsters and=20
message consultants. To supplement PAC giving, which is =
limited by=20
federal election laws, corporations vastly increased their =
advocacy=20
budgets, with trade organizations spending millions of =
dollars in=20
soft money on issue ad campaigns in congressional districts. =
And=20
thanks to the growing number of associations whose =
executives are=20
beholden to DeLay or Santorum, these campaigns are =
increasingly put=20
in the service of GOP candidates and causes. Efforts like =
the one=20
PhRMA made on behalf of Bush's Medicare plan have =
accompanied every=20
major administration initiative. Many of them have been run =
out of=20
the offices of top Republican lobbyists such as Ed =
Gillespie, whose=20
recent elevation to chairman of the Republican National =
Committee=20
epitomizes the new unity between party and K Street. Such is =
the=20
GOP's influence that it has been able to marshal on behalf =
of party=20
objectives not just corporate lobbyists, but the =
corporations=20
themselves. During the Iraq war, for instance, the media=20
conglomerate Clear Channel Communications Inc. had its =
stations=20
sponsor pro-war rallies nationwide and even banned the Dixie =
Chicks,=20
who had criticized White House policy, from its national =
play list.=20
Likewise, last spring Norquist and the White House convinced =
a=20
number of corporations and financial services firms to lobby =
customers to support Bush's dividends tax cut. Firms like =
General=20
Motors and Verizon included flyers touting the plan with =
dividends=20
checks mailed to stockholders; Morgan Stanley included a =
letter from=20
its CEO with the annual report it mailed to millions of =
customers.=20
<P><B>Lobby Horses</B>=20
<P>Although this arrangement is intended to mutually benefit =
the GOP=20
and the businesses who support it, in practice, the new =
Republican=20
machine must balance the needs of K Street with the =
interests of the=20
party. Sometimes that requires the GOP to take positions =
that it=20
knows will be unpopular with voters or open the party up to=20
criticism from the press. Shortly after Bush took office, at =
the=20
behest of business groups, congressional Republicans =
summarily=20
tossed out a set of ergonomics standards that Bush's father =
had sent=20
wending through the rule-making process a decade earlier. =
Similarly,=20
in June, Republican-appointed commissioners on the Federal=20
Communications Commission--bowing to the wishes of large=20
broadcasters and newspaper chains--dumped 50-year-old =
federal=20
regulations on media ownership, causing a wave of public =
anger. And=20
while it's not uncommon for lobbyists to have a hand in =
writing=20
legislation on the Hill, the Bush administration has =
sometimes=20
shifted the locus of executive policy making so far towards =
K Street=20
that Bush's own appointees are cut out of the process. While =
environmental groups complained loudly about being excluded =
from=20
meetings of Dick Cheney's energy task force, Bush's own =
energy=20
secretary, Spencer Abraham, was barely involved. As Public =
Citizen=20
pointed out in a February 2003 letter to Congress, Joseph =
Kelliher,=20
a senior advisor to Abraham and his point man on the task =
force,=20
didn't write white papers or propose ideas of his own, but =
merely=20
solicited suggestions from a cross-section of energy =
lobbyists and=20
passed them on to the White House, where they were added to =
the task=20
force's recommendations nearly verbatim. Top administration=20
officials then handed the package down to the House, where =
it was=20
approved almost unaltered.=20
<P>But the flip side of the deal is that trade associations =
and=20
corporations are expected to back the party's initiatives =
even on=20
occasions when doing so is not in their own best interest. =
When=20
Bush's recently passed dividends tax cut proposal was first=20
announced, the life insurance industry complained that the =
bill=20
would sharply reduce the tax advantage of annuities sold by=20
insurance companies, potentially costing them hundreds of =
millions=20
of dollars. The industry's lobbyists were told to get behind =
the=20
president's proposal anyway--or lose any chance to plead =
their case.=20
So they did. In mid-March, Frank Keating, the head of the =
industry's=20
trade group and a close friend of Bush's, hand-delivered a =
letter to=20
the White House co-signed by nearly 50 CEOs, endorsing the=20
president's proposal while meekly raising the hope that =
taxes on=20
dividends from annuities would also be included in the final =
repeal=20
(which they weren't). Those firms that didn't play ball on =
Bush's=20
pan paid the price. The Electronic Industries Alliance was =
one of=20
the few big business lobbies that declined to back the tax =
cut, in=20
large part because the high-tech companies that make up a =
good=20
portion of its membership don't even issue dividends. As a =
result,=20
the trade group was frozen out of all tax discussions at the =
White=20
House. The final bill reflected the ability of the GOP =
machine to=20
pass legislation largely on its own terms: Whereas Reagan's =
1981 tax=20
bill was a Christmas tree of special breaks, Bush's was =
relatively=20
clean, mainly benefiting wealthy individuals and small =
businesses,=20
as the administration had intended.=20
<P><B>Positively K Street</B>=20
<P>If you read <I>The Washington Post</I> last spring, you =
might=20
have come across what seemed, on the surface, to be just =
another=20
small beer scandal. This one involved Rep. Michael Oxley =
(R-Ohio),=20
who heads the House Committee on Financial Services. Late =
last year,=20
Oxley was set to launch an investigation of pricing =
practices in the=20
mutual fund industry. But in December, one of his staffers =
allegedly=20
let it be known that Oxley might go easy on the mutual funds =
if=20
their trade group, the Investment Company Institute (ICI), =
pushed=20
out its Democratic chief lobbyist, Julie Domenick. The =
<I>Post</I>'s=20
reporting caused a minor uproar; the House Ethics Committee =
briefly=20
considered an investigation. The press coverage, however, =
never made=20
clear why a powerful committee chairman like Oxley would =
