President Obama, in his State of the Union address, again pledged to “end the outsized influence of lobbyists,” but by dangling out new subsidies and targeted tax credits, the president showed once more why K Street will continue to grow in size and clout in the era of Change.
Obama’s speech was emblematic of his overall economic mind-set: Government should be the rudder that steers industry.
For instance, he called for more funding to build high-speed rail. Why rail? Rail is only one way to travel or to ship things.
A likely clue: lobbying. Lorenzo Simonelli, chief executive officer of GE Transportation, said in May, “We are ready to partner with the federal government and Amtrak to make high-speed rail a reality.”
Subsequently, GE Transportation hired two new lobbying firms. One new GE lobbyist on high-speed rail: Linda Hall Daschle, the wife of former Senate Majority Leader Tom Daschle, an Obama confidant.
Samuel Whitehorn is another new addition to GE’s train lobby. He served as senior counsel on the Senate commerce committee and a senior lawyer at Bill Clinton’s Department of Transportation.
Obama also asked Congress to “give rebates to Americans who make their homes more energy-efficient, which supports clean energy jobs.” Again, he’s picking winners and losers.
If Washington can afford to cut taxes, why should it be so targeted? Driving people toward buying windows and doors drags them away from buying cars, beds or a vacation. Some businesses win at the expense of others.
And even in the world of windows, political connections are becoming increasingly crucial. Consider California window maker Serious Materials. In May, the company hired its first lobbyists — from the same firm that represents GE on trains, with lobbyists including a former top Democratic staffer at the House science committee.
Obama and Vice President Biden both used public events specifically to tout Serious’ windows — a fact made even more awkward by the fact, first reported by Fox Business Network’s John Stossel, that Cathy Zoi, the White House official in charge of weatherization, is married to a Serious Materials executive.
Obama also called for “continued investment in advanced biofuels and clean coal technologies.” The market for biofuels like ethanol exists only because of industry lobbying.
Obama also called for “continued investment in advanced biofuels and clean coal technologies.” The market for biofuels like ethanol exists only because of industry lobbying.
Dwayne Andreas, the former CEO of ethanol giant Archer Daniels Midland, for example, was the godfather of Democrat Hubert Humphrey’s child, but when Richard Nixon defeated Humphrey, Andreas once delivered $100,000 in cash to the Nixon Oval Office.
And massive “clean coal” subsidies were the object of a breathtaking lobbying effort at the end of Bush’s administration and the beginning of Obama’s. A consortium of energy companies seeking billions for a clean-coal demonstration project in Mattoon, Ill., hired Mark Maddox, a former Bush Energy Department official, to lobby for their lucre.
In the end, this team got a $1 billion earmark for its clean-coal project, and now Obama wants more clean coal funding, even though the technology is thoroughly unproven.
Obama also pledged to “double our exports over the next 10 years” through a “National Export Initiative.” Some of this will be removing government barriers to export, but this initiative will also mean corporate welfare.
Don’t put too much stock in Obama’s claim that this will help “farmers and small businesses”: Our current export promotion agencies — like the Export-Import Bank and the Overseas Private Investment Corp. — spend almost all their money subsidizing the biggest companies, like Boeing, which pockets a majority of Ex-Im subsidy dollars most years.
There were other winners Wednesday night. Public sector unions, such as the Service Employees International Union, whose political action committee spent $31 million in 2008 to elect Obama, would benefit from Obama’s plan to grant special subsidies for student loans of those who “choose a career in public service.”
Morgan Stanley and Charles Schwab would profit — at small businesses’ expense — from a proposal to force all employers to automatically enroll workers in retirement accounts.
Obama and Congress get to pick the winners and losers. If you don’t have a good lobbyist, you can guess which side you’ll end up on.
Timothy P. Carney is The Washington Examiner’s lobbying editor. His K Street column appears Wednesdays.
