Welcome to the Machine
How the GOP disciplined K Street and made Bush supreme.
By Nicholas Confessore - Washington Monthly
Carl Rove at work. This article is getting major media play.
When presidents pick someone to fill a job in the government, it's typically a very public affair. The White House circulates press releases and background materials. Congress holds a hearing, where some members will pepper the nominee with questions and others will shower him or her with praise. If the person in question is controversial or up for an important position, they'll rate a profile or two in the papers. But there's one confirmation hearing you won't hear much about. It's convened every Tuesday morning by Rick Santorum, the junior senator from Pennsylvania, in the privacy of a Capitol Hill conference room, for a handpicked group of two dozen or so Republican lobbyists. Occasionally, one or two other senators or a representative from the White House will attend. Democrats are not invited, and neither is the press.
The chief purpose of these gatherings is to discuss jobs--specifically, the top one or two positions at the biggest and most important industry trade associations and corporate offices centered around Washington's K Street, a canyon of nondescript office buildings a few blocks north of the White House that is to influence-peddling what Wall Street is to finance. In the past, those people were about as likely to be Democrats as Republicans, a practice that ensured K Street firms would have clout no matter which party was in power. But beginning with the Republican takeover of Congress in 1994, and accelerating in 2001, when George W. Bush became president, the GOP has made a determined effort to undermine the bipartisan complexion of K Street. And Santorum's Tuesday meetings are a crucial part of that effort. Every week, the lobbyists present pass around a list of the jobs available and discuss whom to support. Santorum's responsibility is to make sure each one is filled by a loyal Republican--a senator's chief of staff, for instance, or a top White House aide, or another lobbyist whose reliability has been demonstrated. After Santorum settles on a candidate, the lobbyists present make sure it is known whom the Republican leadership favors. "The underlying theme was [to] place Republicans in key positions on K Street. Everybody taking part was a Republican and understood that that was the purpose of what we were doing," says Rod Chandler, a retired congressman and lobbyist who has participated in the Santorum meetings. "It's been a very successful effort."
If today's GOP leaders put as much energy into shaping K Street as their predecessors did into selecting judges and executive-branch nominees, it's because lobbying jobs have become the foundation of a powerful new force in Washington politics: a Republican political machine. Like the urban Democratic machines of yore, this one is built upon patronage, contracts, and one-party rule. But unlike legendary Chicago mayor Richard J. Daley, who rewarded party functionaries with jobs in the municipal bureaucracy, the GOP is building its machine outside government, among Washington's thousands of trade associations and corporate offices, their tens of thousands of employees, and the hundreds of millions of dollars in political money at their disposal.
At first blush, K Street might not seem like the best place to build a well-oiled political operation. For most of its existence, after all, the influence industry has usually been the primary obstacle to aggressive, ambitious policy-making in Washington. But over the last few years, Republicans have brought about a revolutionary change: They've begun to capture and, consequently, discipline K Street. Through efforts like Santorum's--and a House version run by the majority whip, Roy Blunt (R-Mo.)--K Street is becoming solidly Republican. The corporate lobbyists who once ran the show, loyal only to the parochial interests of their employer, are being replaced by party activists who are loyal first and foremost to the GOP. Through them, Republican leaders can now marshal armies of lobbyists, lawyers, and public relations experts--not to mention enormous amounts of money--to meet the party's goals. Ten years ago, according to the Center for Responsive Politics, the political donations of 19 key industry sectors--including accounting, pharmaceuticals, defense, and commercial banks--were split about evenly between the parties. Today, the GOP holds a two-to-one advantage in corporate cash.
That shift in large part explains conservatives' extraordinary legislative record over the last few years. Democrats, along with the press, have watched in mounting disbelief as President Bush, lacking either broad majorities in Congress or a strong mandate from voters, has enacted startlingly bold domestic policies--from two major tax cuts for the rich, to a rollback of workplace safety and environmental standards, to media ownership rules that favor large conglomerates. The secret to Bush's surprising legislative success is the GOP's increasing control of Beltway influence-peddlers. K Street used to be a barrier to sweeping change in Washington. The GOP has turned it into a weapon.
Lobbyists on a Leash
To see how effective this machine can be, one need only compare the Bush administration's current push to reform Medicare with Bill Clinton's 1993 attempt to pass universal health insurance. Both set out to enact revolutionary changes in the nation's health-care system. And by most measures, Clinton would have seemed more likely to succeed, having staked his presidential campaign on the popular issue at a time when Democrats controlled both houses of Congress. By contrast, Bush rarely mentioned Medicare during his campaign, and enjoys much slimmer majorities in Congress. Furthermore, although his prescription-drug benefit is popular, Bush's stated goal of moving more seniors into private health plans is most definitely not. Yet where Clinton's plan met an ignominious death, Bush's appears headed for speedy passage.
