A couple of weeks ago the puns were flying everywhere around Capitol Hill as Members expressed outrage – and no shortage of pluckish humor – when the FBI turned up $90,000 in cash in Congressman William Jefferson’s freezer. Comments about the power of cold, hard cash abounded everywhere – including this blog. Others talked about frozen assets and the like. Everyone got a good yuk except Jefferson, who gamely suggested there was a more benign explanation for those freeze-wrapped stacks of cash, though he was not at liberty to talk about it just yet.
That episode – and its reaction – comes to mind this morning after reading Thomas Friedman’s column in the New York Times [Times Select subscription required]. Friedman is responding to General Motors, which did not react well to an earlier column of his that lambasted the automaker for offering $1.99 gas for a year as an incentive to buy its gas-guzzling SUVs and other big cars.
In today’s column, Friedman notes that GM’s business moves work hand in hand with their strategy in Washington – most particularly in dealing with that troublesome law (known in Hill jargon as CAFE standards) that requires the automakers to meet gas mileage standards for their fleets of cars.
Since that bill was first enacted in 1975, American automakers have danced around it like a whirling dervish – most significantly by rewriting the rules classifying SUVs as light trucks instead of cars. That gave them lower mileage requirements, which was just what the doctor ordered for the ailing auto companies in the pre-Katrina, pre-Iraq war era, when gas was less than $2 a gallon and the Big Three were rolling out as many big-profit SUV’s as their assembly plants could handle.
Congress has graciously permitted this ongoing dance over the years, mindful of the millions of dollars in campaign contributions that the auto industry bestows every year – even though most of that comes from dealers, not manufacturers. (They’re also mindful of the fact that the industry’s home state of Michigan is a perennial swing state in presidential politics.)
I bring this up because money has its own logic in Washington. Members need it to fill the coffers of their reelection campaigns – in the last election the average House race cost just over $1 million; Senate seats were going for about $7.2 million. Industries respond well to that need, showing up at fundraisers, delivering checks on a regular basis, and thereby building relationships that last for years. Like Pavlov’s dogs, incumbents have come to expect the contributions to roll in year after year, as long as the industry remains relatively happy.
Of such logic are loopholes made. And also dilemmas. When an industry can stave off disaster either by retooling their factories and business plans or by living a few more years on an economically-illogical loophole from Congress, which do you think they’ll choose? And for how long? And at what price?
Washington is full of unpleasant choices to be made, and they’re tough enough without the logic of cold, hard cash getting in the way. And I don’t just mean the kind that’s stashed away in freezers.