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Washington: Will the Lobbyists Win?

Susan Biddle/The Washington Post
Robert Byrd, George McGovern, and Gerald Cassidy at a celebration of the thirtieth anniversary of Cassidy’s lobbying firm, Washington, D.C., May 17, 2005; from Robert Kaiser’s So Damn Much Money

After the passage of the $787 billion stimulus bill in mid-February, the Obama administration entered what we might call its second phase in that month’s final week, when the President spoke to a joint session of Congress on February 24 and, two days later, unveiled his first draft budget of more than $3.5 trillion. Rudolf Goldscheid, an early-twentieth-century Austrian Jewish sociologist and reformer, once said, “The budget is the skeleton of the state stripped of all misleading ideologies.” Although we don’t really talk that way anymore, the remark’s meaning still holds true today: the budget is the document through which an administration announces just what sort of polity it envisions, and which fights it is willing to take on to realize that vision.

The Obama vision, in sum, is for a much more activist government that would spend large sums on health care—chiefly, at first anyway, to reduce costs—and preventing climate change, and would finance those ambitions through higher taxes on the wealthy and the elimination of some tax breaks for certain categories of powerful interests: insurers, oil and natural gas companies, large farmers, and banks, to name a few. Although Republicans spoke of tax increases on “hardworking American families,” in the words of Senate Minority Leader Mitch McConnell the day the budget was released, the budget proposal would raise taxes only on American families earning more than $250,000, and even then only starting in 2011, when the Bush tax cuts are set to expire.1

Republicans can be counted on to conflate the wealthiest 2 percent or so of households2 with the more generic and universal “hardworking American families.” That rhetoric constitutes the usual sophistry we’ve heard since Ronald Reagan’s time. But their coming defenses of their corporate benefactors will be in earnest. The Obama budget really does take on several of them. For example, the plan would levy an excise tax on Gulf of Mexico oil for an anticipated $5.3 billion in revenue over ten years. It would impose a fee on nonproducing energy leases, bringing in another $1.2 billion during the same period. It would also close several other smaller oil and gas loopholes.

In proposing to spend $634 billion over ten years on various health care provisions, billed as a mere down payment on larger reform to come perhaps this year, the budget calls for $316 billion in Medicare and Medicaid savings. A significant amount of this would come from reduced government payments to private insurers serving the elderly (many analysts over the years have argued that these insurers have padded their bills and received inflated reimbursements). The plan also calls for the establishment of a so-called cap-and-trade system for the regulation of greenhouse gas emissions, which will force companies that exceed new emissions targets set by the government to purchase credits from companies that stay under those targets. Finally, the budget would cut around $5 billion in payments to agribusinesses and farmers with more than $500,000 in annual revenue, and about $4 billion in subsidies to private banks that make college loans (the number of Pell Grants would be increased to offset this cut).

In other words, the budget takes on oil, gas, insurance, banks, and utilities, among others. Obama, in his Saturday radio-video address at the end of that final week in February, said:

I know these steps won’t sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they’re gearing up for a fight as we speak. My message to them is this: So am I.

A central aspect of Obama’s entire approach to governance has focused on reducing the power and influence of these lobbies. The near-universal assumption appears to be that while he will score wins here and there, and perhaps some significant ones, the lobbyist culture of Washington is a permanent and intractable feature of life. But as I read Robert G. Kaiser’s excellent book, I was surprised to find myself thinking that maybe that culture is not so intractable after all.

So Damn Much Money ends in the twilight of the Bush era and doesn’t even so much as mention Barack Obama. Nevertheless, it is illuminating on the question of the system that Obama is trying to change. Kaiser, the managing editor of The Washington Post during much of the 1990s and now that paper’s associate editor and senior correspondent, traces the story of the rise of the “corroded culture,” as he calls it, largely through the story of one firm and one man, Gerald S.J. Cassidy, who has been one of Washington’s top lobbyists for thirty years.

Cassidy began as a young idealistic liberal with a tough Brooklyn background who investigated hunger and nutrition issues for George McGovern. But Kaiser traces his evolution into a power broker whose personal fortune exceeded $100 million and whose clients included General Electric, Wal-Mart, the Business Roundtable, and Rupert Murdoch’s News Corporation. As he does so, he shows how the lobbying business in Washington grew, along with other developments like the dramatic increase in the cost of election campaigns, leading to the present-day mess.

Cassidy was finishing law school at Cornell in the mid-1960s when he decided to work in a legal aid program for itinerant farm workers in Florida (CBS’s famous Harvest of Shame documentary had made a profound impression on him). He was sent to Fort Myers, where his colleagues included Mickey Kantor, later Bill Clinton’s trade representative. In due course he befriended another young idealist, Kenneth Schlossberg, who worked for the Senate Select Committee on Nutrition and Human Needs. Schlossberg helped Cassidy get a job on the committee’s staff.

McGovern, after his 1972 presidential defeat, began to lose interest in Cassidy and wanted him replaced by another young idealist with a more political turn of mind by the name of Bob Shrum, later famous as a political consultant. In 1975, Cassidy and Schlossberg left Congress and went into business together in the basement of Schlossberg’s Capitol Hill townhouse for the purpose of providing

a broad range of services to industry and government including but not limited to research, counseling, evaluation, planning, policy making and analysis of agricultural, food, nutrition and health programs, policies and products.