There were, of course, many reasons why Clinton failed, from mishandling relations with congressional leaders to the perceived insularity and arrogance of the task force of policy wonks Hillary Clinton assembled to tackle the challenge of achieving universal health care. But another major obstacle was the business and health-care interests on K Street. Clinton worked to win their backing. Among other things, his plan would have capped employer contributions to workers' health insurance at a level far below what many large companies, like General Motors and Kodak, were already paying to their employees' health plans, saving the companies billions of dollars. But some of those firms nevertheless denounced Clinton's plan after it was unveiled, rightly believing that they could bid up the price of their support even more. Meanwhile, conservative activists, eager to deny a new Democratic president his first major political victory, worked to convince business lobbyists that they would gain more by opposing Clinton than by supporting him. As more and more K Street lobbies abandoned Clinton, the plan went down to defeat.
Bush has taken a different approach. Instead of convening policy wonks to solve a problem, he issued a price tag and a political goal: Set Medicare on the road to privatization. When legislators from both parties balked at his initial proposal to offer more generous drug benefits to seniors who left Medicare for private plans, Bush dropped it--but retained incentives to lure seniors into the private market. What he didn't have to do was fight K Street, because the lobbyists were already tamed. Those health-care interests that had doubts about Bush's plan have been successfully pressured to keep quiet. Most of the rest have given Bush their full support.
A good example is the pharmaceutical industry. Drug companies have a natural affinity for the GOP's effort to move seniors into private plans, because if Medicare were to begin providing prescription drugs, its bargaining power could drive down drug prices. But over the past few years, Republican leaders have carefully cultivated and cajoled the industry. The upper ranks of its Washington trade group, PhRMA, are stocked with former aides to powerful Republicans, and its political behavior reflects it: The industry, which gave roughly evenly during the fight over Clinton's health-care plan, now contributes 80 percent of its money to Republicans. PhRMA has essentially become an extension of the GOP. It supported Bush's plan with a multimillion-dollar ad campaign even before the plan had been finalized and made public, and continued its support even as Bush compromised in ways that went against the drug industry's interests. By contrast, large corporations waited to see what Clinton's plan looked like and then haggled over its details, while health-care companies funded the famous "Harry and Louise" ads that eventually helped sink it.
Bush's Medicare legislation could still stall or get watered down. But the fact that the White House and the GOP have pushed it so far, so fast, regardless of the risk and downside, hints not only at the power of an organized K Street, but at the political end to which it is being directed. For years, conservatives have tried and, mostly, failed to significantly reduce the size of the federal government. The large entitlement programs in particular command too much public support to be cut, let alone abolished. But by co-opting K Street, conservatives can do the next best thing--convert public programs like Medicare into a form of private political spoils. As a government program, Medicare is run by civil servants and controlled by elected officials of both parties. Bush's legislation creates an avenue to wean people from Medicare and into the private sector--or, at least, a version of the private sector. For under the GOP plan, the medical insurance industry would gradually become a captive of Washington, living off the business steered to it by the government but dependent on its Beltway lobbyists--themselves Republican surrogates--to maintain this stream of wealth. Over time, private insurers would grow to resemble the defense sector: closely entwined with government, a revolving door for Republican officials, and vastly supportive, politically and financially, of the GOP. Republicans are thus engineering a tectonic political shift in two phases. First, move the party to K Street. Then move the government there, too.
Rise of the Machine
The emerging Republican machine is the mirror image of that built by the Democratic Party under Franklin D. Roosevelt and his successors. The edifice of federal bureaucracy that emerged between the 1930s and the 1960s shifted power and resources from the private sphere to the public, while centralizing economic regulation in federal agencies and commissions. Democratic government taxed progressively, then redistributed that money through a vast and growing network of public institutions. Those constituencies that Democratic governance serviced best--the working class, the poor, veterans, the elderly, and, eventually, ethnic and racial minorities--made the Democrats the majority party. "Tax and tax, spend and spend, elect and elect," as Roosevelt's aide Harry Hopkins put it, became the basis of Democratic power.
For many years, most business leaders adopted a conciliatory approach to the new system and accepted its basic premises. But during the 1970s, prodded by intellectuals like Irving Kristol and Lewis Powell, businesses began funding a new wave of aggressively ideological think tanks and advocacy groups to challenge the intellectual underpinnings of Democratic governance. Corporations sought influence by opening Washington offices, launching PACs, and pouring money into their trade associations. Savvy GOP operatives steered that money toward the Republican Party. Between the early 1970s and mid-1980s, the number of trade associations doubled; between 1981 and 1985, the number of registered lobbyists in Washington quadrupled, vastly augmenting business power and giving rise to K Street.
But there was a limit to what these groups could accomplish: Democrats still enjoyed an entrenched majority in Congress. The need to cultivate them meant that K Street's immediate interests would never align with the GOP's even if, more often than not, their long-term interests did. As a result, there emerged a broadly bipartisan lobbying culture. To facilitate broad access, most trade associations hired lobbyists from both parties, who were expected to be pragmatic and nonideological. Although certain industries may have had traditional ties to one party, most corporate PACs distributed money roughly equally.
