By Thomas Ferguson
THE YEAR IS 1909. The U.S. income distribution is about as lopsided as it is today. J. P. Morgan is fine-tuning a tariff bill by telegraph from his yacht. Morgan and his fellow robber barons have for years reliably tied Congress up in knots whenever anyone proposes regulating trusts, railroad rates, financial speculation, or labor disputes. A notoriously corrupt ring of U.S. senators, the so-called “Millionaires Club,” is on hand to bury in committee any measures that the corporate titans frown upon.
Fast-forward to 2011. Being a millionaire in Congress is nothing special — just about half of all members are one. The legislative process works less operatically, but the result is pretty much the same: legislative gridlock punctuated by occasional blatant special-interest legislation. Banks are rescued; the unemployed are left to their own devices. The housing market is left in free fall, with the bailed-out banks mostly still left to call the tune on foreclosures.
As national income stagnates, financiers submerge financial reforms and derivatives regulation under waves of campaign contributions. Meanwhile, a vast array of interested firms and investors dispatch armies of lobbyists to stymie Congressional action on climate change, block the government from bargaining down prices of drugs paid for by federal health programs, and keep tax increases forever off the national agenda.
We watch the news to see if Congressional stalemates over deficits will lead to a government default that would throw world financial markets into turmoil or force draconian, across-the-board budget cuts at Thanksgiving time. But while we hold our breath, popular discussions about Congress have taken a curious turn. Pundits talk nostalgically about the good old days, when representatives from the two parties regularly played golf together and compromised their differences in the name of the larger national interest. Today such outcomes are said to be impossible. But why, exactly?
The rivers of political money that now swirl 24/7 around Capitol Hill surely play a role in producing the great D.C. stalemate machine. But tired recitations of astronomical campaign-finance spending totals don’t tell the full story. Neither does the observation that since the 1990s, Republican leaders both in Congress and out have raised enormous amounts of money from investor blocs that plainly hope to roll back the New Deal as a whole. We need to look at the bigger picture. The tidal wave of cash has structurally transformed Congress. It swept away the old seniority system that used to govern leadership selection and committee assignments in Congress. In its place, the parties copied practices of big-box retailers like Walmart, Best Buy, or Target.
Uniquely among legislatures in the developed world, our Congressional parties now post prices for key slots on committees. You want it — you buy it, runs the challenge. They even sell on the installment plan: You want to chair an important committee? That’ll be $200,000 down and the same amount later, through fundraising. Unlike most retailers, though, Congressional leaders selling committee positions never offer discounts. Prices only drift up over time.
This practice is perhaps the one case where bipartisanship flourishes in Congress today. The Democrats’ 2008 price schedules quoted in Currinder’s Money in the House are just variations on themes introduced by the Republicans in the 1990s, when Newt Gingrich brought in the earliest versions of “pay to play” and Tom DeLay consulted computer printouts of members’ contributions at meetings to decide on committee chairs. Everybody in D.C. is in on the game. Only the public is still in the dark.
NEW NORMAL—Posting prices in this fashion does more than energize members of Congress to hunt up new sources of cash in hope of advancing their careers and winning reelection. The practice makes cash flow the basic determinant of the very structure of lawmaking. Instead of buffering at least some outside forces, Congressional committees and party leadership posts reflect the shape of political money — and in our New Gilded Age, it is obvious where most of that comes from.
The whole adds up to something far more sinister than the parts. Big interest groups (think finance or oil or utilities or health care) can control the membership of the committees that write the legislation that regulates them. Outside investors and interest groups also become decisive in resolving leadership struggles within the parties in Congress. You want your man or woman in the leadership? Just send money. Lots of it.
On the edges, of course, factors besides money still play some role, especially in ordinary committee assignments. But the New Normal looks like this: In 2009, when the Democrats controlled the House, their leadership slotted many junior representatives on the Financial Services Committee so they could haul in cash with both hands to enhance their prospects for reelection. All the money talked; today, despite the passage of the Dodd-Frank financial reforms, U.S. regulators can’t tell which American financial houses are exposed to what risk, if default by Greece knocks over one or another big European bank.
But the real rub is the way the system centralizes power in the hands of top Congressional leaders. In the new pay-to-play system, individual representatives dole out contributions to their colleagues to gain support for their individual bids for key positions within each chamber. But the system also requires them to make large contributions to the House and Senate national campaign committees. These are normally controlled by Congressional leaders in each chamber (along with, perhaps, the White House when the president comes from the same party).
MONEY TALKS—When cash is king, access to it determines who rules. The Congressional party leadership controls the swelling coffers of the national campaign committees, and the huge fixed investments in polling, research, and media capabilities that these committees maintain — resources the leaders use to bribe, cajole, or threaten candidates to toe the party line. This is especially true of “open-seat” races, where no incumbent is running; or in contests where an obscure challenger vies to upset an incumbent of the other party. Candidates rely on the national campaign committees not only for money, but for message, consultants, and polling they need to be competitive but can rarely afford on their own.
As though by an invisible hand, Congressional campaigns thus insensibly acquire a more national flavor. They endlessly repeat a handful of slogans that have been battle tested for their appeal to the national investor blocs and interest groups that the leadership relies on for resources. And crossing party lines becomes dangerous indeed, as the recent vote to raise the debt ceiling vividly illustrated. More than half the Tea Party Caucus voted with Speaker Boehner, despite heavy pressure from well-financed ultra-right groups such as the Club for Growth, and the Tea Party’s strident opposition to raising the debt ceiling.
This concentration of power also allows party leaders to shift tactics to serve their own ends. They grandstand by trying to hold up legislation. They push hot-button legislative issues that have no chance of passage, just to win plaudits and money from donor blocs and special-interest supporters. When they are in the minority, they obstruct legislation, playing to the gallery and hoping to make an impression in the media. Aware that most Americans pay little attention, both parties flood the airwaves with more of the same old same old, hoping that some of it will stick.
The parties’ efforts to emulate Best Buy, in short, create true Legislative Leviathans. They turn Congress into a jungle where individual members compete frantically for donations. The system also produces top-heavy, cash-rich leadership structures within each party. It ensures that national party campaigns rest heavily on slogan-filled, fabulously expensive lowest-common-denominator appeals to collections of affluent special interests. The Congress of our New Gilded Age is far from the best Congress money can buy; it may well be the worst. It is a coin-operated stalemate machine that is now so dysfunctional that it threatens the good name of representative democracy itself.
But democratic legitimacy is far from the only value at risk as the 2012 election approaches. Over the long run, the bonfire of inanities fueled by gridlock has encouraged more and more investors and interest groups on the right to keep raising the stakes. Groups like the Club for Growth, the Heritage Foundation, and the Cato Institute have become ever bolder in challenging Republicans whose conservative credentials they deem suspect. Establishment Republican leaders in Congress, even with all their advantages, have a harder and harder time containing these groups. The leadership only just prevailed in the battle over the debt ceiling this summer. In a globalized world that is increasingly nervous, however irrationally, about budget deficits and sovereign debt repayments, it would be a mistake to underestimate how much havoc a small group of zealots could wreak in the next few months, as taxes and the budget promise to redefine American politics.
Thomas Ferguson is Professor of Political Science at the University of Massachusetts, Boston, and a Senior Fellow at the Roosevelt Institute.
Thomas Ferguson gave a preview of this article recently in an interview with Dylan Ratigan: