Washington’s Recession-Proof Industry

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Here’s one sector that hasn’t suffered in the recession: Washington lobbyists.

Since 2000, the financial services industry’s spending on federal lobbying rose 102%, to $472.9 million last year, according to an analysis by the Center for Responsive Politics, a nonpartisan group that tracks lobbying. Spending by the pharmaceutical and health-products industries, meanwhile, rose 139%, to $240.3 million last year. The electric utilities industry increased its spending by 139%, to $191 million, while the oil and gas industry raised its spending by 184%, to $146.5 million, last year. Both increases can be attributed in part to the climate-change debate. And business groups in general got busier in the Obama era as well. The U.S. Chamber of Commerce, Washington’s wealthiest lobbying outfit, and the Business Roundtable, which represents corporate CEOs helped push spending in business associations’ sector up 203%, to $170 million, last year. “It’s the kind of expansion that any industry would have envied during that very dark period,” says Dave Levinthal, editor of opensecrets.org, the Center for Responsive Politics’ blog.

None of this should be surprising. Businesses mobilized when Obama was elected first to prevent — and then to shape — the health care and financial reform measures that Congress adopted in 2010. Both measures were once-in-a-generation, multi billion dollar reforms that industries were keen to fashion according to their interests. What is more unexpected is that even as Washington’s lobbying industry spends more money than ever, the pool of registered lobbyists is shrinking: The number of registered lobbyists — 12,986 — is nearly 4% higher than a decade ago, but it’s lower than the recent peak of 14,885, in 2007, according to the CRP’s analysis of federal records.

The reasons are two-fold. First, firms are hiring a narrower group of lobbyists – often former Congressional staffers and elected officials with formidable rolodexes, at six-figure salaries, Levinthal says. It’s hard to create a profile of who is leaving the lobbying industry. The second reason is President Obama’s January 2009 Executive Order banning former lobbyists from working the federal agencies they once lobbied. That led many potential lobbyists to shy away from registering as one in the first place. Exhibit A: Until very recently, Chris Dodd was a Democratic senator from Connecticut. Now, he runs the Motion Picture Association of America. But he isn’t a registered lobbyist. “If you’re trying to stay in the game but don’t want that ‘lobbyist’ label attached to you,” Levinthal says, “you operate differently.”