Lobbying and its Effects on the United States

Author: Caleb Ang Wei-En

Research Head: Ashwin

Image Taken From: What is Lobbying and Can it Be Good? NowThisWorld, Youtube. https://www.youtube.com/watch?v=aTbtKRdYbYo

Jim Hightower, political activist and former Commissioner of Agriculture for Texas, once quipped: “The corporations don't have to lobby the government anymore. They are the government.”

What exactly is lobbying? What is the magnitude of its power, such that it can be used to sway governments?

While each U.S. state has their own unique elements for what constitutes lobbying, the general consensus is that lobbying is an attempt to influence government action through either written or oral communication. Lobbying can be performed by either individuals or organizations, who then carry out public campaigns to pressure governments into specific public policy actions. For example, either passing or defeating legislation.

From 1999 to 2018, across all industries, a total of US$64.3 billion was spent lobbying Congress and federal agencies in the U.S. (Wouters, 2020).

Why is such a large amount of money being spent on lobbying?

Firstly, the money is used to fund campaigns to increase public awareness of policies that lobbyists are hoping to alter/change. This is done through various media outlets, including newspapers, television, and social media. The intended effect of these campaigns is to encourage the general public to be more involved and share their opinion on the matter through official channels, such as contacting their Congressional representatives (McKay, 2012).

Secondly, the money is used to fund research, studies, or surveys to generate empirical evidence to further sway politicians’ opinions.

Lastly, the money is spent on retaining the services of experienced lobbyists. Highly connected lobbyists would be better able to express their viewpoints to senior lawmakers in Congress and other government officials in positions of significant authority.

All in all, the money is spent on ensuring that lobbyists have a high chance of persuading government officials to take the same stand that they do.

However with such a large amount of money spent on influencing public policy, it is natural for one to wonder if lobbying toes a line of illegality/illegitimacy.

According to the First Amendment of the U.S. Constitution, “Congress shall make no law [...] prohibiting the free exercise [...] to petition the Government for a redress of grievances.” (Constitution Annotated) Since lobbyists are trying to persuade government officials to either support or oppose various policy issues, lobbying can be considered a form of petitioning the government for redress of grievances. As such, despite money being involved, lobbying is still considered as a legal exercise.

Congress does acknowledge that the line between lobbying and bribery is a blurry one. To stay on the right side of this line, the courts have carved out several boundaries to ensure that lobbyists do not influence political decisions solely based on monetary incentives. First, lobbyists are not granted the absolute right to speak to a government official, nor are they granted the right to a hearing based on his or her grievances. Furthermore, a government official is not obliged to take action in response to a grievance. In addition, any petition by a lobbyist to a government official does not receive greater protection than any other expression protected by the First Amendment.

Figure 1: Total Lobbying Spending in United States 1998-2021

Source: Statista, Duffin, 2022

U.S.’s political system has always been supportive of lobbyists, as seen from the consistent increase in lobbying expenditure over the past 20 years, reaching an all time high of US$3.73billion in 2021. This can be linked to Biden’s US$3.5T safety net and climate plan, which garnered praise and much attention from various interest groups to support and protect their beliefs.. Lobbyists have been flourishing under Biden’s Administration (Soo, 2021) due to his administration establishing the highest ethical standard of any administration in history, placing stringent safeguards to protect any potential conflicts of interest.

Corporate lobbying generally has a poor reputation, particularly among those who support environmental, health, and consumer fairness legislation.

However, there are still instances of lobbying victories that have done good for citizens.

Lobbying expenditure in the pharmaceutical and health products industry is the highest amongst all other industries, with US$4.95 billion being spent over the past 23 years. Lobbying efforts by the pharmaceutical industry have brought about several bills into legislation, such as the The 21st Century Cures Act, which was signed into law by President Obama in 2016. This bill speeds up drug and device regulatory approval, increases funding for the National Institutes of Health, and approves money to help fight opioid addiction. The legislation also boosts funding for research and treatment for mental illnesses.

In 1997, General Motors partnered with Safe Kids Worldwide, an international nonprofit whose mission is to prevent accidental injury to children, to use its lobbying resources. The nonprofit and the corporate giant came up with the “Buckle Up” program, and successfully lobbied for the increase in the number of states that have booster-seat laws from two in 2002 to 45 in 2008. Additionally, U.S. government statistics showed a 25 percent drop in vehicle crash fatalities for children under 5 from 1997 to 2006, the same period during which General Motors was lobbying(Peterson & Pfitzer, 2009).

