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The Obama administration is pushing Democratic proposals to more heavily regulate Wall Street and the financial sector. In light of the 2008 financial crisis and the ongoing recession, some might think that would be easy to achieve.
But that's not the case, said Lawrence Summers, one of President Barack Obama's top economic advisers.
"I expect that reform is going to pass. It's not easy. You've got a million dollars being spent, per congressman, in lobbying expenses on this issue. (The) industry has four lobbyists per member of the House and Senate working on this," Summers said, when asked about the prospects for financial reform on ABC News' This Week.
The new regulations are still being formulated. A bill in the Senate would create a council to watch for systemic threats to the financial system, and it would allow the Federal Reserve to oversee different types of financial institutions, not just banks.
We wanted to check Summers' statements that a million dollars was being spent per congressman, and that there were four lobbyists for every member of the House and Senate working on it.
To analyze his statements, we turned to the Center for Responsive Politics, a nonpartisan research group that has spent 25 years tracking money in politics. Much of their work involves the analysis of mandated disclosure documents for campaign finance and lobbying.
The most recent documents cover the year 2009; the filings for the first quarter of 2010 are due April 20.
The center analyzed spending on lobbyists by sector, with finance, insurance and real estate grouped into one category. For 2009, that sector's spending totaled just over $455 million. There are 435 members of U.S. House of Representatives, so that is more than $1 million per member. One could make an argument that senators are also technically members of Congress, but Summers said "congressmen," which typically means House members.
Summers also said that the industry has four lobbyists per member of the House and Senate. The finance, insurance and real estate sector employed 2,597 lobbyists in 2009, according to the center. Add 100 senators to the 435 House members and you get 535; that's 4.85 lobbyists for every member of Congress.
We must add a few cautions about these numbers. The insurance category includes a few health insurers, a group not likely to be lobbying on financial reform. Blue Cross/Blue Shield, for example, spent $14.3 million on lobbyists in 2009, and America's Health Insurance Plans spent $8.9 million. But other types of insurers would be interested in financial reform, because the legislation gives new authority to for the government to wind down failing companies that are not banks.
Additionally, the financial sector lobbies on some issues that are not strictly related to financial regulations. The American Bankers Association, for example, used seven lobbyists in 2009 to influence a major appropriations bill, according to the center.
Still, there's reason to think that the center's numbers come pretty close to the mark, said Dave Levinthal, a spokesman for the Center for Responsive Politics.
"As soon as the Obama administration came into office, it was evident that something was going to happen," he said. "This was a major issue last year and continues to be a major issue this year."
On taking office, Obama said one of his top priorities was new financial regulations, and legislators were working on them for much of 2009. The House of Representatives approved a bill on Dec. 11; the Senate has yet to vote on a bill.
Though the financial sector faced significant setbacks during the crisis of fall 2008, the sector's spending on lobbying in 2009 kept pace with or exceeded spending in previous years, Levinthal said.
Getting back to Summers' statement, he said, there is "a million dollars being spent, per congressman, in lobbying expenses on this issue. (The) industry has four lobbyists per member of the House and Senate working on this." There may be cases in which the financial sector did not spend the entirety of its $455 million in lobbying money strictly on financial regulation during 2009, or examples when some of its 2,597 lobbyists did not work financial regulation. But it's clearly one of the industry's top issues. And the analysis here is based on public records and disclosures. So we rate Summers' statement Mostly True.
This Week, Interview with Lawrence Summers, April 4, 2010
The Center for Responsive Politics, Finance, Insurance & Real Estate, Sector profile, 2009, spending
The Center for Responsive Politics, Finance, Insurance & Real Estate, Sector profile, 2009, number of lobbyists
The Center for Responsive Politics, Insurance, Sector profile, 2009, spending
The Center for Responsive Politics, Clients lobbying on H.R.1105 (omnibus appropriations), 2009
Office of the Clerk, U.S. House of Representatives, Member FAQs, accessed April 6, 2010
Office of the Clerk, U.S. House of Representatives, Vote on HR 4173, Dec. 11, 2009
Thomas, HR 4173
The Washington Post, House votes 223 to 202 to approve sweeping bill to overhaul financial regulatory system, Dec. 12, 2009
National Economic Council, National Economic Council Director: Lawrence H. Summers, accessed April 6, 2010
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