That Used to Be Us: How America Fell Behind in the World It Invented and How We Can
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Mike Murphy, the veteran Republican campaign director who for a time headed Senator John McCain’s 2000 presidential bid, has been to the puppet show and seen all the strings close-up. “When I did my first campaigns as a student at Georgetown [University], there were rules in terms of what you could get away with in an ad,” he explained. “Not anymore. Everyone wants to blame political consultants, but we chase the voters. We give them what they want. They chase this stuff. Here is a question: How can you tell the difference between a negative ad and a positive ad? The negative ad has at least a partial fact in it.”
The toll we’re taking on ourselves is just getting bigger and bigger, said Murphy, who is not running political campaigns anymore. “Our politics [today] is almost like a parasite eating at the national interest for short-term gratification—so that your team can cheer and feel good for a few minutes,” he told us. “If we don’t save the store, the questions between the center right and center left, between apples and oranges, will be irrelevant. We will all be working at TGI Friday’s in Beijing.”
Murphy then paused for a moment to recall one of the best pieces of advice he ever got from a wise old hand in the ad business. “Negative ads work,” the old hand told Murphy, but then added a word of caution: “Do you know why McDonald’s never ran a negative ad against Burger King, saying their burgers were all full of maggots? It might have worked for a year or two but then no one would have ever eaten another hamburger.” The old hand concluded with this piece of advice for Murphy: “Never destroy the category.”
Reflecting on that insight, Murphy note that just at a time when we need politics in America to be at its most credible and constructive in order to define and pursue the national interest, “we’ve destroyed the category.”
Mount Rushmore
These problems are compounded by the fact that the two parties’ programs are rooted in narrow readings of their histories that are much less useful for the future than they were in the past. The parties trace these programs to the two most celebrated presidents not on Mount Rushmore: in the case of the Democrats, Franklin D. Roosevelt, who has had to settle for his profile on the dime; and for the Republicans, Ronald Reagan, whose name adorns a Washington-area airport. Each is regarded as the founder—even the prophet—of the modern version of his party, the man who established the core agenda that defines what it is to be a Democrat and a Republican today. In the case of Democrats, their central priority is the preservation and expansion of federal social welfare programs—which means resisting any modification to Social Security and Medicare and promoting universal health-care coverage. In the case of Republicans it is the reduction of taxes—which means resisting any new tax for any reason at all. At different moments in our history, both agendas made significant contributions to American growth and power. And, to be sure, all other things being equal, continuing to do both would be highly desirable.
But all things are not equal in the wake of the Terrible Twos, and behaving as if they are is getting in the way of our responding—vigorously, sensibly, and expeditiously—to our four big challenges. You wouldn’t know that to listen to the debates today. As Senator Robert Bennett remarked to us, “We have great issues in politics, and then we have great diversions, and we spend most of our political time arguing over the great diversions and never facing the great issues.”
It is not that every issue that each party favors is trivial or unworthy, but if our political system cannot put the nation’s priorities in order—increase revenues, reduce benefits, and reinvest in the sources of our strength—this too will have a huge cost. Ironically, neither party’s iconic president believed precisely what his contemporary disciples think he believed. Roosevelt, although the founder of the modern American welfare state, announced, when campaigning for the presidency in 1932, his intention to engage in “bold, persistent experimentation.” In office, he practiced what he preached. He would surely not have regarded any federal program as untouchable for all time. Reagan, although a champion of low taxes, also embraced fiscal responsibility, and raised taxes when the economics dictated this. But being misunderstood is a characteristic fate of prophets.
To make matters worse, not only do the core agendas of the Democratic and Republican Parties not address the country’s major challenges in ways that promise viable solutions to them, the parties’ almost religious adherence to those agendas is making one of those challenges—the deficit—even more difficult to fix than it otherwise would be. When Democrats advocate increasing government spending while raising taxes only on the wealthy and Republicans call for lowering taxes without reducing spending sufficiently, it becomes impossible for us to address the country’s deficit problem at the scale required. Our fiscal diet of all dessert and no vegetables, the result of uncompromising partisan allegiance to core Democratic and core Republican agendas, has given the country what the columnist Christopher Caldwell has aptly described as “a social-democratic government on an anarchist budget.”
Meet Me in the Lobby
“Lobbyists” are so named, legend has it, because in the 1870s men who wanted things from the government would wait for President Ulysses S. Grant in the lobby of the Willard Hotel next to the White House, hoping to press their cases on him when he stopped by for a nightcap.
It was their right. The first amendment to the Constitution reads: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”
That, strictly speaking, is what lobbyists do: “petition the Government for a redress of grievances.” In our day, more than ever, the act of petitioning the government is dominated by special interests and their lobbyists. The term “special interests” connotes a selfish disregard for the interests of all Americans. Politicians like to boast of serving the national interest or the public interest, but they serve special interests as well, sometimes above all. As government has grown, so have the special interests and their lobbies in Washington—to the point where they often stand in the way of the policies the country needs. No less than hyper-partisan politics, super-funded and super-empowered special interests are crippling our capacity to define and act in the national interest—which involves meeting our big challenges and reviving our formula for prosperity. The attention paid to special interests also diverts our politicians—and our citizenry—from seeing our big problems, and it keeps us from tackling them with the speed, scope, and scale we need.
