Eight months into its current session, Congress has passed no major legislation.
Republicans control both houses and the White House, yet they failed to produce a new healthcare bill. Now, as legislators' shift their focus to tax reform, the effort appears to be growing less ambitious by the day.
It can be tempting to declare that this is a do-nothing Congress. But a review of public disclosure records shows that Congress is unusually busy … being lobbied by interest groups and businesses.
Lobbyists are on track to spend more money this year than any year since 2010. People who study money in politics say that expected increase stems from a single party controlling the Congress and executive branch, as well as from expected legislation that usually comes at the beginning of a new president's term.
But some of the increase also comes from the unique array of issues coming before Congress. An anticipated healthcare bill drew increases in spending from insurers, hospitals, drug companies, and other related healthcare companies. And the prospect of a major tax reform bill for the first time in more than a decade is attracting the attention of businesses in a variety of industries.
Added to that, of course, are the usual yearly efforts by lobbyists to have a say in spending bills and budgets. And because Washington's regulatory and legislative reach is so vast, they also spend money tracking and influencing legislation that might sound inconsequential to the public but has big effects on the finances of their companies and industries.
For all the talk from President Trump on the campaign trail of "draining the swamp," the swamp seems to be thriving in his first year in office. The administration has enacted some minor lobbying and ethics rules by executive order early in Trump's presidency, but has not pushed for major legislation regulating lobbying. Advocates are hopeful that the administration and Congress will push campaign and lobbying reform plans after completing tax reform.
Publicly available records, which must be filed every quarter, show that companies and interest groups spent $1.67 billion on lobbying through June this year, according to the Center for Responsive Politics, a Washington research group that tracks money in politics and publishes the records on its website.
If the second half of the year keeps the same pace, the total for 2017 would be about $200 million more than the $3.15 billion spent last year and the most since the beginning of the Obama administration. The highest amount on record was in 2009, when lobbyists spent $3.5 billion. That was the year President Barack Obama took office with solid Democratic control of the House and Senate.
Lobbying spending tends to rise at the beginning of a new president's term, says Tim LaPira, a political science professor at James Madison University who studies Congress and lobbying.
"Lobbying goes up when there is an expectation that the government is going to be active and going to be doing things," he said. "It doesn't matter if it's in a liberal direction or a conservative direction, just as long as Congress was going to be doing something."
Although lobbying conjures up images of arm-twisting in smoke-filled rooms, or promises of campaign cash over boozy and leisurely lunches, most of the expense of lobbying is far more ordinary. Typically, lobbyists spend their time monitoring the status of regulations and legislation and reporting back to their companies or associations. They also communicate with legislators and staff members and can provide subject-matter expertise and points of view that might not otherwise be represented in Washington.
Lobbyists have been around Washington since the country's early days. But modern-day organized lobbying by businesses really took off beginning in the 1970s as a response to an explosion of business regulations in the 1960s. Over the years, Congress has passed laws mandating disclosure of lobbying expenses as a way to provide transparency to the process. Many companies and industry associations prefer not to discuss lobbying with reporters, instead referring to disclosure forms that summarize expenses and detail issues and lobbyist names.
Nowadays, companies in nearly every economic sector, from giant automakers to small trash collectors, have some kind of representation in Washington. Sometimes, they have their own lobbyists, but often they hire Washington firms or participate in industry associations that lobby or hire lobbyists. Because the stakes are so high, many companies now see lobbying as a cost of doing business, apparently believing the old saying that "if you're not at the table, you're on the menu."
Spending on lobbying has increased dramatically over the years, more than doubling in the last two decades. LaPira says that ordinarily, spending on lobbying during the first year of a new administration might be expected to rise even more dramatically than it has. Friction between President Trump and leaders of Congress might lead some interest groups to sit on the sidelines if they are convinced nothing will get accomplished. In August, Senate Majority Leader Mitch McConnell, R-Ky., said Trump had "excessive expectations about how quickly things happen" in Congress. Trump responded on Twitter that McConnell "failed" on healthcare reform because he "screamed Repeal & Replace for 7 years, couldn't get it done."