risk his=20
career over one job on K Street.=20
<P>What explains Oxley's decision is the same thing that =
explains=20
why the Bush administration would risk angering voters by =
attempting=20
to privatize Medicare: The GOP needs K Street's muscle for =
long-term=20
ideological projects to remake the national government. For =
years,=20
conservatives have been pushing to divert part of Social =
Security=20
into private investment accounts. Such a move, GOP =
operatives=20
argued, would provide millions of new customers and =
potentially=20
trillions of dollars to the mutual fund industry that would =
manage=20
the private accounts. The profits earned would, of course, =
be shared=20
with the GOP in the form of campaign contributions. In other =
words,=20
by sluicing the funds collected by the federal government's =
largest=20
social insurance program through businesses loyal to the =
GOP, the=20
party would instantly convert the crown jewels of Democratic =
governance into a pillar of the new Republican machine. But =
to make=20
the plan a reality, the GOP needed groups like the ICI to =
get behind=20
the idea--by funding pro-privatization think tanks, running =
issue=20
ads attacking anti-privatization Democrats, and so on. The =
ICI,=20
however, had always been lukewarm to privatization, for =
which=20
conservatives blamed Domenick. Hence, the GOP machine =
decided she=20
had to go. In the end, to quell the Oxley scandal, Domenick =
was=20
allowed to keep her job. But ICI hired a former general =
counsel to=20
Newt Gingrich to work alongside her, and the GOP's campaign =
to get K=20
Street behind Social Security privatization continues.=20
<P>If the GOP is willing to be aggressive enough, even the =
federal=20
payroll can become a source of patronage. Recently, as part =
of=20
Bush's "competitive sourcing" initiative, the Interior =
Department=20
announced that over half of the Park Service's 20,000 jobs =
could be=20
performed by private contractors; according to the =
<I>Post</I>,=20
administration officials have already told the service's =
senior=20
managers to plan on about one-third of their jobs being =
outsourced.=20
(Stay tuned for "Yosemite: A division of Halliburton =
Corporation.")=20
But the Park Service is only the beginning. Bush has =
proposed=20
opening up 850,000 federal jobs--about half of the total--to =
private=20
contractors. And while doing so may or may not save =
taxpayers much=20
money, it will divert taxpayer money out of the public =
sector and=20
into private sector firms, where the GOP has a chance to =
steer=20
contracts towards politically connected firms.=20
<P>Anyone who doubts this eventuality need look no further =
than=20
Florida. There, as <I>New York Times</I> columnist Paul =
Krugman=20
pointed out last year, Gov. Jeb Bush, the president's =
brother, has=20
outsourced millions of dollars worth of work formerly =
performed by=20
government employees to private contractors. There's little =
evidence=20
that doing so has improved state services, as the governor's =
own=20
staff admits. But it has vastly improved the financial state =
of the=20
Florida Republican Party. According to an investigation by =
<I>The=20
Miami Herald</I> last fall, "[t]he policy has spawned a =
network of=20
contractors who have given [Bush], other Republican =
politicians, and=20
the Florida GOP millions of dollars in campaign donations."=20
<P><B>The New Spoils System</B>=20
<P>The Bush brothers would not be the first political family =
to turn=20
government contracts into a source of political power. When =
the=20
current mayor of Chicago, Richard M. Daley, won his father's =
old job=20
14 years ago, civil service reform had already wrecked the =
old=20
system of bureaucratic patronage. So the new mayor began to =
farm out=20
government services to private contractors, many of which =
returned=20
the favor by donating generously to Daley's reelection =
campaigns.=20
Today, Daley dominates Chicago politics almost as thoroughly =
as did=20
his father. Like his father, Daley has used his power, in =
part, to=20
improve city services voters care about, from better schools =
to the=20
flower beds lining Lake Shore Drive. By contrast, the fruits =
of=20
today's Republican machine--tax cuts and deregulation--have =
been=20
enjoyed mainly by corporations and upper-income voters, =
while=20
federal services, from college aid to environmental =
protection, are=20
getting scaled back.=20
<P>Indeed, it's striking how openly and unapologetically =
Bush and=20
his party have allied themselves with corporations and the =
wealthy.=20
The rhetoric of compassion aside, no one who pays attention =
to what=20
goes on in Washington could have much doubt as to where the =
Bush=20
administration's priorities lie. If the economy doesn't =
improve or=20
unemployment continues to get worse, the GOP may find it's =
not such=20
an advantage to be seen catering so enthusiastically to =
monied=20
interests. But most Republicans seem confident that the =
strength=20
they gain by harnessing K Street will be enough to muscle =
through=20
the next election--so confident, in fact, that Bush, =
breaking with=20
conventional electoral wisdom, has eschewed tacking to the =
political=20
center late in his term. And if the GOP can prevail at the =
polls in=20
the short term, its nascent political machine could usher in =
a new=20
era of one-party government in Washington. As Republicans =
control=20
more and more K Street jobs, they will reap more and more K =
Street=20
money, which will help them win larger and larger majorities =
on the=20
Hill. The larger the Republican majority, the less reason K =
Street=20
has to hire Democratic lobbyists or contribute to the =
campaigns of=20
Democratic politicians, slowly starving them of the means by =
which=20
to challenge GOP rule. Already during this cycle, the =
Republicans'=20
campaign committees have raised about twice as much as their =
Democratic counterparts. So far, the gamble appears to be =
paying=20
off.=20
<P>It wouldn't be the first time. A little over a century =
ago,=20
William McKinley--Karl Rove's favorite president--positioned =
the=20
Republican Party as a bulwark of the industrial revolution =
against=20
