Over the last 15 months, Congress had only one major legislative accomplishment: a tax bill that delivered most of its benefits to corporations and wealthy individuals. Now, Congress is on the verge of a second achievement: de-regulating multi-billion-dollar banks.
Americans of all political stripes ought to be wondering why, at a time when there are so many other public concerns, Congress is almost exclusively interested in the priorities of the extremely well-to-do. Guns, healthcare, immigration and other issues have been at the forefront of the public debate. Bank de-regulation… not so much.
One answer is that, with an election on the horizon, members of Congress may be taking stock of their campaign accounts and looking to the wealthy and corporate donors that fill them. The tax bill was a bonanza for big donors, so much so that lawmakers candidly admitted to the media that their donors were saying things like “Get it done or don’t ever call me again.” The banking industry, which contributed almost $44 million to members of Congress in the 2016 election cycle, was “among the biggest winners” from the tax cuts.
One of the primary purposes of corporate campaign spending is to get legislators to place corporate interests at the top of the agenda. Political scientist Alexander Fouirnaies recently examined corporate giving to state legislators across the country, and found that corporate PACs targeted agenda-setters — legislators in positions of party leadership or in charge of key committees. Legislators experienced a surge in corporate contributions upon obtaining one of those positions.
It is no surprise, therefore, that Sen. Mike Crapo (R-Idaho), the chairman of the Senate Banking Committee and principal sponsor of the bank de-regulation bill — often called the “Crapo bill” — counts the securities and investment industry, the insurance industry, and commercial banks as his three top sources of contributions. Collectively, they’ve given him more than $2.7 million since 2013, over a third of all the money he raised. Crapo has been among the top 10 recipients of banking industry contributions since becoming chairman of the committee in 2017.
Commercial banks and other for-profit industries also spend heavily on lobbying, outspending other sectors by a ratio of 34-to-1. In 2017 alone, commercial banks spent almost $67 million on registered lobbyists — or about 70 percent of the total salaries of every member of Congress. Lobbyists sometimes persuade legislators to see the issues their way — no doubt, their fundraising prowess provides them a receptive audience. And they also in effect “subsidize” legislation, providing the information and manpower to advance complicated bills.
To be sure, there are other factors at work here as well. Democrats supporting the bill may be trying to burnish their bipartisan credentials, and they may also have some genuine concerns about credit unions and community banks.
But if this was just about bipartisan deal-making, or community banks, we would be seeing a very different bill. The current version of the legislation deregulates 25 of the largest 38 banks in the United States, at a time when bank profits and lending are at all-time highs. Of the banks benefiting from the bill, 18 have a stadium named after them. Meanwhile, critics of the bill, of which there are many, contend that it makes the U.S. economy vulnerable to a repeat of the 2008 financial crisis. Even the nonpartisan Congressional Budget Office says the bill would make it more likely that the government will have to bail out failing banks.
Of course, the issue of the day should not be what Congress can do for banks — it should be how members of Congress can better represent all the people they serve.
Privately, members of Congress are tired of fundraising and unhappy with the way that money drives outcomes in Washington — as retired members of Congress are happy to attest. It’s time for current members to do something about it.
One good start would be to ban campaign fundraising by lobbyists. Candidates take a lot of money from corporate PACs and special interests, albeit in legally limited amounts. Meanwhile, lobbyists — the agents of corporate political interests — can hold fundraisers where they collect huge sums of money in a single event. Those fundraisers help enable corporate interests to accumulate the six- and seven-figure totals described above.
But it’s not enough to simply limit money coming from lobbyists and other interests. We also need to provide candidates with an alternate way to finance their campaigns that makes them accountable to every American. Locally, Washington is one of the cities leading the way on this, with a recently enacted policy that will match contributions from small donors to candidates for city council and other public offices. Programs like these encourage candidates to spend more time in voters’ living rooms and less time in corporate boardrooms. Congress should enact a similar policy for federal elections.
A recent article described the problem with Congress differently, as one of a “short attention span.” Sen. Jeff Flake (R-Ariz.) agreed that attention spans were short, and said that issues like immigration had “no real deadline,” and gun control was not doable “unless you’re forced.” But Sen. Sherrod Brown (D-Ohio) may have said it best: “Congress has a very adequate attention span when it comes to helping special interests. It’s things that the public wants… where the attention span is short.”
That can change. But only if members of Congress are willing to devote some attention to reforming the rules of our politics.
Alex Tausanovitch is the associate director of Democracy and Government Reform at American Progress.
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