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Screech Marks Political Gridlock May Be Bad for Some, but It's Often Good for Big Business

Legal Times  December 18, 2000

Pundits and politicians are fond of complaining about partisan politics causing gridlock in government.

But you won't hear corporate America grumbling very often. For them, generally, the less Congress does, the better.

"By and large, big business likes predictability, and gridlock provides a great deal of predictability," says Gerald Cassidy, the veteran lobbyist who runs Cassidy and Associates.

Indeed, the fact that most of the issues at the top of the 106th's agenda failed to pass was exactly the result sought by the legions of corporate lobbyists working the Hill.

Recent examples of this include a patients bill of rights, which would have increased regulation of HMOs and opened them up to lawsuits; Medicare drug coverage for seniors, which pharmaceutical companies feared would cut into profits; and efforts to regulate the tobacco and gun industries.

In nearly all of these cases, industry lobbyists developed their own legislation, the passage of which would have deflected the threat of more rigorous regulation. Failing the passage of industry-supported bills, simple inaction comes in a close second place. Every year that passes increases the chance that public interest-and congressional resolve-will fade.

"A lot of entrenched interests gain from no action," says Theodore Lowi, a professor of government at Cornell University and the former chair of the American Political Science Association. "Entrenched and highly privileged interests tend, with some exceptions, to gain from an inability to act." In general, the measures that have the most visibility, and thus are the most subject to gridlock, are ones that aim to regulate business.

"You would not want to stake your business strategy on passing a piece of legislation, but there are lots of pieces of legislation that can disrupt your business plan considerably," says Joel Jankowsky, head of the public policy practice at Akin, Gump, Strauss, Hauer & Feld.

Of course, not all lobbyists are hired to kill legislation.

Some companies have been fighting for passage of bills they feel would help their businesses. A prime example is the financial services industry, which succeeded last fall in pushing legislation that tore down the walls separating banking, securities, and insurance.

In general, deregulation efforts like the financial services bill tend to have an easier time getting through because the fight is between different business sectors, rather than partisans.

It is partisanship that has kept the financial services sector from attaining its other major goal-tightening bankruptcy regulations. As of last week, the bill had passed Congress but was being held up by the Clinton administration, which will likely veto it. Such a bill is hard to pass because it falls along partisan lines, with Republicans and conservative Democrats aligning themselves with credit card companies and banks, and liberal and centrist Democrats siding with trial lawyers and consumer groups.