This culture flourished even during Ronald Reagan's two terms. When Reagan was elected and Republicans won the Senate, GOP activists urged business to donate more to their party. But a little-known California Democrat named Tony Coelho stopped them in their tracks. As chairman of the Democratic Congressional Campaign Committee, he reminded business lobbyists that his party still controlled the House and, with it, the committees and subcommittees through which any legislation would have to pass. At the same time, he worked to convince businessmen that Democrats, too, could deliver for them. During Reagan's first two years, Coelho tripled the DCCC's fundraising. So even as the Republican realignment chugged ahead, Democrats retained a rough parity on K Street.
But while Democratic power endured, it contained an inherent tension. For the most part, K Street groups supported Democrats because they had to and Republicans because they wanted to. The Democrats needed corporate money to stay competitive, but were limited by the pull of their liberal, labor-oriented base. Although the party became generally more pro-business during the 1980s, it had few natural constituencies on K Street. At best, control of Congress allowed Democratic leaders to cut occasional deals with business interests, delivering key compromises--a tax break here, a floor vote there--in exchange for a portion of business giving.
Thus, under Democratic rule, the private sector remained unorganized, with lobbyists wielding huge influence, but in the service of a thousand different agendas and interests. And, as these multiplied, K Street became an obstacle to any large reforms. Lobbyists grew adept at larding ambitious legislation with special-interest provisions. When a reform threatened a large enough bloc, ad hoc coalitions could defeat almost anything, regardless of its popularity with voters. This inherent incoherence disadvantaged Republican presidents as much as it later would Clinton. Reagan's 1981 tax cut, primarily intended as an across-the-board rate reduction for individuals, passed Congress as a special-interest bonanza adorned with far more corporate loopholes and special breaks than his advisers had planned, so ballooning the federal deficit that Reagan spent the remainder of his presidency ratcheting taxes back up, four times between 1982 and 1984 alone. "The hogs were really feeding," David Stockman, Reagan's budget director, later confessed. "The greed level, the level of opportunism just got out of control."
The DeLay School
It took something that hadn't happened in 40 years to begin to change the culture of K Street: In 1994, Republicans won control of Congress. All of a sudden, the Democrats' traditional power base evaporated, and with it much of their leverage over lobbyists. New Republican leaders like Newt Gingrich, Dick Armey, Tom DeLay, and a handful of close advisers like Ed Gillespie and Grover Norquist, quickly consolidated power in the House, and turned their attention to the lobbying community. Revolutionaries all, they nursed a deep disdain for K Street pragmatism. "They had a hard time dealing with lobbyists who were used to dealing with Democrats [and] were looking at ways to change this in the interests of the [conservative] coalition," says one conservative activist.
One way was to start ensuring that the new GOP agenda of radical deregulation, tax and spending cuts, and generally reducing government earned the financial support they thought it deserved. In 1995, DeLay famously compiled a list of the 400 largest PACs, along with the amounts and percentages of money they had recently given to each party. Lobbyists were invited into DeLay's office and shown their place in "friendly" or "unfriendly" columns. ("If you want to play in our revolution," DeLay told The Washington Post, "you have to live by our rules.") Another was to oust Democrats from trade associations, what DeLay and Norquist dubbed "the K Street Strategy." Sometimes revolutionary zeal got the better of them. One seminal moment, never before reported, occurred in 1996 when Haley Barbour, who was chairman of the Republican National Committee, organized a meeting of the House leadership and business executives. "They assembled several large company CEOs and made it clear to them that they were expected to purge their Washington offices of Democrats and replace them with Republicans," says a veteran steel lobbyist. The Republicans also demanded more campaign money and help for the upcoming election. The meeting descended into a shouting match, and the CEOs, most of them Republicans, stormed out.
DeLay's attempt to corral the private sector stalled soon after. While corporate giving took on a more Republican cast and more Republicans began to be hired, the GOP leadership experienced significant pushback, for two reasons. One was that Democrats still controlled the White House. The other was that, by most measures, Clinton's presidency had been very good for business, especially for the large corporations who had supported Clinton's efforts to bring the budget deficit under control. By 1996, corporate and trade association PACs still gave roughly three-quarters of their money to both parties' incumbents. After Clinton's 1996 reelection, Gingrich's subsequent combustion, and Democratic gains in Congress two years later, the bipartisan lobbying culture remained largely intact.
It took the 2000 elections, which gave Republicans the White House and Congress, to completely change the climate. In the months after, Santorum became the Senate's point man on K Street and launched his Tuesday meetings. Working on the outside, Norquist accelerated what he calls the "K Street Project," a database intended to track the party affiliation, Hill experience, and political giving of every lobbyist in town. With Democrats out of power, these efforts are bearing fruit. Slowly, the GOP is marginalizing Democratic lobbyists and populating K Street with loyal Republicans. (DeLay alone has placed a dozen of his aides at key lobbying and trade association jobs in the last few years--"graduates of the DeLay school," as they are known.) Already, the GOP and some of its key private-sector allies, such as PhRMA, have become indistinguishable.
END OF PART ONE |
