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 fundraising orgy.

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?


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 it.

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."


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 To receive Public Campaign's email bulletin, "OUCH! How Money in Politics Hurts You," from which this article is drawn, send a one-line email message to reading '"subscribe ouch."


Micah L. Sifry is senior analyst at Public Campaign, a nonprofit in Washington, D.C., promoting clean-election laws in the states.

Politics watch