WASHINGTON -- As sequestration cuts grew more likely during the first two months of 2013, one industry found profit in budget belt-tightening. Organizations seeking to influence the legislative process spent heavily on lobbyists between the beginning of January and the end of March this year, motivated in part by the possibility that Congress was about to cut off needed spending.
A review of federal lobbying records shows that 577 companies, unions and politically active groups filed to lobby on sequestration during the first quarter of 2013. That was 12 more than registered to lobby on the issue in the final quarter of 2012. The collective cost of that first-quarter lobbying was $134.5 million -- although because those 577 entities listed other legislative items on their lobbying forms, it is impossible to know how much of that total was devoted to the sequester.
Some entities were successful.
Fourteen groups and companies tied to the farming industry, for example, filed to lobby on sequestration during the first quarter of 2013, for a total expense of more than $1.7 million. That list included Perdue Farms, Hormel Foods, Christensen Farms and farming bureaus in several states. They were able to secure a measure to exempt the Agriculture Department's meat inspectors from furloughs.
Twenty-one companies and unions tied to the airline industry filed to lobby on sequestration in the first three months of this year, at a price of more than $7.2 million. The list included JetBlue, American Airlines, the Aircraft Owners and Pilots Association, Airlines for America, and the AFL-CIO, which represents Federal Aviation Administration workers. They were able to reverse furloughs for air traffic controllers during the second quarter of 2013. (Again, it's unclear how much of that money from the farming and airline industries went specifically for lobbying on sequestration and how much was spent on other legislative items.)
For many other sectors, the lobbying expenditure was mainly money flushed down the drain.
In total, 68 counties, cities and city departments filed to lobby on sequestration during the first quarter of 2013, at a cost of more than $1.48 million. The list included St. Louis, Las Vegas and Boise, Idaho; the counties of Miami-Dade, Sonoma in California and Polk in Iowa; and two cities in Texas -- McKinney and New Braunfels -- that were worried about the FAA's contract tower program.
On March 1, 2013, with Congress unable to agree on a budgetary replacement, sequestration went into effect, forcing $85 billion in cuts to federal spending by the end of the fiscal year. The money spent by those towns and counties to mitigate the sequester had done little more than pay the rent and salaries at various D.C. lobbying shops.
In interviews with The Huffington Post, officials at a half-dozen entities that lobbied on sequestration mitigation described the process as a lengthy series of frustrations. Lawmakers would privately express sympathy for their projects, only to say that their public posture had to be in support of budget cuts. Others on Capitol Hill recognized the severe impact of the cuts but overestimated Congress' willingness to address the matter.
"When we talked to folks on the Hill, what we really encountered was the disbelief that it would ever happen. 'Why are you even talking to us about this?' In July of 2012, we had a lobby day. We went to the Hill with a sequester fact sheet, and honestly it was like people were rolling their eyes. They were like, 'This is just not going to happen,'" said Sue Nelson, vice president of federal advocacy at the American Heart Association and a onetime aide to former Senate Budget Committee Chairman Kent Conrad (D-N.D.). "My concern was that I just knew from my time on the budget that it was going to be hard for this not to happen this time."
Groups like the heart association eventually formed an alliance, the Non-Defense Discretionary Coalition, to harness more lobbying power on Capitol Hill. They pursued a complete replacement of the sequester cuts rather than individual exemptions. One top official with the coalition said he was impressed that no one jumped ship until sequestration hit. But it was still "defensive lobbying" (as Nelson termed it) and insufficient to push Congress to act.
Research institutions were doing defensive lobbying of their own. When sequestration went into effect, the National Institutes of Health had estimated that it would be forced to cut grants by 10 percent, while the National Science Foundation said it would have to reduce the number of new grants by 1,000.
"I think for the most part everyone understood that, absent a larger budget agreement, it was going to be difficult to have a piecemeal approach to the sequester," said Michael Ledford, vice president for client management at the lobbying firm Lewis-Burke Associates, which represents a variety of scientific research organizations and universities. "A lot of political offices wanted to ensure that there wasn't an interruption in that support. But there was too much difficulty figuring out how to extract individual items or exemptions from this bill."
