How Money in Politics Hurts You
by Micah Sifry
Dollars and Sense magazine, July / August 2000
Big money is smothering Washington, breaking all the records
for past elections. And Congress has shown no signs of doing anything
about what, in essence, is a crisis of democracy. What was once
exceptional is now routine: the selling of a night in the Lincoln
Bedroom by Clinton's fundraisers; George W. Bush's field-clearing
From prescription drugs and used cars to pesticides on our
food and the minimum wage, the bottom-line fact that our elected
representatives are all painfully dependent on huge contributions
from wealthy special interests skews public policy again and again.
After all, campaign finance is not a specific "application,"
to borrow a metaphor from the world of computers. It is an "operating
system" that shapes who can run for office, what issues get
raised, and which interests get served.
Greasing the system are unlimited contributions of so-called
soft money given to political parties, and direct contributions
to candidates, capped by federal law at $1,000 per candidate for
individuals and at $5,000 per candidate for political action committees.
While corporations ply politicians of both parties with donations,
the Republicans come out ahead as the party controlling Congress,
and therefore much of the lawmaking.
By analyzing the data on contributions of $200 or more, which
campaigns must disclose to the Federal Election Commission, the
Center for Responsive Politics in Washington, D.C., has discovered
some basic facts about how money operates in politics:
* More contributions linked to industry interests come from
individuals (executives, employees and their spouses, and family
members) than from PACs.
* Most of this money flows to the politicians serving on the
congressional committees that oversee each industry. For example,
most banking-industry money goes to members of the finance committees,
regardless of party; agribusiness money flows to the agriculture
committees, etc. Wealthy special interests thus "capture"
their would-be overseers, and purchase many special favors in
return for their campaign contributions.
* Business interests out-gave labor interests by a factor
of 11-to-one in the 1997-98 election cycle. Dirty industries far
outspent greens as well. Federal campaign contributions from resource-exploiting
industries with the greatest interest in blocking and rolling
back environmental regulations-oil and gas, mining, electric utilities,
and automobiles-totaled $48.2 million, compared to just $814,712
from environmental groups.
* The cost of campaigns is skyrocketing, pricing many people
out of political participation as effectively as a poll tax. In
1998,60% of House candidates had a financial advantage over their
opponents of more than 10-to-one. Ninety-eight percent of House
incumbents were re-elected.
* Money doesn't guarantee election, but it buys candidates
their viability. It wards off potential challengers, particularly
within the incumbent's own party. It suppresses the voices of
financially weak candidates and constituencies. It is often decisive-and
it is perceived as such by incumbents and challengers alike.
* Only one-quarter of 1% of the population makes large ($200+)
contributions to political campaigns or parties. Only about 170,000
people contribute $1,000 or more.
* This narrow elite is highly unrepresentative of the general
public. For example, 80% of the donor class makes more than $100,000
a year, compared to just 6% of the overall population.
Just what public policies do these contributions buy?
HOW MONEY IN POLITICS HURTS YOUR HEALTH
Steps to prevent injuries on the job are delayed. Every year,
approximately 650,000 Americans get hurt on the job not from accidents
and related hazards-but from the simple physical demands of their
work. Though most of these injuries can be prevented through the
application of ergonomic principles, physically matching the job
to the worker, a coalition of industry groups has succeeded in
delaying the implementation of new safety rules sought by the
Occupational Safety and Health Administration (OSHA). These 47
groups gave a whopping $8.2 million in PAC money to congressional
candidates in 1997 and 1998.
Your hamburger could kill you. Each year, an estimated 5,000
Americans die and another 77 million get sick from disease-producing
agents in the food they eat. Cases of the dangerous E. coli 0157:H7
bacterium alone have increased from little more than zero 10 years
ago to about 70,000 per year. Yet Congress continues to turn back
efforts to address this grave threat to public health. Since the
beginning of 1995, individuals and PACs connected with the meat
and poultry industry have given nearly $6.9 million to congressional
candidates and party committees, 78% to Republicans. For example,
in June 1998, Rep. Nita Lowey (D-NY) offered an amendment to the
agriculture appropriations bill that would have given the Agriculture
Department the power to assess fines for unsanitary conditions
in meatpacking plants. The House Appropriations Committee rejected
it by a vote of 25 to 19. On average, the 25 members who voted
against Lowey's motion received six times the campaign contributions
from the meat and poultry industry as did the 19 who voted for
Your kids' fruit may be dangerous. It's been four years since
Congress passed the Food Quality Protection Act, but the Environmental
Protection Agency still has yet to take steps to reduce pesticide
use and protect children, who are most vulnerable to pesticide
exposure, from the dangers of pesticide-contaminated foods and
water. Why the foot-dragging by the EPA? Early in 1998, when it
appeared the agency might ban a whole class of pesticides known
as organophosphates as part of its implementation of the Food
Quality Protection Act, the pesticide industry mobilized
in opposition. Leading the counterattack were Rep. Charlie
Stenholm (D-TX), first in the House in contributions from pesticide
interests, and Marion Berry (D-AR), number five in pesticide-related
contributions, who met with Vice President Gore and convinced
him essentially to slow down the EPA's evaluation of organophosphates.