While it is no longer possible to buttonhole the president of the United States in a hotel bar, ever since Grant’s time lobbyists have plied their trade by influencing politicians and shaping legislation. To do this, they need access to those politicians and the hope of getting a sympathetic hearing for their concerns. They get this access, in no small part, by doing favors for those politicians, including making campaign contributions—which often come close to crossing the line that separates legal from illegal acts. As Russell Long, a former chairman of the Senate Finance Committee, once put it: “The distinction between a campaign contribution and a bribe is almost a hairline’s difference. You can hardly tell one from the other.”
Lobbyists not only donate to campaigns. They also organize fund-raising events for candidates at which others donate. They help to create and operate political action committees that donate to candidates, and sometimes they even serve as finance chairs and treasurers of campaigns. These services naturally earn them the gratitude and goodwill of the politicians they help. As the longtime Senate Republican leader Bob Dole said of political action committees, when they give money “they expect something in return other than good government.”
In our day, the most notorious lobbyist is Jack Abramoff, who was jailed in 2006 after pleading guilty to three criminal felony counts relating to the corruption of public officials and the defrauding of American Indian tribes
whose legalized gambling interests he lobbied for in Washington. The exploits of “Casino Jack” got enough attention to serve as the basis for not one but two feature-length movies. But lobbying actually isn’t notably more corrupt today than it was in the past. In the post–Civil War period, bribery of public officials by railroad interests was standard operating procedure. In the 1920s, the Harding administration presided over the Teapot Dome scandal, in which the secretary of the interior received loans from businesses in exchange for the granting of leases on government-owned oil fields. The best novel about lobbying (and about Washington politics in general), Democracy, by Henry Adams, in which a woman declines to marry a senator after she learns that he has accepted a bribe, was first published in 1880.
Senator Evan Bayh, a Democrat from Indiana, told us a story in which someone asked then senator Bob Dole whether Congress had gotten more corrupt. “And he said, ‘Oh, not even close!’ When he got started in Congress back in the early 1960s, people literally had bags of cash that would be distributed and so forth,” Bayh said. “That doesn’t happen today.” (Now the money comes via campaign contributions, airplane rides, golf outings—and more campaign contributions.)
What is new is the sheer number and power of lobbyists and the interests they represent. In 2010 there were 1,900 firms, employing more than 11,000 lobbyists (more than twenty for every member of Congress), registered to operate in Washington. The lobbyists were paid about $3.5 billion, which was twice as much as they had collectively earned only a decade earlier. Why the growth in their numbers, their salaries, and, most important, their power? The answer is contained in the title of Robert G. Kaiser’s valuable 2009 book about lobbyists, So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government, which we draw on here.
The rising influence of lobbyists on our political life is the consequence of a broad, long-term trend: the steady growth in the size of the American government. Over the decades, the American people, through their elected representatives, have decided that they want their government to do more and more things and to spend more and more money doing them. The federal budget for fiscal year 2010 involved the expenditure of $3.55 trillion, so it is not surprising that special interests hire lobbyists to get it spent on their behalf and not somebody else’s.
Lobbying has its constructive side. Lobbyists can represent small but worthy interests whose voices would otherwise not be heard (such as the group that wants to save the old covered bridge in your hometown), or broad public interests such as environmental protection that have no natural, moneyed, private-sector champions. Lobbyists can also help government officials understand complicated issues involving the companies and interests they work for—and can walk them through the thickets of corresponding legislation. In 2006, the federal tax code was 44,000 pages long, with 5.5 million words. The stimulus bill that Congress passed in early 2009 covered 407 pages. The health-care legislation it enacted the next year was 906 pages long. The financial-reform act of that year took up 2,319 pages. Even the sharpest elected officials cannot hope to understand such bills by themselves. That is where—for good and for ill—lobbyists come in. The diverse and complex nature of so much legislation today opens the way for lobbyists to shape and even write portions of bills, ostensibly for the national interest, certainly for the benefit of the special interests they are paid to represent.
