Trillion‐​Dollar Spending Bills Bring Out the Lobbyists

The Center for Responsive Politics reports that lobbying spending has jumped to near‐​record levels in the first quarter of 2020 “as powerful companies, trade groups and other clients rushed to influence the government’s response to COVID-19, particularly its $2.2 trillion stimulus bill.” Federal lobbying spending totaled $903 million in the first quarter, the most since the legislatively active first two years of the Obama administration — which had exceeded the last few months of 2008, when TARP was on the table.

OpenSecrets found that at least 3,200 clients reported lobbying on issues related to coronavirus and the stimulus bill. More than 1,500 lobbying clients specifically reported attempting to influence the House version of the CARES Act. Among all non‐​appropriations bills introduced since 2005, only the 2009 stimulus package drew more lobbying clients.

This is no surprise, of course. When you lay out a picnic, you get ants. When you lay out taxpayers’ dollars, you get lobbyists. And the CARES Act is the biggest picnic in a decade. (I’m not addressing here whether the money being spent on Covid‐​19 response is necessary or justified, just the fact that big spending bills lead to big lobbying.)

Journalists have noticed. A few headlines from the past few weeks: “Coronavirus fuels K Street lobbying gush, new disclosures show” (Politico). “How Lobbyists Robbed Small Business Relief Loans” (New York Times). “Investment firms spent millions lobbying Trump administration and Congress on coronavirus relief bill” (CNBC). “Lobbyists Pile On to Get Wins for Clients Into Coronavirus Stimulus Package” (Wall Street Journal)

Everybody wanted a piece of the $2.2 trillions. (Well, except the Cato Institute.) Airlines, pharmaceutical companies, utilities and shrimp processors. Apple, CVS and Toyota. The Metropolitan Opera and casino operators. Medical device makers. It always helps to have political connections.

What can we expect? With a federal budget headed toward $5 trillion even before the extraordinary spending now being contemplated, many companies and interest groups see a profit opportunity. It’s worth hiring platoons of lobbyists to get just a small, an infinitesimal, sliver of that pie.

People invest money to make money. In a free economy they invest in building homes and factories, inventing new products, finding oil, and other economic activities. That kind of investment benefits us all — it’s a positive‐​sum game, as economists say. People get rich by producing what other people want.

But you can also invest in Washington. You can organize an interest group, or hire a lobbyist, and try to get some taxpayers’ money routed to you. That’s what big business, small business, the farm lobbies, AARP, industry associations, and teachers unions do. And that kind of investment is zero‐​sum — money is taken from some people and given to others, but no new wealth is created.

If you want to drill an oil well, you hire petroleum engineers. If you want to drill for money in Washington, you hire a lobbyist. And more people have been doing that.

The trillions of dollars being spent on Covid‐​19 response may well be necessary and appropriate. And maybe all this lobbying activity is just the price we pay for government help. But we should understand how much deadweight loss goes along with government spending, especially spending that’s being rushed through Congress without any serious deliberation. And we should at least insist on serious oversight of the spending, which is not yet happening.