Lobbyists Win on Health Care, Banking

Remember all that change Americans voted for in November? Well, there's been a change in the plans for change.

The detour has come courtesy of a familiar nemesis: DC lobbyists who, this year alone, have watered-down, gutted, or out-and-out killed ambitious plans for reforming Wall Street, energy, and health care.

The media like to pretend that something's at stake when a big bill is being debated on the House or Senate floor, but the truth is that by then the game is typically already over. The real fight happens long before. And the lobbyists usually win.

They're used to administrations and newly elected Congresses that come in with big plans for the future. But, as Obama and Congressional reformers are finding out, the future doesn't have a well-funded lobby. The past, on the other hand, is extremely well represented.

Look at the auto industry. For decades, Detroit and its lobbyists fought tooth and nail against efforts to improve mileage efficiency standards or to close tax loopholes favorable to gas-guzzling SUVs. They were very successful at holding off the future. Until they went bankrupt.

"While I'm not spoiling for a fight, I'm ready for one," Obama said in his radio address last weekend, referring to his push for a new consumer finance regulatory agency. Let's hope he is, because getting a reform bill that still includes actual reforms through both houses of Congress is easier said than done.

The president has already seen what the lobbyists can do. In May, he signed the Helping Families Save Their Homes Act, and celebrated it as an example of doing "what we were actually sent here to do -- and that is to stand up to the special interests, and stand up for the American people."

But, in fact, those special interests had stood up to him and helped eliminate the most important legislative initiative affecting homeowners -- the cramdown provision in the bankruptcy bill.

It shows just how powerful the lobbyists are: even those representing the banks that helped bring about the financial meltdown still hold sway over our elected officials.

The same goes for the lobbyists representing the credit rating agencies which, despite having played a key role in causing the economic crisis, escaped with barely a wrist slap in the Treasury's big new reform plan. Here's how the Wall Street Journal put it:

If world-class lobbying could win a Stanley Cup, the credit-ratings caucus would be skating a victory lap this week. The Obama plan for financial re-regulation leaves unscathed this favored class of businesses whose fingerprints are all over the credit meltdown.
That's the thing about lobbyists: they serve no ideological master. It's not about right vs left or Democrats vs Republicans. It's only about the bottom line -- ie pushing their special interests, no matter how much it undermines the public interest. No wonder they are as likely to incur the wrath of the Wall Street Journal as Mother Jones.

Last year, 15,000 registered lobbyists spent more than $3.25 billion trying to sway Congress. This year has brought even more of the same. Oil and gas companies spent $44.5 million lobbying Congress and federal agencies in the first quarter of 2009 -- more than a third of the $129 million they spent in all of 2008, which in itself was a 73 percent increase from two years before. Medical insurers and drug companies are also digging deep: 20 of the biggest health insurance and drug companies spent nearly a combined $35 million in Q1 -- a 41 percent increase from the same quarter last year.
Adriana Huffington. the Huffington Post