Archive for October, 2010



How a little-known group shapes public policy

When you walk into the offices of the American Legislative Exchange Council, it’s hard to imagine it is the birthplace of a thousand pieces of legislation introduced in statehouses across the county.

Only 28 people work in ALEC’s dark, quiet headquarters in Washington, D.C.  And Michael Bowman, senior director of policy, explains that the little-known organization’s staff is not the ones writing the bills. The real authors are the group’s members — a mix of state legislators and some of the biggest corporations in the country.

“Most of the bills are written by outside sources and companies, attorneys, [and legislative] counsels,” Bowman says.

Here’s how it works: ALEC is a membership organization. State legislators pay $50 a year to belong. Private corporations can join, too. The tobacco company Reynolds American Inc., Exxon Mobil Corp. and drug-maker Pfizer Inc. are among the members. They pay tens of thousands of dollars a year. Tax records show that corporations collectively pay as much as $6 million a year.

With that money, the 28 people in the ALEC offices throw three annual conferences. The companies get to sit around a table and write “model bills” with the state legislators, who then take them home to their states.

Lobbying Or Education?

One of those bills is now Arizona’s controversial new immigration law. It requires police to arrest anyone who cannot prove they entered the country legally when asked. Hundreds of thousands of illegal immigrants could be locked up, and private prison companies stand to make millions.

The largest prison company in the country, the Corrections Corporation of America, was present when the model immigration legislation was drafted at an ALEC conference last year.

ALEC’s Bowman says that is not unusual; more than 200 of the organization’s model bills became actual laws over the past year. But he hedges when asked if that means the unofficial drafting process is an effective way to accelerate the legislative process.

“It’s not an effective way to get a bill passed,” he says. “It’s an effective way to find good legislation.”

The difference between passing bills and “finding” them is lobbying. Most states define lobbying as pushing legislators to create or pass legislation. And that comes with rules. Companies typically have to disclose to the public what they are lobbying for, who’s lobbying for them or how much they are spending on it.

If ALEC’s conferences were interpreted as lobbying, the group could lose its status as a non-profit. Corporations wouldn’t be able to reap tax benefits from giving donations to the organization or write off those donations as a business expense. And legislators would have a hard time justifying attending a conference of lobbyists.

Bowman says what his group does is educate lawmakers.

“ALEC allows a place for everyone at the table to come and debate and discuss,” he says. “You have legislators who will ask questions much more freely at our meetings because they are not under the eyes of the press, the eyes of the voters. They’re just trying to learn a policy and understand it.”

Much about ALEC is private. It does not disclose how it spends it money or who gives it to them. ALEC rarely grants interviews. Bowman won’t even say which legislators are members.

Is it lobbying when private corporations pay money to sit in a room with state lawmakers to draft legislation that they then introduce back home? Bowman, a former lobbyist, says, “No, because we’re not advocating any positions. We don’t tell members to take these bills. We just expose best practices. All we’re really doing is developing policies that are in model bill form.”

So, for example, last December Arizona state Sen. Russell Pearce sat in a hotel conference room with representatives from the Corrections Corporation of America and several dozen others. The group voted on model legislation that was introduced into the Arizona legislature two months later, almost word for word.

Read Part 1 Of This Report

Arizona state Sen. Russell Pearce

Prison Economics Help Drive Ariz. Immigration Law

An analysis of documents and records show that private prisons helped draft and pass the measure.

Bowman says that type of meeting is an informational exchange, meant to help legislators understand policy.

But first ALEC has to get legislators to the conferences. The organization encourages state lawmakers to bring their families. Corporations sponsor golf tournaments on the side and throw parties at night, according to interviews and records obtained by NPR.

Bowman says that’s nothing special: “We have breakfasts and lunch. They’re at Marriotts and Hyatts. They’re normal chicken dinner. Maybe sometimes they get steaks. Yeah, we feed the people. We think that it’s OK to eat at a conference.”

Videos and photos from one recent ALEC conference show banquets, open bar parties and baseball games — all hosted by corporations. Tax records show the group spent $138,000 to keep legislators’ children entertained for the week.

But the legislators don’t have to declare these as corporate gifts.

Consider this: If a corporation hosts a party or baseball game and legislators attend, most states require the lawmakers to say where they went and who paid. In this case though, legislators can just say they went to ALEC’s conference. They don’t have to declare which corporations sponsored these events.

‘Scholarships’ For Conferences

Kirk Adams, Arizona’s House speaker, went to ALEC’s most recent gathering in San Diego.

“I have been to ALEC’s conferences and they have been pretty educational — the ones that I’ve been to,” he says, adding that the time he spends with corporate executives does not influence his opinions on the issues.




Economy shows slight growth

The economy posted modest growth in its final report card ahead of crucial mid-term elections, expanding by just 2 percent as consumers remained cautious amid continued high unemployment.

