Lobbying in Washington

THE spending was perfectly timed. In late October, mere weeks before election day, the National Association of Realtors (NAR) unleashed $49,000 worth of TV ads in Maryland's Second Congressional District. Its purpose: persuade voters to elect Republican Helen Bentley over the 10-term Democratic incumbent, Rep. Clarence D. Long.

Although Ms. Bentley had no control over this ''independent expenditure,'' in effect it added about 11 percent to her campaign funds. It may not have been the campaign's decisive factor - but she won by a slim 6,000 votes.

''The realtors felt Long had a very bad, antibusiness record,'' says a grateful Bentley aide.

Lobbies have a lot of political clout. This may seem an obvious statement, akin to ''the sun rises in the East.'' But some analysts say they feel that today's interest groups - numerous, well financed, sophisticated in technique - exert an ever-increasing influence over US government policy.

Are political-action committees (PACs) purchasing congressional seats? Has the proliferation of lobbies caused legislative gridlock? Is tax simplification, this fall's trendy political issue, thus doomed?

Examining the recent fortunes of the realtor lobby may provide some insight into these issues. The NAR, after all, is a titan of a lobby. With 661,000 members, it is one of Washington's largest member groups; its political action committee is consistently a top campaign contributor.

''Either the American Medical Association or the Realtors rank as the No. 1 PAC, depending on how you count the money,'' says Jane Mentzinger, assistant director of the Common Cause Campaign Finance Project. ''What makes the Realtors unique is they spend on both sides of the ideological spectrum.''

Between January 1983 and mid-October 1984, the Realtors PAC donated about $2. 3 million to federal political candidates, according to records on file at the Federal Election Commission.

In addition, Realtors registered 415,000 new voters and did $10 million worth of volunteer work for candidates, says the association's Washington head, Jack Carlson.

''The membership has become more politicized,'' Mr. Carlson says. ''They can see their customers and their own welfare being affected by government to a greater extent.''

Little of the Realtors' money was wasted: 87 percent of the candidates who received cash from the group's PAC won.

One main reason for this success rate was simply that the association directed the bulk of its funds to incumbents.

But Realtors did play a key role in toppling at least three House members they rated as antibusiness.

The Realtors' weapon in these campaigns was ''independent expenditures,'' a legal loophole that allows interested parties to spend as much money as they want on a particular race, as long as they do it on their own. (This loophole is currently being challenged before the Supreme Court.) Along with the $49,000 TV campaign favoring Rep. Clarence Long's opponent, Realtor independent spending financed expensive direct-mail campaigns that helped defeat Rep. Joseph Minish (D) of New Jersey and Rep. James McNulty (D) of Arizona.

In future campaigns, Realtors will devote even more of their cash to independent spending, says Carlson. ''Inflation has been eroding the signficance'' of direct contributions, he says. ''Where we may have on average accounted for 10 to 15 percent of a candidate's contributions many years ago, our gifts only account for 2 to 3 percent today.''

What does electoral involvement such as this gain the Realtors? How often does Congress, for whatever reason, do things the group approves of?

Carlson says Congress is far from a tame beast that does his bidding. During President Reagan's first term things did not go particularly well for the Realtors lobby, Carlson claims; he says tax changes have benefited heavy industry and short-term investors more than light real estate, and that in general ''high interest rate policies'' have battered his members' businesses. Congress, Carlson grumbles, is responsible for the fact that the percent of US families who own homes has declined since 1980.

OTHERS say the Realtors are a far more potent and successful force than Carlson lets on. ''It's not so much finance as grass-roots lobbying strength,'' says a fellow lobbyist, pointing out that the Realtors can deluge Capitol Hill with hundreds of thousands of post cards on almost a moment's notice.

President Reagan's 1981 tax bill, say lobbyists and congressional aides, glittered with provisions that pleased Realtors, foremost among them a reduction in the depreciable life of real property from 40 to 15 years.

This spring, the Senate Finance Committee decided it had been too generous in 1981 and tried to lengthen real property's depreciation period to 20 years. Alarmed, the NAR leaped into action - and won a compromise that set depreciation at 18 years.

At the same time, the Realtors helped defeat an amendment, suggested by Sen. Daniel Patrick Moynihan (D) of New York, that would have made real estate tax shelters less attractive. And they generated 200,000 letters from their members to Congress on the arcane subject of ''imputed interest.'' Congress was considering changes in the taxation of such interest that, in effect, would have made seller-financing of homes less attractive; the realtors' hard-sell letter campaign convinced legislators to postpone the change until July 1, 1985.

Now the NAR is gearing up for what might be called ''Tax Code: The Final Battle.'' The tax simplification plan just released by the Treasury attacks a number of provisions that Realtors hold dear.

