To reduce special-interest influence forever, reformers like John McCain should scale back the regulatory state

by Randolph J. May
Legal Times, April 3, 2000

The Founding Fathers would be shocked-shocked! John McCain and Bill Bradley spilled the beans anew when they revealed there are "special interests" here in Washington, right in the seat of government.

During their campaigns, Senators McCain and Bradley charged that Washington is controlled by an "Iron Triangle" of lobbyists, money, and legislation, a triad that enables the special interests to exert undue influence in Congress and the federal bureaucracy. The insurgents urged campaign finance reform as the antidote.

Before you can run "special interests" out of Washington, you have to know who they are. One person's "special interest" lobbying may be another person's high-minded plea for action. The heads of the U.S. Chamber of Commerce and the AFL-CIO don't agree on the definition of a special interest. While many self-styled reformers profess to make such identification easy with bodacious capitalization-Big Tobacco, Big Oil, Big Labor, and Big Business-governing is ultimately about more than elephantine labels.

In reality, governing is about debating and reconciling differences of opinion on important public issues, including the size and shape of government itself. Differences that matter exist between those who favor or oppose new federal programs, pro-lifers and pro-choicers, gun controllers and gun advocates, and on and on. To be sure, all are backed up by interest groups, or at least groups of interested individuals, trying their level best to influence politicians and alter elections. And doing so not only by knocking on doors, but also by making campaign contributions.

No, the Founders really wouldn't be shocked that there are special interests pleading their favorite causes before Congress and the agencies. They would be shocked if it were otherwise.

FACTIONS FORESEEN

Don't forget that it was James Madison who explained in Federalist No. 10 that "as long as the reason of man continues fallible, and he is at liberty to exercise it, different opinions will be formed." He called those holders of different opinions "factions," a number of citizens "united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community."

According to Madison, the great object of government, the one to which the inquiries of The Federalist Papers largely are directed, is how to "secure the public good, and private rights against the danger of such a faction, and at the same time to preserve the spirit and the form of popular government." The answer supplied by the Founders, of course, was the creation of a republic firmly grounded in a system of separation of powers and checks and balances.

In Federalist No. 51, Madison offered an eloquent justification for such a system of separate and diffused powers. Emphasizing that divergent interests necessarily exist in a free society, he said: "This policy of supplying by opposite and rival interests, the defect of better motives, might be traced through the whole system of human affairs, private as well as public." (Indeed, in this one short brilliant essay, Madison referred nine times to the ever present "interests.") So the task of a democracy such as ours is not to eliminate the special interests, but to provide a structure in which the differences of the various interests are reconciled peaceably and fairly.

Granted, there is a legitimate concern that interest groups sometimes appear to exert an unseemly influence in our political process. Certainly, the amounts of campaign money awash in the system may create the appearance of influence being bought and sold. No one really believes-nor should they-that John Q. Citizen has the same access to his Democratic representative as the head of a powerful labor union, or to his Republican lawmaker as the head of the local chamber of commerce.

But McCain/Bradley-style campaign finance reform is not the right answer, particularly proposals that would limit expenditures by independent groups to comment on the candidates' records. This type of speech-limiting reform runs afoul of the First Amendment, unlike, say, a requirement for full and immediate disclosure on the Internet of all campaign contributions, a reform that would be welcome. Along with the checks and balances built into the Constitution, the Founders saw free speech as the primary means for preventing one interest group or another from gaining undue sway over the political process.

They also surely understood-even before the age of radio and television-that people who want to influence the affairs of government will use money to try to amplify their speech. Thus it was then with the colonial newspaper publishers and pamphleteers and likely ever will be, as long as important issues are decided in free elections. The Founders probably had more confidence in our ability to sort through the clash of ideas than do the present-day reformers and media cheerleaders.

No doubt the wealthier media companies, like the Washington Post Co. and the New York Times Co., rightly would cry First Amendment foul if lawmakers tried to limit what they may spend promoting their views in their newspapers, broadcasting and cable outlets, and on their Web sites. This is so, even though some argue that the huge sums they spend to maintain their dominant market positions allow them to wield far more influence than less well-heeled "press" interests with different views. And the media giants rarely remind their audiences of their own lobbying of Congress and the Federal Communications Commission on issues of special interest to them, such as repeal of ownership restrictions on newspapers and television stations.

If the would-be reformers want to make some progress in reducing special interest influence in our political process, without compromising First Amendment values, there is one sure, but surely difficult, way to do it: Reduce the size and scope of regulatory regimes and stop passing such open-ended legislation. Then the various interest groups will have less reason to raise huge campaign coffers to lobby lawmakers and federal agencies to gain advantage through regulatory gamesmanship. They would be forced instead to expend more of their competitive energies in the marketplace, rather than in congressional and agency meeting rooms.

A few numbers will confirm that there is indeed plenty to fight about. Last year, federal agencies promulgated more than 4,700 rules. Over 250 of these were considered "major" because the Office of Management and Budget determined they likely would have an annual effect on the economy of $100 million or more or would have significant adverse effects on competition, jobs, investment, or productivity. The Competitive Enterprise Institute estimates that federal health, safety, environmental, and economic regulations can add $700 billion annually in off-budget costs to the economy.

No doubt, the costs and benefits of so much regulatory activity are subject to dispute. What is not subject to dispute, however, is that with so many regulations having such a significant effect on the economy and our lives, interest groups of all stripes will engage vigorously in the political process to push their preferred outcomes.

Long before becoming such a vocal apostle of campaign finance reform, McCain, unlike Bradley, was a strong-and sometimes lonely-supporter of substantive regulatory reform. For example, he was one of only two senators to vote against the Telecommunications Act of 1996, because he believed that the overly regulatory bill would invite years of regulatory catfights by various competitors seeking to gain an advantage.

McCain correctly foresaw that the legislation left the FCC with too much discretion under the public interest standard to manage the transition to a competitive environment, arguing that "anything less than a date certain [for deregulation] will allow any competitor who benefits from artificial entry barriers to game the regulatory process." According to McCain, whether open markets are in the "public interest" can be "argued endlessly" at the agency, with the delay harming consumers.

Now that McCain has returned from the campaign trail to confront the "Iron Triangle" on his own turf, he should once again take up the cause of regulatory reform. The Founders surely understood that in a democracy it is impossible-and not desirable-to regulate the messiness out of politics by curtailing free speech. But it is possible to reduce the influence of special interests by reducing the size and scope of the regulatory state.

Randolph J. May is a senior fellow and director of communications policy studies at the Progress & Freedom Foundation in Washington, D.C. The views expressed are his own and do not necessarily reflect the views of the foundation. He may be reached at rmay@pff.org. His column, “Fourth Branch,” appears regularly in Legal Times.

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