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Volume 15, Issue 2 (Aug 2013)

Issues

Driving support: workers, PACs, and congressional support of the auto industry1)

Ryan T. Moore
  • Assistant Professor, Department of Political Science, Washington University in St. Louis, 241 Seigle Hall, Campus Box 1063, One Brookings Drive, St. Louis, MO 63130, USA, http://ryantmoore.com
/ Eleanor Neff Powell
  • Corresponding author
  • Assistant Professor, Department of Political Science and Institution for Social and Policy Studies, Yale University, 77 Prospect Street, New Haven, CT 06511, USA, http://www.eleanorneffpowell.com
  • Email:
/ Andrew Reeves
  • Assistant Professor, Department of Political Science, Washington University in St. Louis, 241 Seigle Hall, Campus Box 1063, One Brookings Drive, St. Louis, MO 63130, USA, http://andrewreeves.org
Published Online: 2013-06-12 | DOI: https://doi.org/10.1515/bap-2013-0005

Abstract

In 2008 and 2009, the House of Representatives directed billions of dollars to the auto industry by passing a bailout and the “cash for clunkers” program. Moving beyond corporate influence via campaign contributions, we demonstrate that the presence of auto workers in a district strongly predicts legislative support for both bills. In addition to this critical legislation, we also analyze over 250 bills on which the auto industry either lobbied or took a public position. We find no patterns relating a district’s workers or corporate campaign contributions to these votes on broader legislation where other groups, such as environmental advocates or labor unions, are at the table. Instead, the auto industry garners consistent support only on quasi-private, particularistic legislation. Thus, we contend that on particularistic legislation the presence of workers (not just campaign contributions) drives legislative support; however, when legislators expand the scope of conflict, the influence of a single industry is attentuated by other interests.

This article offers supplementary material which is provided at the end of the article.

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About the article

Corresponding author: Eleanor Neff Powell, Assistant Professor, Department of Political Science and Institution for Social and Policy Studies, Yale University, 77 Prospect Street, New Haven, CT 06511, USA, http://www.eleanorneffpowell.com


Published Online: 2013-06-12

Published in Print: 2013-08-01


In addition to the auto bailout and cash for clunkers, in September, the House and Senate passed a “stopgap spending measure” to appropriate $25 billion in loans already authorized by a 2007 law (Schatz 2008).

In August, Congress passed and the President signed HR 3435, which authorized an additional $2 billion for the cash for clunkers program.

Rep. Gary Ackerman (D-New York): “There is a delicious irony in seeing private luxury jets flying into Washington, DC, and people coming off of them with tin cups in their hand, saying that they’re going to be trimming down and streamlining their businesses” (Levs 2008).

Interestingly, Paul Ryan, a well-known conservative, opposed both cash for clunkers and an earlier act in September authorizing direct loans despite having three auto factories in his district. Ryan, who receives among the most PAC money from the Big Three, did support the auto bailout that December.

For a further discussion of this point, see Gimpel, Lee and Parrot (2012) who document how different industries display significant variation in their political behaviors and leanings.

Constituency and corporate PACs are, of course, not the only factors that influence members of Congress. Numerous studies, mostly examining roll call votes, have examined the magnitude of influence of party, ideology, and constituency (Poole and Rosenthal 2000; Cox and McCubbins 1993, 2007; Krehbiel 1991, 1993, 1998; McCarty, Poole, and Rosenthal 2006). For an overview of other factors see Clausen (1973).

For an example of a study that does consider the presence industry, see Burden (2007)’s examination of the influence of tobacco industry presence in a district on members’ voting on a measure to cut tobacco related subsidies (House Amendment 1153).

Central to this argument is the nature of geographic representation in American electoral rules. Single member congressional districts mean that the location of factories within particular congressional districts may be especially influential because of the concentration of interest. For further research on the legislative consequences of geographic representation, see Lee (2003).

