Tag Archives: congress

Mr. Walton Goes to Washington

When retail workers want something, they ask their employers, get denied, get bullied and sometimes fired. Sometimes, they take to the streets, as they have for the last three years on Black Friday. By contrast, when retailers want something, they scurry to the halls of Congress, where they purchase influence with their exorbitant profits.

The largest big-box retailers have spent a total of $111 million since the 2000 election cycle on lobbying and campaign contributions. During the 2014 election cycle, big-box retailers spent $30 million on federal campaign contributions and lobbying, which is almost six times what they spent in 2000 (after an inflation adjustment).

Wal-Mart in particular is known for its status as a corporate-welfare queen; one studyestimates that one 300-person Supercenter costs taxpayers $904,542 to $1,744,590. Another estimates that Wal-Mart and the Walton family pull in $7.8 billion a year in tax breaks and subsidies. Meanwhile, a brand-new report from Americans for Tax Fairness finds that Wal-Mart also avoids taxes on more than $21 billion in offshore profits. In its most recent annual report, Wal-Mart openly admits that changes to government food stamp programs may hurt its financial performance. Hundreds of thousands of Wal-Mart workers make near-poverty wages.

Wal-Mart certainly benefits from other favorable government actions. Changes to labor laws allow it to abuse worker schedules, although sometimes it ignores them completely and just refuses to pay workers, flat out. Since Wal-Mart is a serial polluter, lax environmental standards are beneficial. It’s also very concerned about taxes, trade and intellectual property. To advance these interests, Wal-Mart spent $2.4 million on campaign donations and $12.5 million in lobbying in 2014 alone.

As the data below show, the last four election cycles have seen an explosion of big-box money in politics.

Of all spenders, Wal-Mart was by far the largest, followed by Home Depot. Both companies are considered “heavy hitters” by the Center for Responsive Politics, meaning they are among the top 100 political donors over the period for which data is available.

Even still, these numbers vastly understate political spending. For one, there is not yet a comprehensive database on state and local political spending. Further, many of these retailers are members of 501(c)6 groups like the American Legislative Exchange Council (ALEC) and the Chamber of Commerce; money paid to these groups is not reported. Also unreported are donations to 501(c)3 groups. As Demos has noted before, there is a clear need for stronger disclosure requirements, so that the full political influence of companies can be made available to the public. What we do know tells us that Republicans live up to their reputation as the “party of big business” and pull in more than $2 from retail for every $1 that goes to Democrats. With the exception of Costco, every big-box retailer heavily favors Republicans.

Numerous studies find that this money buys influence. Retailers lobby on a variety of issues, including tax policy, labor issues and the terms of international trade. A vast literature shows that these efforts produce returns, often at the expense of other democratic interests. In a comprehensive study of such conflicts, researchers found that business interests prevailed in 9 out of 11 issues in which businesses and labor were opposed. In the 16 cases that pitted business groups against citizen group coalitions, businesses won nine.

Taxes were the most frequently lobbied issue by large retailers in 2014, and by a wide margin. This legislative area has proven lucrative for business in the past; a 1 percent increase in businesses lobbying expenditures yields a lower effective tax rate of between 0.5 and 1.6 percent for the firm that lobbies. One study on the subject finds that the market value of an additional dollar spent on lobbying could be as high as $200. In 2014, the largest big-box retailers reported lobbying on a total of 37 incidences of specific taxation issues, including corporate tax reform, Internet sales tax and the extension of temporary tax breaks. The next most common issues of lobbying were health care reform, labor, antitrust and workplace regulations. As one example of the power of lobbying, the research firm Strategas maintains an index of the 50 firms that lobbying most intensely. The index has outperformed the S&P 500 every year since 1998.

Campaign contributions also produce benefits. There is strong evidence that the most important impact of campaign contributions is to increase access to politicians with theintent of setting the political agenda. A study of the telecommunications industry finds that regulators respond to private political spending with regulations that favor the donors. Companies that bid for federal contracts across industries are more likely to be granted those contracts if the bids are complemented by campaign contributions.

What can be done to stop the spread of big money in politics? Over the long run it will be necessary to overturn laws like Citizens United that opened the floodgates of money into Congress. But there are also short-term solutions. The Supreme Court explicitly endorsed disclosure as the alternative to campaign contributions. On the heels of Citizens United, Congress came within one vote of overcoming a party-line filibuster to pass the DISCLOSE Act. In the absence of Congress, shareholders should demand that corporations either get out of politics, or disclose their donations to organizations like ALEC that they might not approve of. The SEC should require this disclosure if Congress won’t.

Publicly financed elections can help candidates not in the pockets of big money get into office, and more states should consider the system. To slow the rise of lobbying, states and the federal government should regulate it more strictly. Patrick Flavin finds that states with stricter regulations on lobbying are more politically equal — that is, responsive to voters of all income groups. Politicians need to tell Congress that even on Black Friday, government isn’t up for sale.

This article originally appeared on Salon

Congress Is Rich: Here’s Why It Matters

Congress is rich. The average net worth in Congress is a bit more than $6 million, while the median net worth is $1 million. To put that in context, $4 million in net worth is enough to put someone in the top 1 percent, and $660,000 is enough to put an individual in the top 10 percent. Meanwhile, the median family wealth for whites is $134,000 and for blacks is $11,000. Emerging political science research suggests that the implications of this class bias are profound and important.

