Insurers Paid $164M in 2009 to Spin Congress, But Don't Have a Lot to Show for It
Insurers are traditionally among the most generous when it comes to passing out largesse to Congress in the form of lobbying. But last year they outdid themselves, giving away a record $164.3 million, according to the Center for Responsive Politics' Open Secrets website. And with the Supreme Court clearing the way, 2010 looks like an even bigger year for the open-ended checkbook amid the unpredictable elections this fall. Morality aside, the big question is: will insurers get their money's worth?
Giants like Blue Cross/Blue Shield gave $23.2 million to dent or defeat President Obama's health care plan. But it passed anyway, the first time in 50 years that the industry has seen any reform. But a single setback doesn't mean total loss. Blue Cross/Blue Shield lobbyist Brett Lieberman told insurancenewsnet that his organization's lobbyists are working with Congress to help "implement" the program, which phases in over the next eight years. So there's still plenty of wiggle room.
Some victories are already chalked up in the win column. The Property Casualty Insurers Association of America, which spent $750,000 last year, has apparently succeeded in removing itself from the impending financial reform package, which passed the Senate last week.
Property insurers don't believe they should be regulated like banks. First, they say, they are not as highly leveraged as the banks, second they have less risky investments, and third they are already regulated by each state insurance commissioner. All good arguments, except that AIG was once a property insurer that was able to game the system -- by calling itself a bank.
Insurers are smart in hedging their bets. A tally of contributions shows that Democrats outpaced Republicans in most of 2009 by 10 percent, although this year the GOP seems to be gaining. With recent Tea Party victories and the flame-out of incumbents like Pennsylvania Republican-turned-Democrat Arlen Specter, they may want to hedge their bets even more, rather than simply throwing wads of money at current officeholders. New York Democratic Sen. Charles Schumer is the insurance industry's leading cash cow among incumbents with nearly $300,000, according to insurancenewsnet. He's hardly considered a friend of the industry, but as the saying goes, "keep your friends close and your enemies closer."
One can rant and rave about all this influence peddling. But with the Supreme Court's Citizens United decision, it's now easier for companies -- even foreign companies -- to buy influence. Even though that decision was called into question by President Obama in his State of the Union address, it still stands as law.
Insurers are normally among the biggest backers of lobbying efforts, second only to pharmaceuticals, but last year they were surpassed by the oil industry, according to OpenSecrets. This year, given BP's disaster in the Gulf of Mexico, big oil is likely to reach even deeper into its pockets.