America’s Lobbying System is Broken

By: Charlotte Hill, NLC Fellow ’11 | Legislators across the country rely on lobbyists for policy expertise — and that’s a real problem

Editors Note: This is the first in a multipart series analyzing the broken state of American lobbying and identifying workable solutions.

Ask most Americans, and they will tell you that lobbying is a problem in America. Dig a little deeper, and they will tell you that wealthy interest groups use their lobbyists to buy policy influence — that they bribe politicians with campaign donations and private-sector job offers to secure policies that boost their bottom line.

In this series, I argue that America’s lobbying system is indeed broken. Lobbyists do offer lawmakers crucial resources, gaining policy power in the process.

But contrary to popular belief, the most important of these resources is not campaign funding or job offers. Rather, it is policy expertise.

For the past several decades, we have consistently failed to invest in legislative capacity in both state and federal governments — and as a result, lobbyists serve as de facto policy analysts for critically understaffed and underfunded legislative offices.

So long as we fail to invest in government’s capacity to do its own legislative work, lobbyists will have disproportionate influence in our policymaking process.

In this first piece, I describe America’s lobbying landscape: how lobbyists overwhelmingly represent business groups, how that skewed representation leads to policies that harm American voters, and why the problem won’t go away on its own.

Wealthy Interests Dominate

If the lobbying community equitably represented both public and private interests, perhaps lobbyist influence would be less concerning, as it would presumably lead to policy outcomes that served a broad swath of Americans. But this is not the case.

Wealthy interests dominate the lobbying landscape. And while rich individuals sometimes lobby on their pet public interest issues (e.g. George Soros and comprehensive immigration reform), most lobbyists represent business interests — a fact lobbying scholar Lee Drutman calls one of “the most timeless findings in all of political science.”

The raw numbers speak for themselves:

• In 2012, business interests spent $2.57 billion lobbying Congress and the executive branch — more than three quarters of total spending by all politically active organizations.
• For every $1 spent by unions and public interest groups on direct lobbying that year, business interests spent $34.
• Of the 100 highest-spending lobbying organizations in 2012, ninety-five represented business.
• By contrast, “diffuse interest groups and unions have never collectively accounted for more than three of the top 100 spending organizations,” and in recent years “they’ve only been represented either once, twice, or not at all.”

Business groups dramatically outnumber public interest groups at the state level, too.

• Of the 50 groups with the widest lobbying presence in statehouses across the country, 42 represent business interests.
• On average, state lawmakers are outnumbered 6 to 1 by “companies, trade associations, unions or other groups angling for their attention.”
• California has the highest entity-to-lawmaker ratio in the nation, with 30 lobbying groups for every legislator — but 49 out of 50 states have more registered lobbying entities than they do lawmakers. (The lone exception is New Hampshire, which is known for the vast size of its legislature.)

The Public Suffers

When business dominates the lobbying environment, federal and state policy outcomes become distorted, and the public interest suffers.

1. The political agenda is disproportionately focused on business issues — not the needs of the public. Policymakers increasingly spend their time on the issues that matter to business groups. Left off the table are the concerns of broader sectors of the population.
2. Corporations get $4.4 trillion in federal contracts and subsidies. A 2014 Sunlight Foundation report found that lobbying earns corporations a huge return on investment: “for every dollar spent on influencing politics, the nation’s most politically active corporations received $760 from the government.” In other words, taxpayer money is being redirected to the highest-spending business groups.
3. It’s harder to change the status quo — unless you’ve got big business on your side. The policy environment is crowded and competitive, with each group lobbying for its own interests. In order for one group to break through the noise and push its policies through the legislature, it typically needs vast financial resources — an easier feat for corporations and business or trade associations than for public interest groups.
4. Policy is more complex and confusing — which helps special interests hide regressive policies from the public. As legislators try to meet the policy demands of a wide array of business lobbyists, the major legislation that does get passed “is increasingly an incoherent set of compromises necessary to buy the support of a wide range of particular interests.” (A clear case in point is the Affordable Care Act, which ultimately provided $1 trillion in new revenue to insurance companies, largely in the form of subsidies.) Complexity in legislation undermines broad public understanding of policies, and bills drafted by interest groups are particularly (perhaps purposefully) complex. In California, group-sponsored bills are between 27 and 32% longer than non-sponsored bills. As policy gets more complex and confusing, lawmakers can more easily hide special-interest giveaways from the public. As scholar Steven Teles wrote in National Affairs, “The complexity and incoherence of our government often make it difficult for us to understand just what that government is doing, and among the practices it most frequently hides from view is the growing tendency of public policy to redistribute resources upward to the wealthy and the organized at the expense of the poorer and less organized.”