Gore's memo directed the agency to work with the Agriculture Department
(traditionally more sympathetic to the industry's views), pay
close attention to economic concerns, and ensure that the industry
had a say in the proceedings.
You pay exorbitant prices for medication. A September 1998
study by Public Citizen's Health Research Group comparing the
cost of eight leading antipsychotics and antidepressants in the
U.S. and 17 other countries in North America and Europe found
that Americans pay anywhere from 1.7 to 2.9 times more for their
medication. Meanwhile, the drug industry is the most profitable
in the country. Thanks to more than $18.2 million in contributions
from pharmaceutical companies from 1997 to 1999, 65% to Republicans,
Congress has protected corporate monopolies on specific drugs,
while pushing aside Medicare reforms that would lower prices and
improve access for 14 million seniors who lack drug coverage.
Health coverage for the uninsured goes wanting. One out of
six Americans lacks health insurance. Those without insurance
fear what to do if a family member gets sick, and we all pay more
for expensive emergency-room visits. Yet all Congress managed
to do last year was reinstate some Medicare subsidies for hospitals,
managed-care companies, and other health-care providers, who have
supplied nearly $76 million in campaign contributions from 1997
to 1999. Why the gap in legislative coverage? Uninsured Americans
don't have a lobby and they don't make campaign contributions.
Airplane safety goes neglected. Passenger seats on commercial
airlines provide less crash protection than the average seat in
a family car, reports the Center for Public Integrity. Thirteen
years ago, Congress passed legislation telling the Federal Aviation
Administration to require stronger seats,
but it still hasn't been implemented. The number-one recipient
of aviation boodle (more than $303,000 from 1987 to 1998) is Rep.
James Oberstar (D-MN), the former chair of and current ranking
Democrat on the House Transportation and Infrastructure Committee,
which oversees the FAA. Asked by the Center why stronger seats
haven't been mandated so long after legislation calling on the
FAA to do so, he blithely cited the complexities of rulemaking
and cost-benefit analysis, adding "you can spend only so
much time on a subject."
HOW MONEY IN POLITICS HURTS YOUR POCKETBOOK
Your privacy is invaded. Last October, Congress voted to allow
banks, insurance companies, and securities firms to merge, repealing
the landmark Glass-Steagall Act of 1933. In the process, Congress
failed to restrict the growing power of these megabanks to sift
through all the combined financial, credit, and medical data they
have on their customers. Want a loan? You might not get one because
your megabanker knows you have a medical condition. Consumer groups
fought hard against this bill, but in the end they couldn't beat
more than $ 118 million in campaign contributions from the banking,
insurance, and securities sector from 1997- 1999.
Tax cuts go only to the top. The "Internal Revenue Service
Restructuring and Reform Act of 1998" was touted as providing
relief for average taxpayers who have suffered from bureaucratic
abuse in their dealings with the agency, but average taxpayers
are not the bill's primary beneficiaries. Instead, Congress bestowed
big tax breaks on a very select group: the wealthiest 6% of all
Americans who make over $ 100,000 a year. It cannot be a coincidence
that these people dominate the ranks of Congress's campaign contributors.
The minimum wage fails to lift a family out of poverty. It's
been four years since Congress last raised the minimum wage, and
despite polls showing more than 80% of the public in favor of
raising it further, the issue remains snarled by wealthy business
interests seeking "compensation" for another wage increase.
The Senate has passed a bill
spreading a dollar increase over three years, and wrapped
with $75 billion in tax cuts over 10 years ostensibly designed
to help small businesses, but mostly focused on people with higher
incomes. For instance, the bill raises the business-meal tax deduction
from 50% to 80% for most businesses. Hello, three-martini lunch!
The restaurant and hotel industry has invested $12.5 million in
campaign contributions since 1997 with this goal in mind.
College loans cost more. A student borrowing $20,000 will
pay $700 more in interest over the lifetime of the loan because
the banking industry, which contributed more than $ 17 million
to federal candidates and parties in 1997 and 1998, lobbied Congress
to keep it from drastically cutting interest rates on guaranteed
student loans. The 1993 Budget Act had called for a substantial
cut in rates, but before that took effect, in the spring of 1998,
the banks struck back, neutralizing that cut and bumping the effective
rate up significantly. Two weeks before this change cleared the
House Education Committee, its chairman, Rep. Bill Goodling (R-PA),
raked in $14,250 from 48 employees and lobbyists of the USA Group-the
nation's largest student-loan guarantor-at a fund-raiser hosted
for him by the company's president.