As Kaiser notes dryly: “No lobbying there.”

How is a background in matters like poverty and food stamps parlayed into lobbying riches? Well, you start with what you know. A California businessman whose company provided ingredients for school lunches had complained that he had not been paid by the Department of Agriculture. The son of the man who owned the business had met Schlossberg “from the industry side of child nutrition programs” when Schlossberg was on Capitol Hill. Cassidy knew the person to call at the department. The business got its check, and the firm its first fee.

The Kellogg Company then came calling, looking for help to get breakfast cereals included in the school lunch program. The National Livestock and Meat Board wanted a report on how anticipated changes in nutrition policy might affect the cattle industry. The National Frozen Food Association needed a report on congressional attitudes toward supermarkets. “After six months in operation,” writes Kaiser,

Schlossberg-Cassidy was a going concern. Pillsbury, Nabisco, and General Mills had joined its roster of clients. Schlossberg and Cassidy had real income, several thousand dollars a month each.

The cherries really started lining up on the slot machine in 1976, when a Frenchman named Jean Mayer, who had gained attention as a nutritionist at Harvard by chairing a White House conference on nutrition, was appointed president of Tufts. Mayer, sensitive to Tufts’s low status compared to Harvard, wanted to start a world-class nutrition center at the university. Could Cassidy and Schlossberg help somehow? As Kaiser points out throughout the book, one of the first things a resourceful lobbyist does for a paying client is to comb the statutes and regulations looking for an angle. And so:

Cassidy found a law on the books “that you could say authorized a national nutrition center,” as he put it. It had been sponsored by Senator Quentin Burdick of North Dakota, and money had been appropriated for a project in North Dakota under the authorization. As Cassidy realized, its wording seemed to allow room to fund the facility Mayer hoped to create at Tufts.

What Mayer sought was something quite unusual at the time—a specific appropriation for a specific institution to use for a specific purpose. Sound familiar? It should. It was an earmark. Perhaps, Kaiser writes, one of the first. The team’s efforts were not hurt by the fact that the local congressman in Boston was Tip O’Neill, who in short order would succeed Carl Albert as the speaker of the House of Representatives. The Tufts center was funded and built.

No one had quite been aware that a single university could petition Congress on such a matter. But once it happened at Tufts, other universities quickly took notice. Soon Georgetown and then many others were angling for their piece of the action. Cassidy and Schlossberg had invented something. They were delivering. And soon, they were getting rich.

An occasional matter pricked at their consciences. They signed up Ocean Spray, which wanted cranberry juice included in the school lunch program. Schlossberg played a round of golf with members of the board, one of whom “delivered a diatribe against FDR and his works—you’d have thought it was 1932.” The money kept coming, though, from Ocean Spray and many others. The firm’s revenue rose from $700,000 in 1982 to $17.5 million in 1987. But Cassidy was much the more hard-driving, and according to Kaiser he split with Schlossberg at the Democratic Convention in 1984, when long-simmering matters came to a head, the unlikely breaking point being a dispute over whether Schlossberg and his wife could use a limousine the firm had hired to drive about an hour north of San Francisco to look at some Brittany spaniel puppies.

This history is interesting for its own sake, and Kaiser’s narrative skills are formidable. He can make a suspenseful story out of a twenty-five- or thirty-year-old dustup over academic earmarks involving John Danforth, a solemn former Missouri senator. He had ample access to Cassidy, Schlossberg, and all the other principals, and he clearly spent his share of time in the archives looking up the firm’s old contracts.

But where So Damn Much Money really stands out is in the chapters that trace the broader trends that Cassidy’s rise represented. Kaiser explains how earmarks became routine. He describes the explosion in the number of political action committees after the post-Nixon campaign finance reforms of 1974. He surveys the astounding increases in the costs of campaigns, from $77 million for all Senate and House campaigns in 1974 to $343 million just eight years later, with costs for television ads accounting for much of the difference.3 He discusses the rise of the new class of political consultants and the new technologies they began to use, the incessant polling and focus-grouping we know so well today. He analyzes the appearance of what the journalist Sidney Blumenthal termed, in 1980, the “permanent campaign,” which turned lawmaking into a nonstop battle for partisan advantage. He chronicles the rise of Newt Gingrich, who employed these techniques to lead the Republican takeover of the House of Representatives in the 1994 election. And he assesses the towering impact all of this had on the political culture of Washington.

  1. 1

    Further, the press usually doesn’t bother to explain that the higher rate paid by wealthy taxpayers—which will vary from 36 to 39 percent, as opposed to the current 33 to 35 percent—is a marginal rate that will apply only to every dollar earned above the $250,000 mark. Income up to $249,999 will continue to be taxed at the lower rate.

  2. 2

    See this Census Bureau chart at pubdb3.census.gov/macro/032008/hhinc/new06_000.htm. Roughly 2.245 million households, or the top 1.9 percent, had incomes greater than $250,000 in 2007.

  3. 3

    For 2008, according to the Web site opensecrets.org, the total was just under $1.4 billion. See www.opensecrets.org/overview/index.php.

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