K Street a Bargain

In today’s New York Times, the article “Go Ahead, Try to Stop K Street,” an argument is quoted from Newt Gingrich that you have to shrink government to curb lobbyists. “There is $2.6 trillion spent in Washington, with the authority to regulate everything in your life,” he said. “Guess what? People will spend unheard-of amounts of money to influence that. The underlying problems are big government and big money.”

Curbing the budget will only reduce the acceleration of lobbying, not reduce lobbying. It is a bargain. The Indian tribes are just smart to get in on it (if not in their choice of representation). In my joint paper with Livingston and Jurist, we say the following:

National lobbying of Congress and the President in 2004 totaled $1 billion. That may seem like a lot, but it is a pittance compared to the $2.3 trillion in Federal outlays. Congress and the President also pass laws and make executive orders that implicitly subsidize through loan guarantees, forbid activities altogether, impose work and investment rules that implicitly tax certain activities, and establish through the courts and federal agencies how property rights are defined. Thus, it is possible that Congress and the President influence perhaps twice as much of the economy as the Federal Government spends. Given that, $1 billion to buy influence on Capitol Hill is surely a bargain. With 589 bills passing both houses of Congress (enrolled) in the 108th Congress, that works out to about $3.3 million of lobbying per enrolled bill. Adding in campaign contributions per enrolled bill (about $400 million per session for the President