Without any doubt, lobbying is big business in our Nation’s Capitol. Over the years, powerful corporate lobbyists have had a tremendous influence – sometimes more than elected officials – on what happens in Washington. Lobbying has paid off for the lobbyists and the special interests. For example, big companies that spent hundreds of millions lobbying successfully for a tax break enacted in 2004 got a whopping 22,000-percent return on that investment! That’s pretty good proof that for those who can afford it, hiring a lobbyist can pay tremendous dividends. The figures, compiled by professors at the University of Kansas for a study released last month, offer a rarely-seen glimpse of how the lobbying business works, and why the industry is booming as never before.
President Barack Obama has promised to curb lobbyists’ influence and I hope that he can convince Congress to go along with him. The professors’ report details efforts by hundreds of companies in 2003 and 2004 to push through a one-time tax “holiday” that lowered for a year the tax rate they paid on profits earned abroad. All told, U.S. companies saved about $100 billion in taxes, with pharmaceutical powerhouses Pfizer and Merck & Co., technology giants IBM and Hewlett Packard, and health products maker Johnson & Johnson among its top beneficiaries. The study focuses on 93 firms that spent as much as $282.7 million lobbying on the issue during that period. Those companies ultimately saved a total of $62.5 billion through the tax change.
Researchers used publicly-available lobbying disclosures filed with Congress and financial statements submitted to the Securities and Exchange Commission to compare the amount each company saved with its lobbying expenditures. Stephen Mazza, who conducted the study along with Raquel Alexander and Susan Scholz, observed:
It calls into question what Congress did in 2004. It clearly is a very lucrative field for lobbyists. Congress wanted to create jobs, and what they probably did was create jobs for the lobbyists.
The results reflect one reason that lobbying – always a major industry in our Nation’s Capitol – has experienced explosive growth in recent years. Companies and interest groups spent $3.42 billion lobbying Congress and the federal government in 2008, the last year for which such figures are available, according to the Center for Responsive Politics. That’s a 14% jump from the previous year. There’s growing evidence that companies get what they pay for — and maybe a lot more – from their lobbying efforts.
The Center for Responsive Politics is a nonpartisan group that tracks money in politics. It recently released a study comparing the amount spent by bailed-out banks on political contributions and lobbying with the amount of money they got from the Troubled Asset Relief Program, better known as the Wall Street rescue fund. The results revealed that the banks received an overall 258,449% for the $114 million they spent on campaign donations and lobbying. That’s not a bad return – even in good economic times – and it’s certainly a great return in bad times. This sort of thing should shock most U.S. taxpayers and should get the attention of the politicians.
Source: Associated Press
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