the growing backlash from agrarian populists, led by =
Democratic=20
presidential candidate William Jennings Bryan. The new =
business=20
titans flocked to McKinley's side, providing him with an=20
extraordinary financial advantage over Bryan. McKinley's =
victory in=20
1896 ushered in a long period of government largely by and =
for=20
industry (interrupted briefly, and impermanently, by the =
Progressive=20
Era). But with vast power came, inevitably, arrogance and=20
insularity. By the 1920s, Republican rule had degenerated =
into=20
corruption and open larceny--and a government that, in the =
face of=20
rapidly growing inequality and fantastic concentration of =
wealth and=20
opportunity among the fortunate few, resisted public =
pressure for=20
reform. It took a few more years, and the Great Depression, =
for the=20
other shoe to drop. But in 1932 came the landslide election =
of=20
Franklin Delano Roosevelt, and the founding of the very =
structure of=20
governance today's Republicans hope to dismantle. Who knows? =
History=20
may yet repeat itself.=20
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</FONT><B><h1><FONT SIZE=3D"7"
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</FONT><FONT SIZE=3D"+2"
COLOR=3D"#555555"> How the GOP disciplined K Street and made =
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height=3D1 width=3D1></noscript><IMG =
SRC=3D"http://www.washingtonmonthly.com/graphics/kstreet.jpg" =
width=3D"259" height=3D"370" ALIGN=3Dright hspace=3D"15" =
vspace=3D"4"><br>When presidents pick someone to fill a job in the =
government, it's typically a very public affair. The White House =
circulates press releases and background materials. Congress holds a =
hearing, where some members will pepper the nominee with questions and =
others will shower him or her with praise. If the person in question is =
controversial or up for an important position, they'll rate a profile or =
two in the papers. But there's one confirmation hearing you won't hear =
much about. It's convened every Tuesday morning by Rick Santorum, the =
junior senator from Pennsylvania, in the privacy of a Capitol Hill =
conference room, for a handpicked group of two dozen or so Republican =
lobbyists. Occasionally, one or two other senators or a representative =
from the White House will attend. Democrats are not invited, and neither =
is the press.
<p>The chief purpose of these gatherings is to discuss =
jobs--specifically, the top one or two positions at the biggest and most =
important industry trade associations and corporate offices centered =
around Washington's K Street, a canyon of nondescript office buildings a =
few blocks north of the White House that is to influence-peddling what =
Wall Street is to finance. In the past, those people were about as =
likely to be Democrats as Republicans, a practice that ensured K Street =
firms would have clout no matter which party was in power. But beginning =
with the Republican takeover of Congress in 1994, and accelerating in =
2001, when George W. Bush became president, the GOP has made a =
determined effort to undermine the bipartisan complexion of K Street. =
And Santorum's Tuesday meetings are a crucial part of that effort. Every =
week, the lobbyists present pass around a list of the jobs available and =
discuss whom to support. Santorum's responsibility is to make sure each =
one is filled by a loyal Republican--a senator's chief of staff, for =
instance, or a top White House aide, or another lobbyist whose =
reliability has been demonstrated. After Santorum settles on a =
candidate, the lobbyists present make sure it is known whom the =
Republican leadership favors. "The underlying theme was [to] place =
Republicans in key positions on K Street. Everybody taking part was a =
Republican and understood that that was the purpose of what we were =
doing," says Rod Chandler, a retired congressman and lobbyist who has =
participated in the Santorum meetings. "It's been a very successful =
effort."
<p>If today's GOP leaders put as much energy into shaping K Street as =
their predecessors did into selecting judges and executive-branch =
nominees, it's because lobbying jobs have become the foundation of a =
powerful new force in Washington politics: a Republican political =
machine. Like the urban Democratic machines of yore, this one is built =
upon patronage, contracts, and one-party rule. But unlike legendary =
Chicago mayor Richard J. Daley, who rewarded party functionaries with =
jobs in the municipal bureaucracy, the GOP is building its machine =
outside government, among Washington's thousands of trade associations =
and corporate offices, their tens of thousands of employees, and the =
hundreds of millions of dollars in political money at their disposal.
<p><A href=3D"https://www.kable.com/pub/wmth/subscribe.asp"><IMG =
SRC=3D"http://www.washingtonmonthly.com/graphics/text-ad1.jpg" =
height=3D250 width=3D0300 border=3D0 ALIGN=3Dright hspace=3D"15" =
vspace=3D"10"></A>At first blush, K Street might not seem like the best =
place to build a well-oiled political operation. For most of its =
existence, after all, the influence industry has usually been the =
primary obstacle to aggressive, ambitious policy-making in Washington. =
But over the last few years, Republicans have brought about a =
revolutionary change: They've begun to capture and, consequently, =
discipline K Street. Through efforts like Santorum's--and a House =
version run by the majority whip, Roy Blunt (R-Mo.)--K Street is =
becoming solidly Republican. The corporate lobbyists who once ran the =
show, loyal only to the parochial interests of their employer, are being =
replaced by party activists who are loyal first and foremost to the GOP. =
Through them, Republican leaders can now marshal armies of lobbyists, =
lawyers, and public relations experts--not to mention enormous amounts =
of money--to meet the party's goals. Ten years ago, according to the =
Center for Responsive Politics, the political donations of 19 key =
industry sectors--including accounting, pharmaceuticals, defense, and =
commercial banks--were split about evenly between the parties. Today, =
the GOP holds a two-to-one advantage in corporate cash.