''My phone is ringing off the hook,'' says Carlson, with calls from members upset about Treasury's proposal greatly to lengthen depreciation, among other things.

The simplified tax code would feature lower rates, across the board. But if your tax bracket drops from 50 percent to 25 percent, complains Carlson, the home mortgage deduction that used to save you $1,000 will only be worth $500, and will thus be ''diluted.''

''We would argue no dilution, no reduction in the overall incentives for investment and homeownership,'' he says. ''Given that objective, whatever simplification can be made, that's fine.''

It is hard to think of legislation that could draw more lobbying than tax reform. The tax code's complexity stems from the fact that it is full of exceptions to its general rules, exceptions that invariably benefit large interest groups. Any attempt to untangle tax law will thus provoke angry opposition from organizations that stand to lose advantages - as the National Association of Realtors' opposition shows. The fate of tax reform, then, could be used to help judge the overall power of special-interest groups.

''Use (tax simplification) as a prism,'' says Amitai Etzioni, a Carter White House adviser now on the faculty at George Washington University. ''If you watch what happens to that, you'll understand the way things are.''

Mr. Etzioni and other critics happen to believe that things are not so great. These observers say they feel that special interests have a firmer grip on government than at any time since the 19th century. Under this theory, interest groups, by pushing private agendas that benefit their members, slow down the economy, clog the legislative process, and in general make politics more divisive.

Capitol Hill lobbyists are like ''wrestlers battling over the contents of a china shop. They break more than they carry away,'' says Mancur Olson, a University of Maryland economics professor and the author of several academic studies of the subject.

In the 19th and early 20th century, Washington was beset by a few large and powerful lobbies who relied on women, food, and bills of small denomination.

Today, the problem is not so much behemoths, say critics, as diversity. The US population is splitting into narrower and narrower interest groups, each with specific goals, each with a Washington representative and a PAC. The number of association offices in the District of Columbia has doubled in the last 15 years; among those now listed in the city's phone book are the National Association of Pastoral Musicians, the National Association of Nameplate Manufacturers, and the Association of Miscellaneous Ornamental and Architectural Products Contractors.

THESE hundreds of lobbies have at their disposal modern weaponry and tactics. Today's communication and information technology makes possible hard-hitting grass-roots lobby campaigns, which inundate legislators with constituent mail on a particular issue, note University of Kansas political scientists Burdett Loomis and Allan Cigler. A record of excess along these lines was set last year, when financial institution lobbies roused depositors against the proposed withholding of tax on interest and dividend income, swamping Congress with millions of letters. The proposal was soundly defeated.

Then there is money. Contributions to federal candidates from PACs, the campaign finance arms of interest groups, were up 50 percent this election cycle , according to the latest Federal Election Commission statistics.

A typical House candidate will now receive almost one-third of his or her funds from PACs.

And PACs are not the only way a rich and sophisticated lobby, such as the Realtors, can use funds to benefit candidates. There are the legally unlimited independent expenditures. Interest groups are also allowed to pay members of Congress up to $2,000 for speeches.

It doesn't matter that much whether this money is explicitly ''buying'' votes , argues Etzioni.

Lobbies wouldn't spend it, he says, if they didn't feel it produced a Congress more sympathetic to their special interests, and thus less concerned with the overall interests of the nation.

''The decline of the political parties has made the problem worse,'' adds the University of Maryland's Professor Olson. ''Some concern for national effectiveness used to come from the parties.''

Not all observers are convinced that lobbies are gaining undue influence. A number of US political scientists argue that competing interest groups serve as advocates, helping government hear all sides of an issue.

''Special interests have been an important part of our political system since its beginning,'' says Roger Davidson, a specialist in American government for the Congressional Research Service.

Whether PAC spending distorts the political process is a matter of some debate. Michael Malbin, a fellow at the American Enterprise Institute, argues that members of Congress take money from so many PACs that the possible corrupting influence of each donation may be canceled. He doubts that contributions buy added access to lawmakers or cause them to vote often against their natural inclinations.

''All of us react strongly to our own particular concerns, and a fair number of us are likely to let those special concerns determine our vote,'' writes Mr. Malbin. ''As long as that is true, organized interests will continue to play an important role in electoral politics, whatever the rules of campaign finance.''

BACK at the NAR, Jack Carlson says there may be something to the thesis that hundreds of little groups, each after their own special tax break or quota, are preventing Congress from voting in the true national interest.

He says his own experience has taught him that there is a tendency for trade associations to keep splitting into smaller and smaller groups, like subdividing amoeba.

But says his own group is as broadly based as any, and thus wants things that are in general good for the country - incentives for homeownership, in particular.

''I don't think this trade association has crippled economic growth,'' he says.

Food, fund-raisers, favors are lobbyists' stock in trade

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