Former senator Simpson has referred to lobbyists as “practitioners of the dark arts” who would, he predicted, resist any serious effort to implement the budget cuts he favored. Behind closed doors, lobbyists work to enact subsidies and to open loopholes that favor already wealthy and not particularly deserving interests, measures that would outrage the public if they received any publicity. As Robert Kaiser, the So Damn Much Money author, noted in an essay on Amazon.com in the fall of 2008:
The House of Representatives set off a sudden collapse of the stock market by voting against the first version of the “bailout” legislation that had been hurriedly written to try to stabilize American banks and other financial institutions. Supporters of the bailout scrambled to change the legislation in ways that would win support for it from a majority of Congressmen. In a matter of days new provisions were added: extension of an excise-tax rebate for makers of Puerto Rican rum (cost to the Treasury, $192 million); extension of a special tax break for the owners of stock car racing tracks (cost, $100 million); a tax break for makers of movies within the borders of the United States (cost over ten years, $478 million) and more. These “sweeteners”—a revealing bit of Washington jargon—did the trick. Days after rejecting the $750 billion bailout, the House approved it.
While there is so much work and money for lobbyists today because of the big, complex, and steadily growing government we have chosen to have, the proliferation of lobbyists can take a toll on a country’s rate of growth—and is already taking a toll on ours. In 1982, the economist Mancur Olson published a book entitled The Rise and Decline of Nations, in which he noted the universal tendency of interest groups to form and to lobby on their own behalf, especially in democracies, where they are free to do so. Olson called these groups “distributional coalitions” because they are “overwhelmingly oriented to struggle over the distribution of income and wealth rather than to the production of additional output.” They concentrate, that is, on gaining larger shares of the economic pie for themselves, not on making the pie bigger.
Over time such groups, in Olson’s words, “slow down a society’s capacity to adopt new technologies and to reallocate resources in response to changing conditions.” That is why special interests pose such a threat to America’s future. Adopting new technologies and reallocating resources in response to changing conditions is precisely what America needs to do.
The fossil fuel lobby (aka Big Oil and Big Coal) has consistently opposed the clean-energy policies needed to respond to the challenges of climate change and America’s oil addiction. The most important such policy is the imposition of a higher price on carbon-based fuels—through a tax on carbon—so that non-carbon sources of energy can become commercially competitive with them. This would hasten the transition from fossil fuels to clean-power technologies and, by weakening our oilexporting adversaries, would make America stronger and more secure internationally. But the oil, coal, and natural gas industries, as well as the U.S. Chamber of Commerce and the National Association of Manufacturers, employ platoons of lobbyists to fight any increase in taxes or clean-air regulations on their fuels, which they say would harm their businesses.
The website ClimateProgress.Org reported (October 3, 2010) that “the oil, gas, and coal industries have spent over $2 billion lobbying Congress since 1999. These three industries combined spent a whopping $543 million on lobbying in 2009 and the first two quarters of 2010. Meanwhile, alternative energy companies spent less than $32 million on lobbying efforts in 2009, and have only spent $14.8 million this year.”
The lobbyists are so effective that their backers can essentially order up a particular policy or change in regulations and the lobbyists will deliver it. An analysis by ProPublica, the nonpartisan investigative news service, about the oil and gas money received by members of the Natural Gas Caucus (January 4, 2011) found that they received “19 times more money from the oil and gas industry between 2009 and 2010” on average than members of Congress who signed a letter in support of a pro-environment proposal to require companies that engage in fracking—a technique to crack open underground formations to unlock natural gas—to disclose the chemicals they use when drilling on public lands.
The most powerful special interest of all is not a labor union or an industry. Most of its members are not wealthy and do not think of themselves as having lobbyists who do their bidding in Washington. Yet it shapes the federal government’s response to one of the country’s most serious problems—our fiscal deficits—and does more to divert resources from the kinds of programs needed to master the challenges America faces than any other group.
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br /> This special interest group is older Americans, and its lobby is the American Association of Retired Persons (AARP). We know this is a controversial position, but it seems to us that older Americans’ interests qualify as “special” because, while a secure and dignified retirement for America’s seniors is vital, that interest has to be better balanced with other vital interests than it is now. If the budgets for Social Security and Medicare cannot be cut at all, then the budgets for education, infrastructure, and research and development will surely be cut too much.
The federal budget deficit exploded during the Terrible Twos, even before the Great Recession of 2008. Even if we see a full recovery from the recession, though, the country’s deficits and debt are on course to explode again because of the rapid rise in the number of older Americans. The retirement of seventy-eight million baby boomers—Americans born between 1946 and 1964—will cause the costs of Social Security and Medicare to skyrocket. Between 2010 and 2020 those costs are expected to rise by 70 and 79 percent, respectively. By 2050, according to Michael Tanner of the Cato Institute, a libertarian think tank, these two programs plus Medicaid will take 18.4 percent of everything the United States produces.
The country has not put aside the money needed to pay the boomers the benefits to which they are entitled by law. The two main programs are funded on a pay-as-you-go basis, with the taxes of people presently in the workforce supporting, through their payroll contributions, those who have retired. The shortfall in revenue at current tax rates as the boomers retire will be immense: into the trillions of dollars. Without serious adjustments—that is, reductions—in Social Security and Medicare benefits, the prospect is for bigger and bigger deficits, requiring more and more borrowing, leading to a larger and larger national debt.