<p>That shift in large part explains conservatives' extraordinary =
legislative record over the last few years. Democrats, along with the =
press, have watched in mounting disbelief as President Bush, lacking =
either broad majorities in Congress or a strong mandate from voters, has =
enacted startlingly bold domestic policies--from two major tax cuts for =
the rich, to a rollback of workplace safety and environmental standards, =
to media ownership rules that favor large conglomerates. The secret to =
Bush's surprising legislative success is the GOP's increasing control of =
Beltway influence-peddlers. K Street used to be a barrier to sweeping =
change in Washington. The GOP has turned it into a weapon.
<p><b>Lobbyists on a Leash</b>
<p>To see how effective this machine can be, one need only compare the =
Bush administration's current push to reform Medicare with Bill =
Clinton's 1993 attempt to pass universal health insurance. Both set out =
to enact revolutionary changes in the nation's health-care system. And =
by most measures, Clinton would have seemed more likely to succeed, =
having staked his presidential campaign on the popular issue at a time =
when Democrats controlled both houses of Congress. By contrast, Bush =
rarely mentioned Medicare during his campaign, and enjoys much slimmer =
majorities in Congress. Furthermore, although his prescription-drug =
benefit is popular, Bush's stated goal of moving more seniors into =
private health plans is most definitely not. Yet where Clinton's plan =
met an ignominious death, Bush's appears headed for speedy passage.
<p>There were, of course, many reasons why Clinton failed, from =
mishandling relations with congressional leaders to the perceived =
insularity and arrogance of the task force of policy wonks Hillary =
Clinton assembled to tackle the challenge of achieving universal health =
care. But another major obstacle was the business and health-care =
interests on K Street. Clinton worked to win their backing. Among other =
things, his plan would have capped employer contributions to workers' =
health insurance at a level far below what many large companies, like =
General Motors and Kodak, were already paying to their employees' health =
plans, saving the companies billions of dollars. But some of those firms =
nevertheless denounced Clinton's plan after it was unveiled, rightly =
believing that they could bid up the price of their support even more. =
Meanwhile, conservative activists, eager to deny a new Democratic =
president his first major political victory, worked to convince business =
lobbyists that they would gain more by opposing Clinton than by =
supporting him. As more and more K Street lobbies abandoned Clinton, the =
plan went down to defeat.
<p>Bush has taken a different approach. Instead of convening policy =
wonks to solve a problem, he issued a price tag and a political goal: =
Set Medicare on the road to privatization. When legislators from both =
parties balked at his initial proposal to offer more generous drug =
benefits to seniors who left Medicare for private plans, Bush dropped =
it--but retained incentives to lure seniors into the private market. =
What he didn't have to do was fight K Street, because the lobbyists were =
already tamed. Those health-care interests that had doubts about Bush's =
plan have been successfully pressured to keep quiet. Most of the rest =
have given Bush their full support.
<p>A good example is the pharmaceutical industry. Drug companies have a =
natural affinity for the GOP's effort to move seniors into private =
plans, because if Medicare were to begin providing prescription drugs, =
its bargaining power could drive down drug prices. But over the past few =
years, Republican leaders have carefully cultivated and cajoled the =
industry. The upper ranks of its Washington trade group, PhRMA, are =
stocked with former aides to powerful Republicans, and its political =
behavior reflects it: The industry, which gave roughly evenly during the =
fight over Clinton's health-care plan, now contributes 80 percent of its =
money to Republicans. PhRMA has essentially become an extension of the =
GOP. It supported Bush's plan with a multimillion-dollar ad campaign =
even before the plan had been finalized and made public, and continued =
its support even as Bush compromised in ways that went against the drug =
industry's interests. By contrast, large corporations waited to see what =
Clinton's plan looked like and then haggled over its details, while =
health-care companies funded the famous "Harry and Louise" ads that =
eventually helped sink it.
<p>Bush's Medicare legislation could still stall or get watered down. =
But the fact that the White House and the GOP have pushed it so far, so =
fast, regardless of the risk and downside, hints not only at the power =
of an organized K Street, but at the political end to which it is being =
directed. For years, conservatives have tried and, mostly, failed to =
significantly reduce the size of the federal government. The large =
entitlement programs in particular command too much public support to be =
cut, let alone abolished. But by co-opting K Street, conservatives can =
do the next best thing--convert public programs like Medicare into a =
form of private political spoils. As a government program, Medicare is =
run by civil servants and controlled by elected officials of both =
parties. Bush's legislation creates an avenue to wean people from =
Medicare and into the private sector--or, at least, a version of the =
private sector. For under the GOP plan, the medical insurance industry =
would gradually become a captive of Washington, living off the business =
steered to it by the government but dependent on its Beltway =
lobbyists--themselves Republican surrogates--to maintain this stream of =
wealth. Over time, private insurers would grow to resemble the defense =
sector: closely entwined with government, a revolving door for =
Republican officials, and vastly supportive, politically and =
financially, of the GOP. Republicans are thus engineering a tectonic =
political shift in two phases. First, move the party to K Street. Then =
move the government there, too.
