Democrats fail to reduce the power of money in politics

29th March 2022

Democrats fail to reduce the power of money in politics

Navient, in its 2021 midyear lobbying report, said the company had rallied behind a variety of student-debt-related issues, including improving loan-repayment programs, assisting borrowers in default on their debt, and easing the process for bankruptcy discharges. The company did not provide comment for this story.

In 2020, the industry donated about $715,000 to candidates, with the money evenly split between both parties, according to OpenSecrets.

Student-loan companies, through political action committees, are also major donors to political campaigns

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"Our concern is always that monied interests have a much bigger presence and effect on policy," Dan Auble, a senior researcher at Open Secrets who focuses on lobbying data, told Insider.

This spending isn't new. According to Open Secrets, student-loan companies have exhausted more than $47 million on lobbying the federal government and nearly $5.5 million on campaign contributions over the past decade, seeking to prevent student-debt policies that run counter to their interests.

Biden was the top recipient of contributions from student-loan companies in 2020, with $38,535, followed by his opponent, former President Donald Trump, who got $25,716

"There are other forces at work that are also influencing what's happening. So it's certainly not the only factor, but you can be fairly certain that the business interests involved in the student-loan issue are having their voices heard," Auble said.

Rep. Virginia Foxx of North Carolina, the highest-ranking Republican on the House Education and Labor Committee, has received nearly $30,000 in contributions from student-loan companies over the past two election cycles. She recently decried Biden's extension of the pause on monthly loan payments and has opposed student-debt cancellation.

The power of lobbying does not appear likely to weaken any time soon. Since Biden took office, Democrats have unsuccessfully sought to curb the influence of money in politics. The For the People Act, an elections and campaign-finance overhaul that passed the House last year but was blocked by the Senate, would have tightened ethics laws for federal officials and lobbyists.

Specifically, the legislation would have slowed the so-called revolving door of online lending services Iowa government officials who become lobbyists for the industries they previously oversaw, and rely on their insider knowledge and connections to push forward their clients' interests. More than half of the lobbyists in the education industry have walked through the revolving door, OpenSecrets has found.

"Lobbyists are actually writing legislation and pieces of legislation. They have relationships with the people on Capitol Hill and in the White House and the executive branch. They often have passed through the revolving door," Auble said. "They have a good idea of how to put pressure on the various levers of government. So it's clear that the close to $4 billion that is spent on lobbying each year is having some effect on policy."

Current law maintains that former senior-level government officials should hold off for a year until they engage in lobbying. The For the People Act would have doubled that waiting period to two years, as many officials often defy the current rules.

The bill would have also increased transparency by closing what's known as the "shadow lobbying" loophole, which refers to individuals who attempt to influence policy, for example, by meeting lawmakers or advising lobbying firms, but who are not actively registered as lobbyists.

"There's a lot of people on the Hill lobbying and meeting the definition of lobbying," Thurber said, "but they're not registered, and that's wrong. It needs to be enforced more."

Yet the over 800-page legislation failed in the Senate because Republicans widely opposed the bill, and Democrats could not overcome the 60-vote filibuster requirement.