Political scientists have long debated the importance of “descriptive representation” or “reflective democracy.” Reflective democracy means that representatives share salient characteristics with their constituents. Most political scientists now agree that reflective representation leads to better substantive representation: that the interests of constituents are being reflected by legislator choice.

It’s increasingly clear that descriptive representation matters, particularly as related to race and gender. Political Scientists Robert R. Preuhs and Eric Gonzalez Juenke findthat black and Hispanic legislators are more responsive to the interests of black and Hispanic constituents than white legislators, after controlling for party. Legislators of color also serve an important veto function — preventing laws from passing that would disproportionately harm communities of color. Daniel Butler and David Broockman findthat politicians are more responsive to letters from constituents of the same race. This is confirmed by a study that finds legislators that support voter ID laws are less likely to respond to inquiries from Latino constituents. Further, black legislators are also more likely to hire black staffers. In addition, Economist Ebonya Washington finds that having a daughter makes a congressperson more liberal, particularly on reproductive rights. Some studies suggest that female representatives are more likely to set an agenda around women’s issues.

Given this, should we worry that more than half of all members of the House of Representatives are millionaires? Further, while two-thirds of the population don’t have a college degree, only two House members (Robert Brady of Pennsylvania and Stephen Fincher of Tennessee) and one senator (outgoing Mark Begich of Alaska) lack one.

Nicholas Carnes of Duke University has recently taken up the question of how class affects votes. In a 2012 paper, he finds that “representative from working-class occupations exhibit more liberal economic preferences than other legislators, especially those from profit-oriented professions.” Other research has confirmed this. Christopher Witko and Sally Friedman find that “House members with business backgrounds have closer relationships with business interests… and demonstrate more probusiness roll call voting.”

While descriptive representation of women and people of color has increased dramatically, the descriptive representation of working-class people has remained stubbornly flat (see chart).

As Carnes writes,

If millionaires were a political party, that party would make up roughly 3 percent of American families, but it would have a super-majority in the Senate, a majority in the House, a majority on the Supreme Court and a man in the White House. If working-class Americans were a political party, that party would have made up more than half the country since the start of the 20th century. But legislators from that party (those who last worked in blue-collar jobs before entering politics) would never have held more than 2 percent of the seats in Congress.

Those data end in 1998, but Carnes maintains his own database using similar metrics that picks up again in the mid-2000s. He finds that the line has remained flat, or if anything declined. At the state and local level, the picture isn’t much better. According to theNational Council of State Legislators, the share of legislators who worked in business in a non-managerial position (i.e., workers) has declined from 4.4 percent in 1976 to 2.8 percent in 2007.

Carnes defines class by occupation, and although his main regression finds that high-income congresspeople are more economically conservative than other members, the results are not statistically significant and not as strong as the correlation with occupation. However, other studies suggest that certain votes certainly contain an income component. Michael Kraus and Bennett Callaghan find that rich members of the House are more likely to accept high levels of inequality than less rich members. The effect is particularly strong on Democrats (see chart).

In a recent study, political scientist Christian Grose finds that “members of Congress with more money invested in the stock market were more likely to vote to increase the debt limit, presumably in order to avoid a market crash.” John Griffin finds that wealthier legislators were more likely to cosponsor and vote for bills to repeal the estate tax. This held even after controlling for party affiliation, their views on other taxes and their constituent opinions. A Mother Jones investigation finds that the 10 richest members of Congress (a bipartisan group) all voted to extend the Bush tax cuts.

It is therefore clear that we need more workers in office, but what will the impact be for the gains of women and people of color? Carnes finds that we can have our cake and eat it too. Using the Local Elections in America Project (LEAP) database of 18,000 local and county elections in California, he finds that working-class candidates are less likelyto be white men that white-collar candidates (see chart).

At the federal level, Carnes finds that between 1999 and 2008,

the average male member of Congress spent about 1 percent of his labor precongressional career in working-class jobs, while the average female member spent about 3. The average white member spent an average of 1 percent of his career in working-class jobs, compared to 3 percent among the average black or Hispanic member and 5 percent among the average Asian member.

It is clear, then, that policies to increase working-class representation in Congress might also increase the representation of women and people of color. But what policies could do so? Carnes tells Salon that in yet unreleased research he finds that publicly financing elections can increase working-class representation.

This isn’t surprising. A study of New York City’s public financing scheme finds that it increased the class and racial diversity of political donors. Carnes also argues that recruiters need to do more to encourage working-class voters to run. In a recent paper with David Broockman, Melody Crowder-Meyer and Christopher Skovron, he finds that “party leaders exhibit some biases against blue-collar workers” which likely prevent many from running. Research on the lack of candidates of color has also found such biases.

Carnes tells Salon that another solution is programs like the AFL-CIO “Labor Candidate School,” which began in New Jersey but now exists in North Carolina, Oregon, Nevada, Maine, New Haven and New York City. The programs, which train politically savvy members to run for office, have a good success rate; 75 percent of those who run after going through the New Jersey program win their races. Carnes tells Salon he’ll be working on an effort in Durham next year. “I believe in the potential of this model so much, I’m going to try it out myself,” he says.

As the Democratic Party increasingly moves to the center to please an elite donor base, the last hope for action on economic inequality might be more blue-collar politicians.

This piece originally appeared on Salon