In 2002, The Shell Oil Company made use of their resources to combat what was one of the biggest environmental disasters faced by the United States: the loss of coastal wetlands along the Louisiana Delta. Shell supported research on wetlands restoration and partnered with nonprofit organisations to support wetlands restoration projects. The company also sponsored a public awareness campaign: “America’s WETLAND: Campaign to Save Coastal Louisiana”, which sought to raise public awareness and congressional support for large-scale restoration of the coastal area. At the end of this lobbying effort, Shell was successful in initiating the Water Resources Development Act with wetlands provisions for Louisiana.

There have been many marked improvements in different areas, such as in healthcare and in the environment, showing that lobbying can yield positive results.

However, lobbying has its drawbacks. It can be viewed as a method of gaining wealth without making a productive contribution to the economy.

This can be seen as an inefficient use of resources as economically-speaking, resources used for lobbying could have been diverted to producing goods and services for consumers. Instead, lobbyists push resources into policies to benefit themselves, prioritising self-gain over anything else. resulting in a deadweight loss. Every US$1 that a big corporation spends on lobbying, they get an average of $760 in federal support and tax savings, an ROI of 76000% (“Is Lobbying good or bad?”, n.d.). Which top company would choose to miss out on such an investment?

Moreover, lobbying also promotes corruption. Lobbyists can offer Congress members a huge sum of money to work at their lobbying firm. Today, around 50% of Senators and 42% of representatives become lobbyists after leaving Congress. (“Is Lobbying good or bad?”, n.d.) Their motivation? Money. Members of Congress who become lobbyists see their salaries increase on average, by 1,452%. (“Is Lobbying good or bad?”, n.d).This leads to a higher incentive to corrupt as previous Congress members are enticed by the higher salaries to join lobbying firms which could lead to preferential treatment by the government towards these firms, creating a vicious cycle between previous Congress member and lobbying firms.

Lobbying will probably never see an end in the U.S because it is inherent to the political system. It is expected that big players in the different industries will seek to influence government policy to gain preferential treatment.

Economist Thomas Sowell postulates that governments only work with lobbying, stating that “Reform through democratic legislation requires either ‘public consensus or a powerful minority lobby.’” (Weisner, 2021) Lobbying provides an avenue for citizens to participate in democracy, when lobbyists represent their interests and present them to the government.

Moreover, in a book published by Lee Drudman (2015), he reveals that lobbying is a habit-forming addiction for America’s corporations, especially in Washington, where some of the largest companies spend over $1million per annum on lobbying by hiring people needed to successfully influence the government’s policy.

This has become such a problem that even the U.S. government might find it hard to differentiate between lobbying efforts that are actually effective and those that are not.

With the government’s support for lobbying along with the mindset of many large and small corporations that reallocating their resources towards pushing for policies for their self-benefit is very successful and profitable,, it is highly unlikely that lobbying will ever end. It is here to stay.

References

Constitution, U. S. (1787). article I.

Daniel, W. (2021, July 12). Why Lobbying Is Legal and Important in the U.S. Investopedia. https://www.investopedia.com/articles/investing/043015/why-lobbying-legal-and-important-us.asp

Is lobbying good or bad? (n.d.). representUS. https://represent.us/action/is-lobbying-good-or-bad/

Soo Rin, K. (2021, November 3). Lobbying firms connected to Biden White House are flourishing under new administration. abcNEWS. https://abcnews.go.com/Politics/lobbying-firms-connected-biden-white-house-flourishing-administration/story?id=80911720

McKay. (2012). Buying Policy? The Effects of Lobbyists’ Resources on Their Policy Success. Political Research Quarterly, 65(4), 908–923. https://doi.org/10.1177/1065912911424285

opensecrets.org, & CRP. (January 23, 2021). Top lobbying spenders in the United States in 2020 (in million U.S. dollars) [Graph]. In Statista. Retrieved March 12, 2022, from https://www-statista-com.libproxy.smu.edu.sg/statistics/257344/top-lobbying-spenders-in-the-us/

opensecrets.org. (January 24, 2022). Total lobbying spending in the United States from 1998 to 2021 (in billion U.S. dollars) [Graph]. In Statista. Retrieved March 12, 2022, from https://www-statista-com.libproxy.smu.edu.sg/statistics/257337/total-lobbying-spending-in-the-us/

Peterson, K. & Pfitzer, M. (2009). Lobbying for Good. Stanford Social Innovation Review, 7(1), 44–.https://nncg.issuelab.org/resources/1475/1475.pdf

Wouters, O. J. (2020). Lobbying expenditures and campaign contributions by the pharmaceutical and health product industry in the United States, 1999-2018. JAMA internal medicine, 180(5), 688-697.