A review of lobbying records reveals that 77 colleges, universities and post-grad schools registered to lobby on sequester-related matters during the first quarter of 2013, with a total expense of $5.3 million (again, not necessarily all on sequester-related matters). The University of Arizona warned lawmakers of a potential $15 million impact that sequestration would have on the school. The University of Kentucky argued that the cuts would hurt basic research and development. Princeton aired concerns about the impact on fusion energy. The University of Pittsburgh warned of harm to biomedical research, while the University of Colorado highlighted the effect sequestration would have on its dental school as well as downtown Denver.
"We certainly lobbied our delegation. We wanted them to understand the impacts these will have in our university and state," said Steve Warren, vice chancellor for research and graduate studies at the University of Kansas. "I can't say it's been encouraging in any way, shape or form. It is something you feel like you have to do so they know what's going to happen."
"The whole idea of sequestration is demoralizing," Warren added. "I don't know if it was especially demoralizing to talk to our delegation. They understood this wasn't going to be good for us at all and that it was, in some respects, going to hurt their states ... On the other hand, they weren't holding out any particular hope that this bill was going to change."
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The U.S. incarcerates its citizens at a rate roughly <a href="http://www.parade.com/news/2009/03/why-we-must-fix-our-prisons.html" target="_hplink">five times higher than the global average</a>. We have about 5 percent of the world's population, but 25 percent of its prisoners, according to The Economist,. This status quo costs our local, state and federal governments a combined $68 billion a year -- all of which becomes a federal problem during recessions, when states look to Washington for fiscal relief. Over the standard 10-year budget window used in Congress, that's a $680 billion hit to the deficit. Solving longstanding prison problems -- releasing elderly convicts unlikely to commit crimes, offering treatment or counseling as an alternative to prison for non-violent offenders, slightly shortening the sentences of well-behaved inmates, and substituting probation for more jail-time -- would do wonders for government spending.
End Of The Drug War
The federal government spends more than <a href="http://www.cbsnews.com/8301-18563_162-20072096.html" target="_hplink">$15 billion a year</a> investigating and prosecuting the War on Drugs. That's $150 billion in Washington budget-speak, and it doesn't include the far higher costs of incarcerating millions of people for doing drugs. This money isn't getting the government the results it wants. As drug war budgets balloon, drug use escalates. Ending the Drug War offers the government two separate budget boons. In addition to saving all the money spending investigating, prosecuting and incarcerating drug offenders, Uncle Sam could actually regulate and tax drugs like marijuana, generating new revenue. Studies by pot legalization advocates indicate that fully legalizing weed in California would yield <a href="http://canorml.org/background/CA_legalization2.html" target="_hplink">up to $18 billion annually</a> for that state's government alone. For the feds, the benefits are even sweeter.
Let Medicare Negotiate With Big Pharma
The U.S. has <a href="http://www.reuters.com/article/2009/06/01/us-healthcare-costs-sb-idUSTRE5504Z320090601" target="_hplink">higher health care costs than any other country</a>. We spend over 15 percent of our total economic output each year on health care -- roughly 50 percent more than Canada, and double what the U.K. spends. Why? The American private health care system is inefficient, and the intellectual property rules involving medication in the U.S. can make prescription drugs much more expensive than in other countries. Medicare currently spends about $50 billion a year on prescription drugs. According to economist Dean Baker, <a href="http://www.cepr.net/documents/publications/intellectual_property_2004_09.pdf" target="_hplink">Americans spend roughly 10 times more than they need to</a> on prescription drugs as a result of our unique intellectual property standards. These savings for the government, of course, would come from the pockets of major pharmaceutical companies, currently among the most profitable corporations the world has ever known. They also exercise tremendous clout inside the Beltway. President Barack Obama even <a href="http://www.huffingtonpost.com/2012/09/02/barack-obama-politics_n_1847947.html" target="_hplink">guaranteed drug companies more restrictive -- and lucrative -- intellectual property standards</a> in order to garner their support for the Affordable Care Act.
Offshore Tax Havens
The U.S. Treasury Department estimates that it loses about <a href="http://www.ctj.org/pdf/stopact.pdf" target="_hplink">$100 billion a year</a> in revenue due to offshore tax haven abuses. Sen. Carl Levin (D-Mich.) has been pushing legislation for years to rein in this absurd tax maneuvering, but corporate lobbying on Capitol Hill has prevented the bill from becoming law.
