
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, October 4, 1994                   TAG: 9410040084
SECTION: EDITORIAL                    PAGE: A6   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

SUBSIDY CENTRAL

CAMPAIGN-FINANCE reform has been killed, for this year anyway, by Republicans in the Senate. Grief and outrage may be tempered with the thought that such reform, while certainly helpful and necessary, would not in itself have been sufficient to change the way Washington works.

Jonathan Rauch, author of "Demosclerosis: The Silent Killer of American Government," made the point well in a commentary piece in the New York Times last week. Gifts and contributions to congressmen, he observed, are only symptomatic of a deeper disease: the proliferation of special-interest lobbies. Ten more are born every week. Their disparate efforts, in the aggregate, have rendered the country largely ungovernable.

So, asks Rauch, why not aim at the lobbies themselves, in addition to their interaction with Congress? Lobbies exist and have multiplied not simply because of opportunity (Congress members with outstretched hands), but also because of motive. The lobbies have a stake in what happens in Washington. Too large a stake.

Rauch notes that after the transportation industry was deregulated in the 1970s, the number of airline and trucking groups in Washington declined sharply. In this experience lies a policy prescription.

Yes, reform campaign-finance laws. But also follow the conservatives' admonition to cut government's entangling micromanagement of various segments of the economy. That way, the payoff from investing in lobbying and political action committees would have to diminish.

Tax reform in 1986 reduced the number of special-interest loopholes in the tax code, but a lot more could be done in this regard. Also, on top of tax breaks, the government offers outright subsidies to numerous special interests, from corporate agriculture to well-connected oil drillers.

These not only attract a feeding frenzy of lobbyists. They also add to federal debt, decrease the incentives for subsidized industries to innovate and become more productive, and distort natural market forces and competitive allocation of capital. More often than not, subsidies and tax breaks are distributed less for social or economic purposes than in accordance with the relative political clout of the lobbies pushing for them. That's as bad for the economy as it is for government.

Trade protections are another kind of offender. (Does anyone believe the textile industry or its representative, Sen. Ernest Hollings, is looking out for the good of the country in their effort to block congressional approval of a new global trade agreement?) Every move toward freer trade will also help reduce the special interests' strangehold.

The problem, of course, is that every subsidy, tax break and trade barrier is fiercely defended by the beneficiaries, who have grown more sophisticated over the years in influencing (and corrupting) legislators. "Demosclerosis" is so advanced that President Clinton may need to appoint a task force, modeled on the military-base-closing commission, to identify and recommend cuts in these wasteful and harmful favors.

The president could then submit the reform package to Congress for an up-or-down vote without amendment. That might afford some protection from lobbyists intent on - and, as the record would suggest, pretty darned successful at - keeping government a mess.

by CNB