"The real disconnect here is that in normal times, the expectation would be that we'd have a relatively active Congress in the first 100-200 days of a new presidency under unified government," LaPira said. "That has not happened. The uptick was based on the expectation in normal times, but politics today is less than normal."
Still, with tax reform and the budget on the agenda for the fall, businesses and interest groups could be spending even more on lobbying in the second half of the year than in the first. That's because while healthcare directly affects only a few big industries, changes in tax policy alter the bottom lines of nearly every business. Credits, carve-outs, and incentives have the potential to be big money for businesses in many different sectors.
"Tax reform is going to bring them out," said Sarah Bryner, the Center for Responsive Politics' research director. "And the budget is a major package. If those two things are truly on the agenda, we're going to see a huge increase."
The biggest spenders
As in the last few years, the industries with the most at stake in this year's healthcare debate were those that spent some of the most money on lobbying in the first half of 2017. Four of the top 10 industries ranked by the Center for Responsive Politics are connected to health or insurance. Pharmaceuticals and health products led the pack with $144.8 million in lobbying spending from January to June, followed by insurance with $78.8 million. Hospitals and nursing homes were No. 7 ($49 million), and health professionals were No. 8 ($47 million).
The biggest spender in those groups was the Pharmaceutical Research and Manufacturers of America, or PhRMA, which spent a total of $14.2 million in the first six months of the year, which is about three-quarters of what it spent in all 12 months of 2016. Lobbying reports show that PhRMA had 24 lobbyists working on a variety of issues related to drug pricing and that it also contracted with 39 outside lobbying firms. A PhRMA spokeswoman declined to discuss the association's lobbying efforts. The association's website says it represents the country's top biopharmaceutical research companies and supports the search for new treatments and cures. It lists 37 member companies, including well-known names such as Bayer Corp., Pfizer Inc. and Merck & Co. Inc., each of which also reported spending several million dollars this year on their own lobbying operations.
Among all industries and issues, the biggest spender so far in 2017 was the U.S. Chamber of Commerce, which spent $40 million. The business association's policy goals span many different areas, including education, energy, healthcare, and immigration reform. Its lobbying report lists at least 35 in-house lobbyists who worked on dozens of bills on a variety of topics, as well as contracts with seven outside firms. Spending in the first six months was actually less than half of what the Chamber spent in 2016.
In a statement to the Washington Examiner, Chamber spokeswoman Blair Latoff Holmes said: "Our second quarter lobbying report is a reflection of our continuing efforts to defend free enterprise, foster job creation, and spark greater economic growth. We trained our focus on supporting regulatory relief through the Congressional Review Act and laid the groundwork for a tax reform push. We expect our spending to increase as Congress turns its attention to, among other topics, tax reform and to infrastructure investment, which are two key priorities for the business community."
One association with big spending increases in 2017 was the National Retail Federation, which spent $7.3 million in the first six months, according to the Center for Responsive Politics. That's more than the $7.1 million it spent in all of 2016.
David French, the NRF's senior vice president for government relations, says that increased spending reflects an active period in which retailers worked hard to combat a proposed border-adjustment tax, fought proposals that would raise fees on debit cards, and remained engaged on trade and healthcare. The association worked with retail members, encouraging them to bring employees and their families to Washington and to invite members of Congress to stores to make the pitch that imposing a border-adjustment tax would affect real people.
"This was very much an all-hands-on-deck exercise," he said. In July, Republican leaders dropped plans to include the new tax in any tax-reform package. The revenue from the tax had been seen as a possible way to fund tax cuts and other changes to the tax code.
French says Congress hasn't produced major legislation yet, but that doesn't mean nothing is happening on Capitol Hill. "There are things going on. The only way to protect yourself is being engaged in the conversation. … I don't know of anybody who would shut down their vigilance on lobbying because they assume that Congress won't do anything. I think that would be a mistake."
A major increase in spending by tech companies has been one of the biggest stories over the past few years in the lobbying world. As they gain size, power, and wealth, tech firms have seen the importance of a stepped-up Washington presence.
