The Chamber fights Obama's regulatory robbery
By: Timothy P. Carney
Examiner Columnist
October 21, 2009
Barack Obama's White House has declared war on the largest lobbying organization in the country, the U.S. Chamber of Commerce. It figures to be a tough fight.
Obama has had a good deal of success winning the support of individual companies by pushing regulations that would cement their market share and increase their profits.
But the chamber represents a wide variety of businesses spread across the economic spectrum. As a group, they would suffer along with the whole economy under the weight of Obama's restrictions, mandates, and taxes.
The White House and liberal groups have leaned on the chamber's members in retaliation for the lobby's opposition to current health care overhaul bills and climate-change legislation. The chamber has responded by ramping up its lobbying efforts to record levels. It spent $34.6 million in the third quarter of 2009, according to reports released Monday -- four times what it spent in the second quarter and the largest quarterly lobbying expenditure by any entity since reporting began a decade ago.
Chamber lobbyist Bruce Josten told me that White House is picking a high-profile fight with his group because, given Democratic supermajorities, Obama "needs an enemy" to blame for the difficulty he's having in getting his policies approved.
But there's another reason Obama is running low on enemies: He's already bought off many of the most powerful industries and businesses.
Look at health care, where Obama has brought the name-brand drug makers on board to his reform with promises of subsidies and pledges not to attack the industry's special favors. Look at cigarettes, where Obama signed a tobacco regulation bill with the firm backing of Philip Morris.
And of course, look at climate-change legislation, where Obama has on his side coal giants like American Electric Power, manufacturing giants like Nike, agribusiness giant Monsanto, and lobbying giant General Electric, to name a few. The Democrats have bought off these special interests by rigging the legislation so that taxpayer and ratepayer money is funneled into corporate coffers.
So why hasn't Obama won over the Chamber of Commerce on his regulatory pushes?
The problem is that the chamber is so varied. Its members are manufacturers, service businesses, high-tech companies, finance companies and everything in between, ranging in size from Exxon to Mom & Pop, and in geography from Anchorage to Miami.
To buy off the chamber as he has bought off the electric utilities, Obama would have to buy off everybody, which is impossible in the realm of regulation. Regulatory robbery, by its nature, benefits a small group -- often a single business or industry -- at the expense of the rest of the economy.
When advocates of climate-change legislation argue that policies like cap and trade can be profitable, they are partly right: Well-positioned businesses can make a profit from the right sort of regulations. For instance, those companies protesting the chamber's anti-cap-and-trade stance also will profit -- or at least avoid new costs -- while burnishing their image as enlightened progressives. Apple withdrew from the chamber over cap and trade, while Nike gave up its seat on the chamber's board. But neither company manufactures anything in the United States, and so a cap-and-trade scheme will impose no new costs, while Nike's competitor New Balance -- which actually makes shoes here -- would suffer.
This regulatory robbery drains wealth from the economy as a whole by boosting costs and directing money to inefficient activities like carbon capture. Obama can't enrich everyone with his regulations in health care and climate, but he can enrich a select few. When companies band together -- as in the chamber -- and consider the common business interest, they won't back most regulations. Only when companies are free to pursue their narrow interests can Obama win allies to his regulatory agenda.
When it comes to spending, however, the chamber often favors increases, for the simple reason that they benefit its members. This is why the chamber got behind bailouts and the stimulus .
As a result, the chamber might find itself short on allies in its fight against the White House. Free-market politicians and activists may not feel the need to stick up for the chamber, which has proved itself more pro-business than pro-free market.
Timothy P. Carney, The Examiner's lobbying editor, can be reached at tcarney@washingtonexaminer.com. He writes an op-ed column that appears on Friday.