More people arc trapped by crippling deficits. More than a
million people filed for bankruptcy in 1999, but despite these
dire straits, Congress is on the verge of passing legislation
that will drastically limit who is allowed to be released from
debt by filing for bankruptcy. The bill passed by the House gives
credit-card companies the right to challenge bankruptcy filings
and gives them an equal claim on debtors' assets with former spouses
seeking child support. A coalition of credit-card companies and
banking associations pushing this bill have given more than $5.7
million in campaign contributions, largely to Republicans, from
1997 to 1999.
Banks get to double-charge you. According to a study by U.S.
PIRG, the average person pays an extra $ 155 per year for the
convenience of drawing funds from ATM machines. In 1998, the Senate
voted to allow banks to continue imposing surcharges on such withdrawals,
with those senators in favor receiving an average of $ 100,000
in contributions from banking interests, compared to those opposed
receiving just $63,000. In the House, commercial banks were the
top donors to Reps. Marge Roukema (R-NJ) and John LaFalce (D-NY),
who sponsored a 1999 bill only requiring banks to disclose their
extra ATM charges, without banning them.
Cable TV bills have skyrocketed. The Telecommunications Act
of 1996, which ended most government regulation o' the communications
marketplace, was supposed to usher in a new age of competition
between telephone, cable, and broadcast companies, | bringing
new choices and lower | rates for America's consumers. Instead,
cable rates have jumped | 21% (through 1999), four times ; the
inflation rate. In the summer of 1998, the Senate killed a proposal
that would have simply asked the FCC to study rising cable rates.
On average, senators voting against the proposal got 21% more
in contributions from PACs and individuals associated with the
cable industry than did senators in favor.
Used-car dealers get to rip you off. Domestic auto dealers
and their PACs gave congressional candidates and party committees
a total of $7.4 million between January 1995 and June 1998, three-quarters
of which went to Republicans. In return, they got a bill through
the House that would make it far easier for car dealers to sell
rebuilt wrecks to consumers-without even having to tell buyers
that the cars had been in accidents. Not only does the sale of
undisclosed rebuilt wrecks cost consumers more than $4 billion,
according to the Consumer Federation of America; often these cars
are incredibly unsafe.
This list doesn't even catalog the thousands of targeted tax
breaks Congress enacts as part of its regular business to subsidize
rich corporations. According to a trenchant series in Time magazine
by investigative reporters Donald Barlett and James Steele, a
privileged group of well-connected and savvy businesses milk $125
billion a year out of the U.S. Treasury in grants, subsidies,
low-interest loans, tax credits, exemptions, deductions, and deferrals
-that works out to more than $1,000 per average taxpayer. And
while these corporations do much of their own lobbying for these
goodies, there's a deeper reason their special deals go unchallenged:
The donor class is also the stock-owning class. According to the
Federal Reserve, while six out of 10 Americans own no stocks,
of the people who make more than $ 100,000 a year, 84% own a lot
of stocks, with a median value of $91,000.
As long as money is a critical ingredient in elections, people
with more money or access to wealth will have a distinct advantage
and people with less will have a pronounced disadvantage. And
those who are thus handicapped include the vast majority of Americans.
Frustrated by the stalemate at the federal level, groups across
the country are trying break the direct connection between private
interests and public officials through state-level reform that
they hope will lead to change throughout the system.
So far, four states have passed laws supporting public financing
of elections for candidates who agree to raise no private money
and to abide by spending limits. But even this reform is no panacea.
Concentrations of money and economic power will still influence
politics through lobbying, independent expenditures, funding think-tanks,
and the like. Other reforms will be needed before anyone can claim
that we have a democracy that works. Equal access to the media,
same-day voter registration, fair ballot access for third-party
and independent candidates, and some form of proportional representation
or instant-runoff voting will still be needed to fully open the
system. Still, the clean money reforms at the state level will
enhance the influence of grassroots organizations on politics
and reduce incumbents' susceptibility to pressure from powerful
donors, thus making other much-needed policy changes more likely.
Only when our elected representatives are freed from their dependence
on private, special-interest funding, will it be possible to right
the many wrongs we're forced to live with.
To get more information about Public Campaign, call 1-877-OUR-VOICE
or visit www.publicampaign.org. To receive Public Campaign's email
bulletin, "OUCH! How Money in Politics Hurts You," from
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Micah L. Sifry is senior analyst at Public Campaign, a nonprofit
in Washington, D.C., promoting clean-election laws in the states.