Contributions by political action committees appear to be self-serving, in that industries that receive greater benefits from the federal government make more political action committee contributions (Grier, Munger, and Roberts 1994). Of course, there remain industry-wide collective action problems if a given piece of legislation is non-rival and non-exclusive. These industry-wide collective action problems may in part explain why the aggregate contribution levels – despite their rapidly increasing size – are still dwarfed by the financial benefits industries receive from federal legislation. Milyo, Primo, and Groeclose (2000) strongly downplay the potential influence of PAC contributions by comparing the low dollar values of corporate PAC campaign contributions to the amount firms spend on philanthropy and lobbying expenses, all of which are dwarfed by the net sales of the company.

There are a few notable exceptions that provide evidence that PAC contributions are a function of geographic ties to the constituency. Wright (1989) demonstrates that interest groups rarely contribute to members who have no interest group presence within the district; in essence, geographic ties of interest groups are vital to contribution decisions. Echoing that finding, Stratmann (1992) shows that PACs give more money to members whose constituency demographics suggest they are likely to be undecided on the legislation (without demographic groups strongly supportive or opposed to the legislation), arguing that members with constituencies with like-minded interests to the PAC will already be supportive of the industry’s interests. Relatedly, Fleisher (1993) finds that members with weaker ideological pre-dispositions on defense are more susceptible to the influence of PAC contributions from defense contractors on defense-centered roll call votes.

Studies of another industry, financial services, also show marked signs of influence. Stratmann (2002) examines financial services legislation, and finds that changes in contribution levels are associated with changes in roll call voting behavior, and further that less senior members are most responsive to contribution changes, perhaps because they have a less established voting history, and are thus less vulnerable to charges of flip-flopping. Further, he notes the often-overlooked importance of contributions from competing groups, which can offset the impact of contributions from supportive groups. Thornburg and Roberts (2008)’s study of the financial industry’s attempt to influence the Sarbanes-Oxley legislation found that industry-based political action contributions impacted roll call voting in the House vote but not the Senate vote. Further, these contributions mostly went to conservative pro-business members.

Causal identification challenges studies of money in politics, as it may be difficult to discern whether contributions are influencing votes or votes are influencing contributions. In this vein, studies argue both that contract awards yield subsequent contributions (Grier, Munger, and Roberts 1994), as well as that contributions are a means of securing contracts (Witko 2006). At least one recent observational research design tackles these issues directly (Conley and McCabe 2012).

The Census reports employment statistics using the North American Industry Classification System (NAICS). Our definition of auto workers includes establishments reported under the following categories: motor vehicle manufacturing (3361), motor vehicle body and trailer manufacturing (3362), and motor vehicle parts manufacturing (3363). Other studies use a coarser classification of workers. For instance, Kroszner and Stratmann (1988) uses three-digit NAICS codes to classify the influence of the financial services on Congress; however, this is not feasible for this analysis since the relevant three digit code includes workers from industries not related to automobile manufacturing.

Slightly finer gradations are available at the top of the scale. Other bins count the establishments with 1000–1499, 1500–2499, 2500–4999, and at least 5000 employees.

Specifically, we define the number of establishments of a given size in a district as the sum of the number of establishments of that size in the counties partially or wholly included in the district, each weighted by the fraction of its county’s population within that district. For example, suppose a county has one 10–19 worker establishment and its population is divided between two congressional districts, one with 75% of the population and the other with 25%. Then, the first district would get 0.75 of a 10–19 worker establishment and the second would get 0.25 of a 10–19 worker establishment.

If industry presence in nearby districts that share a county actually has exerts no pressure on a member, we could underestimate the association between workers and roll calls. Similarly, if industry presence in nearby districts that do not share a county actually does exert pressure, we may underestimate the association.

Local jobs are an important electoral and legislative consideration for representatives; this includes governmental as well as private industry jobs. During an earlier era of federal budget challenges, military base closures played a similar political role to auto factory jobs during the Great Recession. The Base Realignment and Closure (BRAC) system attempted to depoliticize the closure process, anticipating that representatives would suffer from perceptions that they did not stop closures that they could have (Goren 2003).

These were Alabama, Arkansas, California, Delaware, Florida, Georgia, Massachusetts, Michigan, Missouri, North Carolina, New York, Ohio, Oregon, Tennessee, Texas, Utah, and Wisconsin.

