Undergirding his pledges to “remake America,” in specific areas — foreign policy, the economy, healthcare, banking and more — Barack Obama promised systemic change. He promised to fix the way Washington works.
He promised to unrig the game.
If President Obama were interested in honest self-criticism in his final State of the Union address, he would admit that he failed on this central promise. In fact, Obama totally abandoned the idea, if he ever believed in it at all.
“As people have looked away in disillusionment and frustration,” Obama said in announcing his presidential run in 2007, “we know what’s filled the void: the cynics, and the lobbyists, and the special interests who’ve turned our government into a game only they can afford to play.”
He was right. “They write the checks,” he continued, “and you get stuck with the bills, they get the access while you get to write a letter, they think they own this government, but we’re here today to take it back.”
Candidate Obama promised to “stop” the revolving door, through which industry hands regulate and subsidize their own industry, and regulators get rich from the companies they once oversaw.
On his first day in office, Obama issued an executive order that purported to do that. In his first State of the Union, Obama claimed he had succeeded. “We have excluded lobbyists from policymaking jobs.”
But this was a lie. By that point, dozens of lobbyists were in policymaking jobs, including a Raytheon lobbyist as deputy secretary of Defense, a Goldman Sachs lobbyist as Treasury chief of staff, a lobbyist for the Swiss Bankers’ Association as general counsel at the IRS and four lobbyists in his cabinet.
Since then it’s gotten worse, with the revolving door spinning both ways — Obama hiring lobbyists, and Obama appointees monetizing their policymaking experience. Obama’s Budget Chief, Peter Orzsag, left for Citibank, his general counsel, Greg Craig, left for Goldman Sachs and his deputy chief of staff, Mona Sutphen, left for Swiss bank UBS. Obama’s energy efficiency czar Cathy Zoi cashed out to a George Soros-run investment firm specializing in green energy.
Treasury Secretary Jack Lew worked at a K Street lobbying firm and at Citigroup.
Obama picked David Stevens to run the Federal Housing Authority (which subsidizes mortgage lenders), and then Stevens left for the Mortgage Bankers Association.
For Obama’s first term, the chief of staff at the Export-Import Bank of the United States — which mostly subsidizes Boeing — was Kevin Varney. Varney is now a VP at Boeing.
If government officials had set out to grease their own personal revolving door spins and enrich themselves in the private sector, they couldn’t have done better than Obama’s two signature laws: Obamacare and the Dodd-Frank financial regulation bill.
Both laws increased the government’s role in the economy, but not through “government takeovers,” as some conservatives railed. Obama’s laws increased subsidies, regulations, mandates and bailouts. Obamanomics has proven to be this: The government and Big Business increasingly become partners. The losers are small business, consumers and taxpayers. The winners are the Obama insiders. As candidate Obama would put it, “They write they checks, and you get stuck with the bills.
Dodd-Frank and Obamacare are also amazingly open-ended, with “The Secretary Shall” the most common phrase, and massive discretion left to regulators. This was, in effect if not in intention, an invitation to industry: Hire the folks who wrote or who are enforcing the bill, and get rich!
And they did. Look at Dodd-Frank. The top aides to Dodd and Frank went off to Wall Street and K Street. Dozens of Obama appointees to the new Consumer Financial Protection Bureau have cashed out, sometimes to firms formed solely to help financial firms navigate Dodd-Frank and the CFPB.
The Obamacare Revolving Door may have been even more active. To craft the law, Obama’s Department of Health and Human Services hired former Humana lobbyist Liz Fowler, who then cashed out to become top lobbyist at Johnson and Johnson. While HHS defended the contraception mandate in court, the agency’s general counsel has been William Schulz, formerly a lobbyist for Barr Pharmaceuticals, maker of the morning-after contraceptive and heavily subsidized by the mandate.
The best Obamacare revolving-door move, however, may have been the trade executed between the insurance industry and the Centers for Medicare and Medicaid Services.
Obama appointee Marilyn Tavenner, after implementing much of Obamacare’s subsidies and rules for insurers, left CMS to become the top lobbyist at the insurers’ biggest group, America’s Health Insurance Plans. Obama replaced Tavenner with Andy Slavitt, former executive at United Health, the nation’s largest health insurer.
Those two, in recent weeks, have fought side-by-side to expand Obamacare’s bailout of insurers.
In all, Obama has hired more than 100 lobbyists, and a similar number of Obama hires have cashed out to become lobbyists or quasi-lobbyists.
Space constraints prevent a full treatment of the Obama revolving door, but President Obama put it concisely, back in his 2007 announcement speech: “Too many times, after the election is over, and the confetti is swept away, all those promises fade from memory, and the lobbyists and the special interests move in …”
Well put, Mr. President.
Timothy P. Carney, The Washington Examiner’s senior political columnist, can be contacted at [email protected]. His column appears Tuesday and Thursday nights on washingtonexaminer.com.
