Lobbying Behind the Auto Industry Financing and Restructuring Act

Lobbying Behind the Auto Industry Financing and Restructuring Act

The objective of this work is to focus on the original bailout bill of the car companies America. The bill's name is the 'Auto Industry Financing and Restructuring Act' in what is an attempt to prove how the various interest groups, some that had been at odds with each other for most of their history came together in order to lobby congress in order to get this bill passed. Sources that will be examined include congressional testimony, campaign donations to political leaders and grass root efforts used to mobilize voters in order to get members of congress to support this bill. While some history and background of lobbying is needed a majority of this work will focus on the bill and the efforts to get this bill passed by these groups.


The work of Thomas R. Dye entitled: "Interest Groups: Getting Their Share" states that interest groups are "organizations that seek to influence government policy. Where the electoral system is organized to represent geographically defined constituencies, the interest group system is organized to represent economic, professional, ideological, religious, racial, gender, and issue constituencies. Interest groups serve as a check on majoritarianism -- that is, they help counter the tendency of democratic governments to allow the faint preferences of the majority to prevail over the intense feelings of minorities. Interest groups seek special benefits for their members. The cost of these benefits is dispersed over all taxpayers, thereby concentrating benefits to the few while making the many pay for them. This process has the potential of leading to organizational sclerosis, which is when the burden of so many special benefits to interest groups lowers the general standard of living in society." (Dye, 2008)

Dye notes that it was noted by James Madison that the formation of interest groups began at the "outset of the republic" and that Madison made the observation that "the most common and durable source of factions have been the various and unequal distribution of property." (Dye, 2008)

In fact the major social movements in American history are stated to have all been "spawned by important interest groups" and that these include: "...the abolitionist movement prior to the Civil War, the formation of the NAACP in 1910, and the rise of large national trade unions in the 1930s. The women's suffrage movement led to the formation of the League of Women voters in the early twentieth century, and the feminist movement of the 1960s led to the formation of the National Organization for Women. Wars have also created interest groups, such as the American Legion and the Vietnam Veterans of America." (Dye, 2008)


Organized interests in Washington are stated to include those in the following categories: (1) Business and trade organizations; (2) professional associations; (3) organized labor; (4) Farm Organizations; (5) Women's Organizations; (6) religious groups; (7) Public interest groups; (8) single interest groups; (9) Ideological groups; and (10) government lobbies. (Dye, 2008)

The First Amendment to the U.S. Constitution guarantees the right to lobby in its citation which states that the right exists to "petition the government for a redress of grievances." (Dye, 2008)

The government however, can and does regulate lobbying. Lobbyists are required through the Regulation of Lobbying Act to "register and report what they spend" however, many of the lobbying groups have not ever registered.

The top ten rated lobbyists in terms of the power that they hold in Washington are stated by Dye to include those as follows: (1) American Association of Retired Persons; (2) American Israel Public Affairs Committee; (3) AFL-CIO; (4) National Federation of Independent Business; (5) Association of Trial Lawyers of America; (6) National Rifle Association of America; (7) Christian Coalition; (8) American Medical Association; (9) National Education Association; and (10) National Right to Life Committee. (Dye, 2008)

It is stated by Dye (2008) that lobbyists pursue a combination of the following seven general strategies as follows: (1) public relations; (2) access; (3) information; (4) Grass-roots mobilization; (5) protests and demonstration; (6) coalition building; and (7) campaign support. (Dye, 2008)

II. HR 7231 (2008)

HR 7321 was implemented by the 110th Congress 2D Session (2008) for the purpose of authorizing financial assistance to eligible automobile manufacturers, and for other purposes. This bill states that due to a "combination of factors, including errors in the business model of domestic automobile manufacturers, and emergency economic circumstances, has prevented the domestic automobile industry from securing credit from other sources, and has led to the possibility of the failure of the domestic automobile industry, which failure would have systemic adverse effect on the economy." (HR7213, 2008)

Because of this reason this bill states that action is to be taken and "in the form of financial aid to the domestic automobile industry is necessary to stabilize the economy." (HR7213, 2008)

The purpose of the bill includes those stated as follows: (1) to immediately provide authority and facilities to restore liquidity and stability to the domestic automobile industry in the United States; and; (2) to ensure that such authority and such facilities are used in a manner that (a) results in a viable and competitive domestic automobile industry that minimizes adverse effects on the environment; (b) enhances the ability and the capacity of the domestic automobile industry to pursue the timely and aggressive production of energy-efficient advanced technology vehicles; (c) preserves and promotes the jobs of American workers employed directly by the domestic automobile industry and in related industries; (d) safeguards the ability of the domestic automobile industry to provide retirement and health care benefits for the industry's retirees and their dependents; and (e) stimulates manufacturing and sales of automobiles produced by automobile manufacturers in the United States. It is related that the President would designated an individual who would be in charge and authorized to direct "the disbursement of bridge loans or enter into commitments for lines of credit to each automobile manufacturer that submitted a plan to the Congress on December 2, 2008. (HR7213, 2008)


Lobbyists gain access to policy makers through interest groups that develop ties with policy makers through making the provision of not only information and campaign funds but also votes and publicity as well as public research and education. Interest group advantages over individuals in terms of exerting influence includes having more time in which they can pursue special interests as well as the money and expertise to back their efforts which are of an ongoing nature. Interest groups additional are able to gain access to policy makers through areas such as entertainment use for support buildings among the constituents of policy makers and as well through hiring of lobbyists. The interest groups form political action committees (PACs) for the purpose of providing contributions for political campaigns.

Contributions of interest groups are stated by Dye (2008) to be channeled through political action committees (PACs) which are stated to have "originated in the labor movement as a way around laws prohibiting unions from contributing to elections." (Dye, 2008)

Corporations were encouraged to create their own PACs through the Federal Election Campaign Act of 1974 and since this time the PACS are stated to have "proliferated and now business PACs far outnumber labor PACS." (Dye, 2008)

The Federal Election Commission (FED) is charged with regulating PACs and therefore makes it a requirement that the PACs "register and report their finances and political contributions." (Dye, 2008)

Interest groups not only lobby congress but as well these groups attempt to exert influence upon governmental departments and agencies." (Dye, 2008)

There is a large level of competition among interest groups and this is stated to many times lead to "policy networks, in which influence is associated with a complex and sometimes countervailing interaction in a common policy areas among lobbyists, elected officials, staff personnel, bureaucrats, journalists and private-sector experts." (Dye, 2008)

Dye states that there is a "pattern of revolving doors by which members of a policy network switch jobs among federal agencies, legislative staff and private industry interest groups in a practice which raises conflict-of-interest issues." (Dye, 2008)

Interest groups also seek to exert influence upon the judicial system which can be accomplished through filing of amicus curia (friend of the court) briefs which serve to "help bolster court cases in which a group is interested." (Dye, 2008)

The work of Tripathi, Ansolabehere and Snyder (2002) entitled: "Are PACT Contributions and Lobbying Linked? New Evidence from the 1995 Lobby Disclosure Act" reports having conducted a study using the 1995 Lobby Disclosure Act data for assessing the argument "that PAC contributions are used to gain access to legislators" and states that findings show that there is a "much stronger connection between lobbying and campaign contributions than previous statistical research has revealed -- groups that have both a lobbyist and a PAC account for 70% of all interest group expenditures and 86% of all PAC contributions." (Tripathi, Ansolabehere, and Snyder, 2002)

Findings also show…