<p><b>Rise of the Machine</b>
<p>The emerging Republican machine is the mirror image of that built by =
the Democratic Party under Franklin D. Roosevelt and his successors. The =
edifice of federal bureaucracy that emerged between the 1930s and the =
1960s shifted power and resources from the private sphere to the public, =
while centralizing economic regulation in federal agencies and =
commissions. Democratic government taxed progressively, then =
redistributed that money through a vast and growing network of public =
institutions. Those constituencies that Democratic governance serviced =
best--the working class, the poor, veterans, the elderly, and, =
eventually, ethnic and racial minorities--made the Democrats the =
majority party. "Tax and tax, spend and spend, elect and elect," as =
Roosevelt's aide Harry Hopkins put it, became the basis of Democratic =
power.
<p>For many years, most business leaders adopted a conciliatory approach =
to the new system and accepted its basic premises. But during the 1970s, =
prodded by intellectuals like Irving Kristol and Lewis Powell, =
businesses began funding a new wave of aggressively ideological think =
tanks and advocacy groups to challenge the intellectual underpinnings of =
Democratic governance. Corporations sought influence by opening =
Washington offices, launching PACs, and pouring money into their trade =
associations. Savvy GOP operatives steered that money toward the =
Republican Party. Between the early 1970s and mid-1980s, the number of =
trade associations doubled; between 1981 and 1985, the number of =
registered lobbyists in Washington quadrupled, vastly augmenting =
business power and giving rise to K Street.
<p>But there was a limit to what these groups could accomplish: =
Democrats still enjoyed an entrenched majority in Congress. The need to =
cultivate them meant that K Street's immediate interests would never =
align with the GOP's even if, more often than not, their long-term =
interests did. As a result, there emerged a broadly bipartisan lobbying =
culture. To facilitate broad access, most trade associations hired =
lobbyists from both parties, who were expected to be pragmatic and =
nonideological. Although certain industries may have had traditional =
ties to one party, most corporate PACs distributed money roughly =
equally.
<p>This culture flourished even during Ronald Reagan's two terms. When =
Reagan was elected and Republicans won the Senate, GOP activists urged =
business to donate more to their party. But a little-known California =
Democrat named Tony Coelho stopped them in their tracks. As chairman of =
the Democratic Congressional Campaign Committee, he reminded business =
lobbyists that his party still controlled the House and, with it, the =
committees and subcommittees through which any legislation would have to =
pass. At the same time, he worked to convince businessmen that =
Democrats, too, could deliver for them. During Reagan's first two years, =
Coelho tripled the DCCC's fundraising. So even as the Republican =
realignment chugged ahead, Democrats retained a rough parity on K =
Street.
<p>But while Democratic power endured, it contained an inherent tension. =
For the most part, K Street groups supported Democrats because they had =
to and Republicans because they wanted to. The Democrats needed =
corporate money to stay competitive, but were limited by the pull of =
their liberal, labor-oriented base. Although the party became generally =
more pro-business during the 1980s, it had few natural constituencies on =
K Street. At best, control of Congress allowed Democratic leaders to cut =
occasional deals with business interests, delivering key compromises--a =
tax break here, a floor vote there--in exchange for a portion of =
business giving.
<p>Thus, under Democratic rule, the private sector remained unorganized, =
with lobbyists wielding huge influence, but in the service of a thousand =
different agendas and interests. And, as these multiplied, K Street =
became an obstacle to any large reforms. Lobbyists grew adept at larding =
ambitious legislation with special-interest provisions. When a reform =
threatened a large enough bloc, ad hoc coalitions could defeat almost =
anything, regardless of its popularity with voters. This inherent =
incoherence disadvantaged Republican presidents as much as it later =
would Clinton. Reagan's 1981 tax cut, primarily intended as an =
across-the-board rate reduction for individuals, passed Congress as a =
special-interest bonanza adorned with far more corporate loopholes and =
special breaks than his advisers had planned, so ballooning the federal =
deficit that Reagan spent the remainder of his presidency ratcheting =
taxes back up, four times between 1982 and 1984 alone. "The hogs were =
really feeding," David Stockman, Reagan's budget director, later =
confessed. "The greed level, the level of opportunism just got out of =
control."
<p><b>The DeLay School</b>
<p>It took something that hadn't happened in 40 years to begin to change =
the culture of K Street: In 1994, Republicans won control of Congress. =
All of a sudden, the Democrats' traditional power base evaporated, and =
with it much of their leverage over lobbyists. New Republican leaders =
like Newt Gingrich, Dick Armey, Tom DeLay, and a handful of close =
advisers like Ed Gillespie and Grover Norquist, quickly consolidated =
power in the House, and turned their attention to the lobbying =
community. Revolutionaries all, they nursed a deep disdain for K Street =
pragmatism. "They had a hard time dealing with lobbyists who were used =
to dealing with Democrats [and] were looking at ways to change this in =
the interests of the [conservative] coalition," says one conservative =
activist.