In sum, wealthy interests have skewed the policymaking process in their favor, resulting in distorted policy outcomes that fail to serve the public interest.

Lobbying Isn’t Going Away

This problem will not disappear on its own. Lobbying is a booming industry; over the past two decades, federal lobbying spending by business interests has skyrocketed, increasing by 85 percent between 1998 and 2010. (While this spending has slightly declined in recent years, it is unlikely that lobbying activity has decreased; rather, DC insiders speculate that lobbyists are instead merely adjusting their behavior to avoid meeting the legal threshold for registration — and therefore disclosure. In other words, behind the numbers almost certainly exists a vast and underreported shadow lobbying economy.)

State spending is also on the rise. From 2013 to 2014, registered lobbyists spent at least $2.2 billion to influence state lawmakers — and this number “vastly underestimates the total spent,” as it comes from just 28 states with available data. Each of these states experienced a dramatic increase in lobbying spending over the past 10 years; in six states (North Carolina, New Jersey, Wisconsin, Kansas, Arizona, and Ohio), spending more than doubled.

Not only has spending increased, but so has the number of entities lobbying state legislators. Since 2010, special interest entities have increased their presence in state capitols by ten percent.

Table 1.1. Lobbying is shifting from Congress to the States

Business interests are likely to continue dominating the lobbying environment, because — unlike public interest groups — they have both the means and the motive to lobby.

The means: Hiring lobbyists costs money. Businesses have ready access to capital, along with an existing decision-making structure that allows them to easily allocate funds to political activity. Public interest groups, meanwhile, rarely have consistent, steady sources of income that can be used for lobbying expenses.

The motive: Many potential policy changes would have a concentrated impact on business interests but only a dispersed impact on the general public. As a result, business groups have “the biggest incentive to remain vigilant and active.” For instance, a small policy change might save one company millions of dollars in corporate taxes (a concentrated benefit) while barely costing each individual taxpayer anything, since the cost of the tax break is spread across all taxpayers (a dispersed harm). The company will be highly motivated to lobby for this particular policy change, whereas the broader public will be far less eager to engage.

In short, America’s lobbying problem isn’t going away anytime soon. Wealthy interest groups will continue hiring lobbyists to influence policy — that is, until reformers pass smart policies that change the rules governing lobbyists and legislators.

In the coming pieces, I will further articulate the problem — that is, why lobbyists have so much influence in state and federal government. The crux of my argument is that lobbyists gain their power by providing valuable resources to lawmakers, the most important of which is expertise. To reduce lobbyist influence, then, we cannot merely regulate lobbyist activities. Rather, we must make lawmakers less dependent on lobbyist resources by funding talented, educated policy staffers and by recruiting and retaining qualified public servants.

Charlotte Hill is a policy and communications strategist dedicated to reforming government so that it better serves the public interest. She has a master’s degree in public policy analysis from the University of California, Berkeley. In 2011, Charlotte was a fellow with the New Leaders Council’s San Francisco chapter. The following year, she joined the chapter’s board, where she eventually served as communications chair. Charlotte has received numerous awards for her academic and political efforts, including the Jacob K. Javits Political Leadership Scholarship, the UC Berkeley Graduate Fellowship, and the Aspen Institute Socrates Program Scholarship.