Deprivatize Government Contract Work
In recent years, the federal government has privatized an enormous portion of public projects to government contractors. Over the past decade, the federal government's staffing has held steady, while the number of federal contractors has <a href="http://pogoarchives.org/m/co/igf/bad-business-report-only-2011.pdf" target="_hplink">increased by millions</a>. This outsourcing has resulted in much higher costs for the government than would be incurred by simply doing the work in-house. On average, contractors are paid <a href="http://pogoarchives.org/m/co/igf/bad-business-report-only-2011.pdf" target="_hplink">nearly double</a> what a comparable federal employee would receive for the same job, according to the Project On Government Oversight.
Print More Money
There's an old saying in economics: You have to print money to make money. <a href="http://www.huffingtonpost.com/2012/10/09/underwear-sales-growth-economy_n_1952214.html" target="_hplink">Okay, there's no such saying</a>. Nevertheless, the great boogeyman of many conservative economic doctrines -- inflation -- isn't such a bad idea during periods where much of the citizenry is drowning in debt. Inflation is by no means a perfect remedy: it's a stealth cut to workers' wages. But it also has many benefits that are often unacknowledged by the Washington intelligentsia. Inflation makes housing debt, student loan debt and any other private-sector debt more manageable. Today, when <a href="http://www.corelogic.com/about-us/researchtrends/asset_upload_file448_16434.pdf" target="_hplink">10.8 million</a> homes are underwater -- meaning borrowers owe banks than their houses are worth, moderate inflation could ease that debt burden. By effectively reducing monthly bills, moderate inflation could actually put more money in the pockets of these homeowners to spend elsewhere, thus stimulating the economy. Moderate inflation -- 5 percent or so -- could also help alleviate the <a href="http://www.cbsnews.com/8301-505145_162-57555780/student-loan-debt-nears-$1-trillion-is-it-the-new-subprime/" target="_hplink">$1 trillion</a> in student debt currently plaguing America's graduates. Make no mistake -- hyperinflation of 20 percent, 30 percent or more -- is bad. But the U.S. has ways to crush inflation when it gets out of hand, as proven by the Federal Reserve under then-Chairman Paul Volcker in the early-1980s.
Print Less Money
The government prints a <em>lot</em> of $1 bills. But it turns out that minting $1 coins is much, much cheaper. Over the course of 30 years, the government could save $4.4 billion by switching from dollar bills to dollar coins. Here's looking at you, <a href="http://www.usmint.gov/mint_programs/nativeamerican/" target="_hplink">Sacagawea</a>.
Immigration: Less Detention, More Ankle Bracelets
The government spends <a href="http://newamericamedia.org/2012/04/ice-slow-to-embrace-alternatives-to-immigrant-detention.php" target="_hplink"> $122 per person, per day</a> detaining immigrants who are considered safe and unlikely to commit crimes. The government has plenty of other options available to monitor such people, at a cost of as little as $15 per person. For the first 205 years of America's existence, there was no federal system for detaining immigrants. The process began in 1981.
Financial Speculation Tax
Wall Street loves to gamble. In good times, financial speculation is the source of tremendous profits in America's banking system, but when the bets go bad, the government picks up the tab, as evidenced by the epic bank bailouts of 2008 and 2009. Unfortunately, this speculation is difficult to define in legalistic terminology and even more difficult to police. One solution? By taxing every financial trade at the ultra-low rate of 0.25 percent, the U.S. government can impose a modest incentive against gambling for the sheer sake of gambling. If there's an immediate cost to placing a bet, a lot of traders will choose not to bet. What's more, this tax could raise about <a href="http://www.ips-dc.org/media/why_a_financial_transaction_tax" target="_hplink">$150 billion a year</a> for the federal government.
Taxing greenhouse gases would generate $80 billion a year right now, and up to $310 billion a year by 2050, <a href="http://www.brookings.edu/research/papers/2012/07/carbon-tax-mckibbin-morris-wilcoxen" target="_hplink">according to an analysis by the Brookings Institution</a>. It would also help avert catastrophic ecological and economic damage from climate change.