Farewell to the Congress of corporate interests
12/26/10 8:05 PM
This past term of Congress let the drug industry write much of a health
care overhaul, extended of ethanol subsidies, passed the Marlboro
Monopoly Act, crafted a subsidy-laden stimulus bill, gave us
Cash-for-Clunkers and Cash-for-Caulkers, tried to pass a
corporate-backed climate bill, and created a Wall Street "reform" that
Call it the corporatist Congress.
H.R. 1, the first undertaking of the 111th Congress, was the $800
billion stimulus bill, a cornucopia of corporate welfare and special
favors. The New York Times reported in early 2009, "the industries that
stand to gain most from the proposed legislation were also working to
help shape it even before Mr. Obama had won the election."
These included the likes of Google and other tech firms, but also the
coal and power industries, whose five-year joint lobbying effort
finally paid off with a billion-dollar earmark for a clean-coal project
The stimulus also created special subsidies for electric cars,
high-speed rail, and other "green" technologies, including a
"Production Tax Credit" for windmills -- allowing companies like
General Electric to be paid, up front, for building windmills, even if
they never spin. While profiting handsomely from these targeted tax
breaks, GE also got $24.9 million in stimulus money for its Global
In June, Congress passed a tobacco regulation bill known on K Street as
the Marlboro Monopoly Act. Philip Morris, by far the largest tobacco
company, had been backing the bill for a decade, knowing it would crush
smaller competitors and lock in its market share.
Cash-for-clunkers transferred tax dollars to the automakers and car
dealers who had proposed it, while driving up the price of new and used
cars for everyone.
The encore was Cash-for-Caulkers, a home renovation bill backed by the
Chamber of Commerce, the National Association of Manufacturers, and Dow
Chemical, who all get the subsidies.
The lame-duck session tax extender bill got attention mostly for the
income tax increases Democrats had wanted and Republicans blocked, but
the final bill also extended ethanol subsidies -- naked corporate
welfare by any honest measure -- and created a special tax break on
"active financing" for multinational corporations and banks. This last
break was the fruit of a lobbying effort by a coalition of corporate
giants who hired Democratic superlobbyist Steve Elmendorf, who was
chief of staff to former House Democratic leader Dick Gephardt.
The major regulatory efforts by this Congress -- all of which Democrats
heralded as broadsides to greedy big business -- included outright
corporate-welfare giveaways (cap and trade) to lukewarm measures that
in the long run will protect the big guys (the Wall Street bill), and
something in between (health care "reform").
Let's start with the least corporatist of the big three -- the
financial regulation bill. The bank lobby lost a lot of battles in this
war (and in retaliation gave almost as much to Republicans as to
Democrats), and the measure certainly will crimp the biggest banks'
profits in the short term. But the central promise of the bill -- to
prevent future bailouts -- was never delivered. In fact, the bill's
"resolution authority" increases big banks' advantage by guaranteeing
While Goldman Sachs CEO Lloyd Blankfein said, "We will be among the
biggest beneficiaries of reform," the big winners are probably the
hedge funds, which are far closer to the Democrats, especially Banking
Committee honchos Chris Dodd and Chuck Schumer.
Health care reform was more explicitly corporatist. While Obama was
praising the Senate a year ago for "standing up to the special
interests," the largest single-industry lobby in the country was
singing the bill's praises. The Pharmaceutical Research and
Manufacturers of America, under the guidance of former Rep. Billy
Tauzin, ran the table in health care reform. The bill's subsidies,
mandates and lengthy government-guaranteed monopolies enriched the drug
companies so much they desperately rallied to save the Democratic
supermajority in the Senate by raising funds for hapless Senate
candidate Martha Coakley in the Massachusetts special election.
While the insurers take a hit from the measure, the bill does, after
all, require every American to buy health insurance.
And the cap-and-trade bill the House passed, with subsidies and free
credits handed out like Halloween candy -- well, Obama budget director
Peter Orszag said that sort of policy would "represent the largest
corporate welfare program that has ever been enacted in the history of
the United States."
Big business isn't alone in reaping the fruits of the 111th Congress.
The lawmakers and staffers who wrote these bills are already cashing
out to lobby for the affected companies. As for the Republicans,
they're brimming with high-minded talk right now, but in fact they
can't wait for their turn at the trough.
Read more at the Washington Examiner: