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Real Fourth Estate Located On K Street

Investor's Business Daily
April 3, 2006
By Ernest S. Christian and Gary Robbins

Ford and GM are not the only overly large, high-cost enterprises in need of a real turnaround expert. So is the federal government.

The difference is that the big automakers know that they must change or disappear. The federal government, on the other hand, continues to peddle outmoded products, sees no need for efficiency, and often seems less influenced by the voters than by Washington lobbyists who profit from making it bigger and more profligate.

The era of big government began about 1920, when it had a budget of only $6.4 billion. It expanded swiftly over the next 50 years into nearly all areas of human life and endeavor, ultimately becoming the $2.6 trillion behemoth it is today.

Until about 1970, government grew because it was a needed and effective instrument. Yes, government was expensive, very often overreached and did some silly and downright harmful things. But despite these failings, most Americans thought that government made them better off.

Remember: The America that spawned big government was far different from the educated, affluent and generally more civilized society that we are today.

Back then, it was afflicted by rapacious business practices, exploitative labor conditions, rigid class and racial distinctions, poor public health, low levels of literacy and other similar ills that have largely been cured - with and without federal intervention.

The tasks that remain require fewer government employees, a smaller budget and fewer stringent laws. Most things can best be accomplished privately. Yet no organ of government ever shrinks, no activity ever ceases and no laws, no matter how unnecessary or harmful, are ever repealed.

Instead of declaring "mission accomplished," the federal government has since 1970 continued to grow at a rapid rate, propelled along primarily by its own momentum and the career interests of the lobbyists, lawyers, politicians and bureaucrats who benefit.

The more new laws and federal regulations, the bigger and more profitable the ubiquitous Washington law firms become. The more money the government spends, the more money the lobbyists make, and the more spoils and earmarks there are to assure the re-election of big-spending incumbents who, once re-elected, start the cycle all over again.

In 1970, there were only a few law firms with offices in Washington that had as many as 150 lawyers, whereas today there are dozens in the 500- to 1,000-lawyer range. As the number of lawyers increased, so did the number of laws and regulations. Since 1970, both the U.S. Code and the Code of Federal Regulations (CFR) have tripled in size.

In constant dollars, federal spending more than tripled over the same period that K Street was becoming the home base of the lobbying empire that today dominates Washington. Journalists claim that they are the Fourth Estate, and perhaps they once were. But today that position is occupied by the 200,000 or so lobbyists, lawyers, accountants and economists who are engaged in what is euphemistically called "legislative and policy work."

Occasionally, the people back home decide to send someone to Washington to petition the government on their behalf - and that is good. But hardly any of today's Washington operatives fit this idealized picture. These guys are skilled entrepreneurs who are in the business of aiding, abetting and often instigating government action - and getting themselves hired by the presumed beneficiaries or victims.

The more things the government does and the more the government spends, the richer and more powerful they become.

AARP is a good example of an expertly staffed, highly successful megalobbyist. Having first captured the 50-plus crowd as its "constituency," AARP has over the years helped boost federal spending to the point that older Americans are now the most highly paid recipients of federal money.

AARP itself has become an enormous organization. It annually spends more than $50 million on lobbying, influences huge amounts of money in campaign contributions - and on the side sells travel, financial and insurance products. With annual revenue of nearly $900 million, AARP is on its own a powerful force, independent of the voters for whom it has undertaken to speak.

A small, low-budget, efficient federal government would be a great boon to most Americans - but would be a disaster for Washington's law and lobbying firms. Unlike Ford and GM, where all the stakeholders have every incentive to achieve a turnaround, there will be powerful dissenters in the case of the federal government.

The feds can be fixed only if enough members of Congress reassert control on behalf of the American people.

Christian and Robbins are regular contributors who write about policy and politics from Washington, D.C.