The Commerce Department report released Friday showed the July-September quarter slightly outpaced the previous three months, when GDP grew by just 1.7 percent. The latest data quelled fears of a double-dip recession and showed that the economy was slowly mending after the worst downturn since the Great Depression.

But Austan Goolsbee, the chairman of the White House Council of Economic Advisers, said, “Given the depth and severity of the recession, considerable work remains before our economy is fully recovered. ”

The 2 percent growth in the third quarter falls far short of what is needed to reduce unemployment, which at 9.6 percent is a more important piece of data to most voters, said Brian Wesbury, chief economist at First Trust in Chicago.

“What it boils down to is the unemployment rate going into the final months of an election matters more than the GDP rate,” Wesbury told NPR. “We saw this in 1992, when GDP was accelerating even though it was doing so within the context of a jobless recovery.

“So far, that’s kind of the way the data feels to people today,” he said.

The government’s latest snapshot of the country’s economic health comes just days before Americans go to the polls to elect a new Congress.

Angry voters could cost Democrats control of the House, and maybe the Senate. The fragile economy means Americans with jobs are seeing scant wage gains and those out of work are facing fierce competition for the few openings that become available. Home foreclosures have soared.

Speaking on Thursday, White House press secretary Robert Gibbs tried to put the best face on the bleak economic picture, reminding Americans of the situation the President Obama inherited from his predecessor, George W. Bush.

Gibbs said the economy had gone from “contracting at 5 or 6 percent, losing 700,000-800,000 jobs a month to one that is growing in a positive direction and adding jobs.”

Wesbury also sees bright spots in the report, highlighting consumer spending, which rose at a 2.6 percent annual rate, the biggest quarterly increase since the end of 2006 before the recession hit. Consumer spending accounts for roughly 70 percent of national economic activity and plays a major role in economic growth.

Business investment also picked up in the latest report, with spending on equipment and software up at a 12 percent pace.

“In the last 6 months, demand has accelerated quite nicely, but it’s being hidden in the GDP report because of a big surge in imports from abroad,” Wesbury said.

He expects growth to pick up more in the fourth quarter.

But other economists were less optimistic.

Ken Mayland, president of ClearView Economics, said the economy is “just muddling along.”

“I think it is going to be hard to break out of this sluggish-growth rut,” he said.

A new AP economic survey estimates fourth-quarter growth at 2.4 percent. If that’s the case, the economy will end 2010 on weaker footing than it started.

Meanwhile, the Fed is all but certain to launch a new aid program next week — buying government bonds again in a bid to make loans cheaper, spur people to spend more and guard against a dangerous deflationary spiral.

Scott Sumner, an economics professor at Bentley College, said as much as anything, the Fed’s goal is to shape expectations of the economy’s direction.

The Fed is “trying to create an impression in the markets that they won’t fall into the same [deflationary] trap as Japan in the 1990s,” Sumner told NPR.

Some fear stimulating inflation could work too well. If the economy picks up and the Fed doesn’t act quickly enough to put the brakes on, there’s the possibility of hyperinflation.

“But the Fed is quite confident that it can basically suck the money back out of the economy as soon as we get a real turnaround,” Sinclair said.



Flight delays cost travelers billions, study says

Air travelers already know the frustration of endlessly waiting for a plane to arrive or depart, but now a new study has put a dollar amount on the economic toll of the problem and it’s big.

Flight delays cost the nation $32.9 billion in 2007, with passengers on the hook for more than half of that amount, according to research released by the University of California-Berkeley’s Institute of Transportation Studies.

“This is the most comprehensive study done to date analyzing the monetary cost of airline flight delays,” said Mark Hansen, the lead researcher, in a statement.

“Flight delay is a serious and widespread problem that places a significant strain on the U.S. air travel system and its customers.”

Here is how the figure breaks down: Air travelers paid $16.7 billion in lost time due to delayed flights, flight cancellations and missed connections, plus expenses such as food and accommodations.

The researchers also recognized that many people spend extra time away from home because they fear and expect flight delays.

“If I have a meeting that begins at 10 a.m. Tuesday in Washington, I would likely fly out from Boston on Monday night rather than early on Tuesday, just to ensure that I arrive on time,” said Cynthia Barnhart, one of the co-authors, in a statement.

Meanwhile, flight delays forced airlines to pay $8.3 billion in increased expenses for crew, fuel and maintenance, according to the study. The carriers also saw almost $4 billion in lost demand due to passengers who avoided air travel because of delays.

The country’s economy as a whole suffered, too, the study found. Since air travel inefficiencies raise the cost of doing business for companies, the U.S. gross domestic product was reduced by $4 billion in 2007, the study said.

The Federal Aviation Administration commissioned the research.

The study authors note that many flight delays, such as those caused by mechanical problems or severe weather, are unavoidable. But they also point out the problem of airspace congestion.

“The results of this study suggest that policies and mechanisms that discourage overscheduling should be considered,” the authors note.

So far this year, more than 18 percent of flights have arrived or departed at least 15 minutes late, according to the Bureau of Transportation Statistics.