<p>One way was to start ensuring that the new GOP agenda of radical =
deregulation, tax and spending cuts, and generally reducing government =
earned the financial support they thought it deserved. In 1995, DeLay =
famously compiled a list of the 400 largest PACs, along with the amounts =
and percentages of money they had recently given to each party. =
Lobbyists were invited into DeLay's office and shown their place in =
"friendly" or "unfriendly" columns. ("If you want to play in our =
revolution," DeLay told <i>The Washington Post</i>, "you have to live by =
our rules.") Another was to oust Democrats from trade associations, what =
DeLay and Norquist dubbed "the K Street Strategy." Sometimes =
revolutionary zeal got the better of them. One seminal moment, never =
before reported, occurred in 1996 when Haley Barbour, who was chairman =
of the Republican National Committee, organized a meeting of the House =
leadership and business executives. "They assembled several large =
company CEOs and made it clear to them that they were expected to purge =
their Washington offices of Democrats and replace them with =
Republicans," says a veteran steel lobbyist. The Republicans also =
demanded more campaign money and help for the upcoming election. The =
meeting descended into a shouting match, and the CEOs, most of them =
Republicans, stormed out.
<p>DeLay's attempt to corral the private sector stalled soon after. =
While corporate giving took on a more Republican cast and more =
Republicans began to be hired, the GOP leadership experienced =
significant pushback, for two reasons. One was that Democrats still =
controlled the White House. The other was that, by most measures, =
Clinton's presidency had been very good for business, especially for the =
large corporations who had supported Clinton's efforts to bring the =
budget deficit under control. By 1996, corporate and trade association =
PACs still gave roughly three-quarters of their money to both parties' =
incumbents. After Clinton's 1996 reelection, Gingrich's subsequent =
combustion, and Democratic gains in Congress two years later, the =
bipartisan lobbying culture remained largely intact.
<p>It took the 2000 elections, which gave Republicans the White House =
and Congress, to completely change the climate. In the months after, =
Santorum became the Senate's point man on K Street and launched his =
Tuesday meetings. Working on the outside, Norquist accelerated what he =
calls the "K Street Project," a database intended to track the party =
affiliation, Hill experience, and political giving of every lobbyist in =
town. With Democrats out of power, these efforts are bearing fruit. =
Slowly, the GOP is marginalizing Democratic lobbyists and populating K =
Street with loyal Republicans. (DeLay alone has placed a dozen of his =
aides at key lobbying and trade association jobs in the last few =
years--"graduates of the DeLay school," as they are known.) Already, the =
GOP and some of its key private-sector allies, such as PhRMA, have =
become indistinguishable.
<p><b>Dinging the Chicks</b>
<p>Republicans, of course, see things differently. "The Democrats are =
terrified that our K Street Project is going to replicate the way that =
they behaved when they had the House and Senate," says Norquist. For him =
and many of his contemporaries, Democratic rule prior to 1994 was no =
less autocratic than that of Republicans today. But there's a =
fundamental difference: Democrats were limited by the basic tension =
between pleasing their labor base and corporate interests. Unions did, =
and still do, function as arms of the Democratic Party. When it came to =
the vastly bigger interests on K Street, someone like Coelho could aim =
only for financial parity and perhaps a slight advantage in jobs. The =
emerging GOP machine, however, is premised on a unity of interests =
between party and industry, which means the GOP can ask for--and =
demand--total loyalty.
<p>With thin Republican majorities in the House and Senate, a market for =
Democratic lobbyists remains, and traditional bipartisan lobbying firms =
still thrive. But increasingly, the trade associations and their =
corporate representatives--those firms run by Republicans--are the =
beneficiaries of Washington's new spoils system. And like Mayor Daley's =
ward supervisors, they are expected to display total loyalty. "These =
guys come downtown thinking that they owe their job to somebody on the =
Hill or the influence that somebody brought to bear for them, and they =
think it's their primary function, in addition to working for the =
entities they've joined, to sustain the relationship between the Hill =
and themselves," says Vic Fazio, a top Democratic lobbyist and former =
congressman from California.=A0"They rationalize it by saying it's good =
for the old boss and the new one, too."
<p>Day-to-day, the most trusted lobbyists--like those who attend =
Santorum's meetings--serve as commissars, providing the leadership with =
eyes and ears as well as valuable advice and feedback. And generally, =
placing party surrogates atop trade associations makes them more =
responsive to the party's needs. However, the K Street strategy also =
provides the GOP with a number of specific advantages. From a machine =
perspective, such jobs are far more useful than appointive positions in =
the executive branch. Private sector work has none of government's =
downside. Political machines thrive on closed-door decision-making; on K =
Street, there's no other kind. Neither are trade associations subject to =
inspector generals or congressional oversight; there are no rules =
against whom you can meet with, no reporters armed with FOIAs. These =
jobs also make for better patronage. Whereas a deputy undersecretary =
might earn $140,000, a top oil lobbyist can make $400,000. Controlling K =
Street also helps Republicans accumulate political talent. Many =
ex-Clintonites who might have wanted top lobbying positions couldn't get =
them, and so left Washington for posts at universities, corporations, =
and foundations elsewhere. But the GOP, able to dole out the most =
desirable jobs, has kept more of its best people in Washington, where =
they can be hauled out for government or campaign work like clubs in a =
golf bag.