Between 2010 and 2016, Internet companies such as Amazon, Facebook, and Google's parent, Alphabet, have tripled the amount they spend on Washington lobbying. In 2010, for instance, Facebook spent just $351,000 on lobbying. So far this year, it has spent $5.6 million. Its lobbying reports for this year say the company has worked on issues including immigration reform, cybersecurity and foreign trade. Google's parent company spent $9.5 million on issues such as email privacy, intellectual property and online advertising.
Many emerging companies that face new regulations decide to start investing more heavily in lobbying, Bryner says. A similar example is the marijuana industry, which spent $450,000 on lobbyists in the first six months of the year, double the amount in the same period a year earlier.
"Whenever you see an industry that didn't used to be regulated becoming regulated, you are going to see a lot of people wanting to influence those regulations," Bryner said.
Firms rake it in
This year's increase in lobbying spending also translates to a boom in business for Washington's lobbying industry. When companies or associations aren't big enough to employ their own lobbyists, they can outsource that work to specialists. Even big companies and associations with their own lobbyists often hire firms with a lobbying practice.
So far in 2017, the biggest recipient of lobbying money is Akin Gump Strauss Hauer & Feld LLC, an international law firm with a large lobbying practice. Akin Gump has been atop the list every year since 2014. So far this year, it has taken in $19.2 million, according to publicly filed reports. If the firm keeps taking money in at that pace for the rest of the year, it will exceed its lobbying revenue from last year. The firm's 38-page annual report for 2016 rarely mentions the term "lobbying." Instead, it says for instance that clients such as ICANN hired the firm "to assist with legislative strategy" related to the Obama administration's successful plan to privatize the management of Internet domain names.
Hunter Bates, co-leader of Akin Gump's public law and policy practice, says businesses are more enthusiastic about the political process this year because Republicans control the executive and legislative branches, which represents an opportunity to push a business-friendly agenda.
"The biggest change we've seen since the November election is not that the business community is engaging, it's that the business community is moving from defense to offense," said Bates, who previously served as McConnell's chief of staff. "For the past eight years, most businesses woke up every day and tried to figure out how they could mitigate the negative things the government was pushing out. With the election of President Trump, and with Republicans controlling the House and Senate, the business community has moved to offense, where they can look to try to put points on the board to grow the economy."
He says the slow pace of legislation so far is due to the slim Republican majority in the Senate, but that businesses recognize they have a real chance to advance their issues. "The fact that there is such an opportunity to get things moving is a reason why companies can't afford to not be on the playing field," Bates said.
Just looking at reports from companies and associations starting with the letter "A," Akin Gump clients in 2017 include the Alliance for Fair Trade with India, the Alliance for Olive Oil Quality Standards, Amazon.com, American Airlines, Anheuser-Busch, and AT&T.
In his presidential campaign, Trump pledged to "drain the swamp," which was shorthand for reducing the influence of "special interests" in Washington. Lobbying is usually seen as a part of that, in conjunction with campaign fundraising.
In his first few weeks in office, Trump signed an executive order banning officials in his administration from lobbying for five years after leaving office. He also banned them from representing foreign entities. Watchdog organizations, though, say there's more the administration can do.
John Pudner, executive director of Take Back Our Republic, a conservative group advocating for campaign finance reform, says lobbying combined with campaign cash creates a system that hurts taxpayers.
"Stopping the revolving door is important, but also realizing that somebody is trading millions in lobbying and campaign contributions for billions in taxpayer money — that's a big problem for Americans," he said. For starters, he would like to see more public disclosure by lobbyists, campaign contributors and people bidding for government contracts.
He says there's a legitimate place for lobbying and representing the interests of businesses, but the incentives in the system lead to wasteful government spending.
"People on the left refer to it as ‘campaign finance reform,' and people on the right refer to it as ‘draining the swamp,'" he said. "They're talking about the same thing. Call it whatever you want, people want things cleaned up."
Tony Mecia is a senior writer at the Weekly Standard.