How Big Money Corrupts the Budget

I was there when lobbyists discovered the congressional budget process. It was 1975 and I was a summer intern with the Senate Budget Committee. The committee’s Democratic chairman, Ed Muskie from Maine, had just done what at the time was considered unthinkable: He successfully led a charge on the Senate floor against a defense authorization bill.

The floor fight was unprecedented. The Senate Budget Committee had only just come into being—it, along with its House counterpart, was created by the sweeping Congressional Budget Act the year before. For a new committee to challenge the powerful Senate Armed Services Committee was shocking. The Armed Services Committee chairman, John Stennis of Mississippi, was known for his legendary parliamentary skills, and the defense authorization bills reported out of his committee were seldom challenged. But Muskie wanted to make clear there was a new budget sheriff in town and he won.

This was the moment that lobbyists realized they had to pay attention to the budget process. Suddenly, lobbyists were interested—an interest that bordered on panic. The reason was simple: No matter how much good will and how many solid connections a lobbyist may have had with members of Armed Services (and every other committee that allocated dollars), that committee’s will could now be thwarted by a committee that had staff the lobbyist didn’t know, members for whom he or she hadn’t raised any money, and access to a new Congressional Budget Office that independently crunched numbers. And it would all be done using new concepts and terms and a very hard-to-understand process that most lobbyists never before had to grasp.

The calls, letters, and personal visits from lobbyists started the next morning. Budget committee hearings that up to that point had barely drawn a handful of Capitol Hill tourists were now so crowded with lobbyists from military contractors and government affairs liaison officers that it was often standing room only, with a line out the door of others waiting to get in. The interest from lawyers, military contractors, trade associations, senators’ legislative assistants, and government affairs officers from the Pentagon and each of the service branches was so great that the briefing sessions on the budget process we previously couldn’t fill were suddenly being conducted daily.

That was the moment when lobbyists discovered the congressional budget process. It was also the moment when budget committee decisions free of lobbyist influence ended and action on the deficit, debt, and federal priorities started to be determined more by those who could devote resources to getting what they wanted than by national need and appropriate fiscal policy.

The change was swift and decisive. The following year’s budget resolution was far more difficult to draft because there was significant opposition from the military spending community—that is, from the lobbyists—to the lower defense number that was being considered. The post-Vietnam War “peace dividend” that was supposed to result in funds being shifted from the Pentagon to domestic purposes never happened, in large part because of the lobbying that took place in the budget committees and on the floors of the House and Senate. The result? Not only was the Defense Department budget that had been expected to be cut left largely untouched, but the “transfer amendment”—the attempt by House members to shift the funds that the budget committee was unable to move because of the pressure that was applied—was resoundingly defeated that year and every year it was offered.

The Pentagon and the Tax Code

This was hardly the first time that lobbyists had influenced what and who the federal government taxes and how it spends the revenue it collects; it was just the first time they had wielded that power in the new budget process. In the close to 200 years before that formal federal budget process had gone into effect, the committees with jurisdiction over taxes and spending were always primary targets for those who wanted more from Washington, who needed to make sure they got no less than they got before, and who sought to deny federal largesse for others.

The reason for this lobbyist involvement and success in the allocation process is that, even though the federal budget ultimately can be reduced to numbers, spending and taxing decisions are not—indeed cannot be—data-driven. As much as we all might like to believe otherwise, objectively comparing the relative worth of projects across departments and agencies that do very different things is virtually impossible. For example, how do you decide whether 1,000 more students getting lunch all year is a “better” expense than having 1,000 more rangers in our national parks? For the record, the last attempt to do anything like this was President Jimmy Carter’s plan to impose something called “zero-based budgeting” for federal agencies, a process that was supposed to allow for the prioritizing of programs that do very different things and for the lowest-ranked ones to be dropped. That was a laughable failure; federal agencies and departments were unwilling and incapable of applying the concept, and no program in one department was eliminated because it was determined to be a lower priority than some other program in a different department. Three-plus decades later, the initials “ZBB” still evoke snarky comments and absolute contempt from federal budget wonks everywhere.

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