<p>But jobs and campaign contributions are just the tip of the iceberg. =
Control a trade association, and you control the considerable resources =
at its disposal. Beginning in the 1990s, Washington's corporate offices =
and trade associations began to resemble miniature campaign committees, =
replete with pollsters and message consultants. To supplement PAC =
giving, which is limited by federal election laws, corporations vastly =
increased their advocacy budgets, with trade organizations spending =
millions of dollars in soft money on issue ad campaigns in congressional =
districts. And thanks to the growing number of associations whose =
executives are beholden to DeLay or Santorum, these campaigns are =
increasingly put in the service of GOP candidates and causes. Efforts =
like the one PhRMA made on behalf of Bush's Medicare plan have =
accompanied every major administration initiative. Many of them have =
been run out of the offices of top Republican lobbyists such as Ed =
Gillespie, whose recent elevation to chairman of the Republican National =
Committee epitomizes the new unity between party and K Street. Such is =
the GOP's influence that it has been able to marshal on behalf of party =
objectives not just corporate lobbyists, but the corporations =
themselves. During the Iraq war, for instance, the media conglomerate =
Clear Channel Communications Inc. had its stations sponsor pro-war =
rallies nationwide and even banned the Dixie Chicks, who had criticized =
White House policy, from its national play list. Likewise, last spring =
Norquist and the White House convinced a number of corporations and =
financial services firms to lobby customers to support Bush's dividends =
tax cut. Firms like General Motors and Verizon included flyers touting =
the plan with dividends checks mailed to stockholders; Morgan Stanley =
included a letter from its CEO with the annual report it mailed to =
millions of customers.
<p><b>Lobby Horses</b>
<p>Although this arrangement is intended to mutually benefit the GOP and =
the businesses who support it, in practice, the new Republican machine =
must balance the needs of K Street with the interests of the party. =
Sometimes that requires the GOP to take positions that it knows will be =
unpopular with voters or open the party up to criticism from the press. =
Shortly after Bush took office, at the behest of business groups, =
congressional Republicans summarily tossed out a set of ergonomics =
standards that Bush's father had sent wending through the rule-making =
process a decade earlier. Similarly, in June, Republican-appointed =
commissioners on the Federal Communications Commission--bowing to the =
wishes of large broadcasters and newspaper chains--dumped 50-year-old =
federal regulations on media ownership, causing a wave of public anger. =
And while it's not uncommon for lobbyists to have a hand in writing =
legislation on the Hill, the Bush administration has sometimes shifted =
the locus of executive policy making so far towards K Street that Bush's =
own appointees are cut out of the process. While environmental groups =
complained loudly about being excluded from meetings of Dick Cheney's =
energy task force, Bush's own energy secretary, Spencer Abraham, was =
barely involved. As Public Citizen pointed out in a February 2003 letter =
to Congress, Joseph Kelliher, a senior advisor to Abraham and his point =
man on the task force, didn't write white papers or propose ideas of his =
own, but merely solicited suggestions from a cross-section of energy =
lobbyists and passed them on to the White House, where they were added =
to the task force's recommendations nearly verbatim. Top administration =
officials then handed the package down to the House, where it was =
approved almost unaltered.
<p>But the flip side of the deal is that trade associations and =
corporations are expected to back the party's initiatives even on =
occasions when doing so is not in their own best interest. When Bush's =
recently passed dividends tax cut proposal was first announced, the life =
insurance industry complained that the bill would sharply reduce the tax =
advantage of annuities sold by insurance companies, potentially costing =
them hundreds of millions of dollars. The industry's lobbyists were told =
to get behind the president's proposal anyway--or lose any chance to =
plead their case. So they did. In mid-March, Frank Keating, the head of =
the industry's trade group and a close friend of Bush's, hand-delivered =
a letter to the White House co-signed by nearly 50 CEOs, endorsing the =
president's proposal while meekly raising the hope that taxes on =
dividends from annuities would also be included in the final repeal =
(which they weren't). Those firms that didn't play ball on Bush's pan =
paid the price. The Electronic Industries Alliance was one of the few =
big business lobbies that declined to back the tax cut, in large part =
because the high-tech companies that make up a good portion of its =
membership don't even issue dividends. As a result, the trade group was =
frozen out of all tax discussions at the White House. The final bill =
reflected the ability of the GOP machine to pass legislation largely on =
its own terms: Whereas Reagan's 1981 tax bill was a Christmas tree of =
special breaks, Bush's was relatively clean, mainly benefiting wealthy =
individuals and small businesses, as the administration had intended.
<p><b>Positively K Street</b>
<p>If you read <i>The Washington Post</i> last spring, you might have =
come across what seemed, on the surface, to be just another small beer =
scandal. This one involved Rep. Michael Oxley (R-Ohio), who heads the =
House Committee on Financial Services. Late last year, Oxley was set to =
launch an investigation of pricing practices in the mutual fund =
industry. But in December, one of his staffers allegedly let it be known =
that Oxley might go easy on the mutual funds if their trade group, the =
Investment Company Institute (ICI), pushed out its Democratic chief =
lobbyist, Julie Domenick. The <i>Post</i>'s reporting caused a minor =
uproar; the House Ethics Committee briefly considered an investigation. =
The press coverage, however, never made clear why a powerful committee =
chairman like Oxley would risk his career over one job on K Street.
<p>What explains Oxley's decision is the same thing that explains why =
the Bush administration would risk angering voters by attempting to =
privatize Medicare: The GOP needs K Street's muscle for long-term =
ideological projects to remake the national government. For years, =
conservatives have been pushing to divert part of Social Security into =
private investment accounts. Such a move, GOP operatives argued, would =
provide millions of new customers and potentially trillions of dollars =
to the mutual fund industry that would manage the private accounts. The =
profits earned would, of course, be shared with the GOP in the form of =
campaign contributions. In other words, by sluicing the funds collected =
by the federal government's largest social insurance program through =
businesses loyal to the GOP, the party would instantly convert the crown =
jewels of Democratic governance into a pillar of the new Republican =
machine. But to make the plan a reality, the GOP needed groups like the =
ICI to get behind the idea--by funding pro-privatization think tanks, =
running issue ads attacking anti-privatization Democrats, and so on. The =
ICI, however, had always been lukewarm to privatization, for which =
conservatives blamed Domenick. Hence, the GOP machine decided she had to =
go. In the end, to quell the Oxley scandal, Domenick was allowed to keep =
her job. But ICI hired a former general counsel to Newt Gingrich to work =
alongside her, and the GOP's campaign to get K Street behind Social =
Security privatization continues.
<p>If the GOP is willing to be aggressive enough, even the federal =
payroll can become a source of patronage. Recently, as part of Bush's =
"competitive sourcing" initiative, the Interior Department announced =
that over half of the Park Service's 20,000 jobs could be performed by =
private contractors; according to the <i>Post</i>, administration =
officials have already told the service's senior managers to plan on =
about one-third of their jobs being outsourced. (Stay tuned for =
"Yosemite: A division of Halliburton Corporation.") But the Park Service =
is only the beginning. Bush has proposed opening up 850,000 federal =
jobs--about half of the total--to private contractors. And while doing =
so may or may not save taxpayers much money, it will divert taxpayer =
money out of the public sector and into private sector firms, where the =
GOP has a chance to steer contracts towards politically connected firms.
<p>Anyone who doubts this eventuality need look no further than Florida. =
There, as <i>New York Times</i> columnist Paul Krugman pointed out last =
year, Gov. Jeb Bush, the president's brother, has outsourced millions of =
dollars worth of work formerly performed by government employees to =
private contractors. There's little evidence that doing so has improved =
state services, as the governor's own staff admits. But it has vastly =
improved the financial state of the Florida Republican Party. According =
to an investigation by <i>The Miami Herald</i> last fall, "[t]he policy =
has spawned a network of contractors who have given [Bush], other =
Republican politicians, and the Florida GOP millions of dollars in =
campaign donations."
<p><b>The New Spoils System</b>
<p>The Bush brothers would not be the first political family to turn =
government contracts into a source of political power. When the current =
mayor of Chicago, Richard M. Daley, won his father's old job 14 years =
ago, civil service reform had already wrecked the old system of =
bureaucratic patronage. So the new mayor began to farm out government =
services to private contractors, many of which returned the favor by =
donating generously to Daley's reelection campaigns. Today, Daley =
dominates Chicago politics almost as thoroughly as did his father. Like =
his father, Daley has used his power, in part, to improve city services =
voters care about, from better schools to the flower beds lining Lake =
Shore Drive. By contrast, the fruits of today's Republican machine--tax =
cuts and deregulation--have been enjoyed mainly by corporations and =
upper-income voters, while federal services, from college aid to =
environmental protection, are getting scaled back.
<p>Indeed, it's striking how openly and unapologetically Bush and his =
party have allied themselves with corporations and the wealthy. The =
rhetoric of compassion aside, no one who pays attention to what goes on =
in Washington could have much doubt as to where the Bush =
administration's priorities lie. If the economy doesn't improve or =
unemployment continues to get worse, the GOP may find it's not such an =
advantage to be seen catering so enthusiastically to monied interests. =
But most Republicans seem confident that the strength they gain by =
harnessing K Street will be enough to muscle through the next =
election--so confident, in fact, that Bush, breaking with conventional =
electoral wisdom, has eschewed tacking to the political center late in =
his term. And if the GOP can prevail at the polls in the short term, its =
nascent political machine could usher in a new era of one-party =
government in Washington. As Republicans control more and more K Street =
jobs, they will reap more and more K Street money, which will help them =
win larger and larger majorities on the Hill. The larger the Republican =
majority, the less reason K Street has to hire Democratic lobbyists or =
contribute to the campaigns of Democratic politicians, slowly starving =
them of the means by which to challenge GOP rule. Already during this =
cycle, the Republicans' campaign committees have raised about twice as =
much as their Democratic counterparts. So far, the gamble appears to be =
paying off.
<p>It wouldn't be the first time. A little over a century ago, William =
McKinley--Karl Rove's favorite president--positioned the Republican =
Party as a bulwark of the industrial revolution against the growing =
backlash from agrarian populists, led by Democratic presidential =
candidate William Jennings Bryan. The new business titans flocked to =
McKinley's side, providing him with an extraordinary financial advantage =
over Bryan. McKinley's victory in 1896 ushered in a long period of =
government largely by and for industry (interrupted briefly, and =
impermanently, by the Progressive Era). But with vast power came, =
inevitably, arrogance and insularity. By the 1920s, Republican rule had =
degenerated into corruption and open larceny--and a government that, in =
the face of rapidly growing inequality and fantastic concentration of =
wealth and opportunity among the fortunate few, resisted public pressure =
for reform. It took a few more years, and the Great Depression, for the =
other shoe to drop. But in 1932 came the landslide election of Franklin =
Delano Roosevelt, and the founding of the very structure of governance =
today's Republicans hope to dismantle. Who knows? History may yet repeat =
itself.=20
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