If you want to understand the perverse incentives that exist on Capitol Hill, check out the Great Healthcare Cashout — the dozens of congressional staffers, lawmakers, and executive-branch officials who shaped President Obama’s health-care law, who are now working as lobbyists or consultants for the companies the law regulates, subsidizes, and protects.
Megan Wilson at The Hill has a good story on it today:
“When Biden leaned over [during healthcare signing] and said to Obama, ‘This is a big f’n deal,’” said Ivan Adler, a headhunter at the McCormick Group, “he was right.” Veterans of the healthcare push are now lobbying for corporate giants such as Delta Airlines, UPS, BP America and Coca-Cola, and for healthcare companies including GlaxoSmithKline, UnitedHealth Group and the Blue Cross Blue Shield Association.
Wilson finds 30 names. Here’s one example:
The firm Avenue Solutions, for instance, recently hired Yvette Fontenot, a former staffer for both the Senate Finance Committee, which wrote ObamaCare’s tax-related provisions, and HHS’ Office of Health Reform, which is assisting the implementation. Since her hire in April, the four-woman firm has picked up the Health Care Service Corporation as a client, and Fontenot is now lobbying for the Blue Cross Blue Shield Association and the National Electrical Manufacturers Association as well.
Here’s are my two main problems with this:
1) Incentives: Every time Congress passes a big “reform,” many the law’s authors get lucrative jobs in the regulated and subsidized industry. The staffers who remain watch their former wealthy colleagues buy nicer cars and houses. Next time a reform comes up, the authors’ incentives are to (a) make sure they pass something, however corrupted the law gets, (b) to play ball with industry, and (c) the leave the bill flexible — i.e., gamable.
2) Anti-competitive effects: These lobbyists cost real money. The incumbent businesses will hire them up. This basically adds to the cost of doing business, heightening barriers to entry, stultifying competition.
I’ve been tracking this since the law passed. Here’s my growing chart of the Great Healthcare Cashout.
(UPDATE 12:47 pm: Peter Suderman has a good take on this issue over at Reason, contrasting the facts of Obamacare to the rhetoric of Obama.)