In the Supplementary Materials, we also consider contributions from groups representing foreign automaker interests (the Automotive Free International Trade PAC, AFIT-PAC), auto dealers (both domestic and foreign), a minor automotive PAC representing regional dealership alliances and parts suppliers, and the total campaign contributions by all unions representing transit workers.

Such high levels of support make it likely that an attempt to find an association between industry presence and votes for Democrats will confront ceiling effects. Despite this, we do find an association.

These two categories may not capture all legislation that is salient to the industry. For instance, on some bills there may be reasons to remain publicly silent on legislation for which the industry is truly concerned. We try to address these concerns by providing two measures of salience (one narrow, one broad). We discuss alternative opportunities for influence beyond legislative voting in our concluding section.

See http://maplight.org/about, for additional details (accessed April 4, 2012).

We select auto industry groups as classified by the Center for Responsive Politics at http://www.opensecrets.org/downloads/crp/CRP_Categories.txt. These groups are automotive, misc (T2000), auto manufacturers (T2100), truck / automotive parts and accessories (T2200), auto dealers (T2300, T2310), auto repair (T2400), car rental agencies (T2500), and automotive unions (LM150). This list yields the following groups: The Alliance of Automobile Manufacturers, Tire Industry Association, National Automobile Dealers Association, Automotives Recyclers Association, Society of Collision Repair Specialists, General Motors, Ford Motor Company, Motor and Equipment Manufacturers Association, Automotive Trade Policy Council, American International Automobile Dealers, ArvinMeritor, Mitsubishi Electric, Chrysler, Frankel Automotive Group, Johnson Controls, Connecticut Automotive Retailers Association, Automotive Parts Remanufacturers Association, Automotive Warehouse Distributors Association, Mazda North American Operations, Auto International Association, Specialty Equipment Market Association, Automotive Aftermarket Industry Association, Automotive Engine Rebuilders Association, International Metals & Energy Technology Ltd, Association of International Automobile Manufacturers, Advance Auto Parts, Alliance of Automotive Service Providers, AutoZone, Blue Magic Inc., CARQUEST Auto Parts, Coalition for Auto Repair Equality, Jiffy Lube, Midas, Meineke Incorporated, NAPA Auto Parts, O’Reilly Auto Parts, Pep Boys, Penray, Strauss Discount Auto, Valvoline, California New Car Dealers Association, Automotive Service Association, American International Automobile Dealers Association, International Union, United Automobile, and Aerospace and Agricultural Implement Workers of America.

Many of the bills that the auto industry took positions on never saw a vote on final passage. Another approach would be to consider bill sponsorship or to consider who moves to defeat bills before they come to a final vote. We address some of these possibilities in the discussion.

That no negative positions were expressed by the industry in the entire sample is seemingly suggestive of the industry’s influence at even earlier stages in the legislative process and worthy of further study in future research.

We replicate our analysis from the previous section on the bills listed in Table 1 and provide summary tables in the Supplementary Materials.

AFL-CIO contributions are more regularly related to these pieces of legislation, with at least one statistically significant coefficient in seven of the eight pieces of legislation.

For an example of the data that the Center for Responsive Politics provides, see http://www.opensecrets.org/lobby/clientbills.php?id=D000047015 year=2010.

Puente (2012) examines one potential mechanism of corporate political influence on the administration of the TARP program, and, consistent with our results, finds no political effects.

The Center for Responsive Politics records that the transportation sector has given $26 million in PAC contributions thus far in the 2012 cycle, while finance, insurance, and real estate has contributed $208 million.

See Hall and Wayman (1990), Hall (1996).

Thirty-eight members of Congress sponsored bills advocated by the industry during this period. Simple bivariate comparisons of campaign contributions and sponsorship, as well as industry presence and sponsorship, show a clear relationship. Pearson χ2 tests on both bivariate relationships are significant at the 0.05 level.

The replication archive is available as Moore, Powell, and Reeves (2013). Supplementary materials are available on the journal’s and authors’ web pages.


Citation Information: Business and Politics, ISSN (Online) 1469-3569, ISSN (Print) 1369-5258, DOI: https://doi.org/10.1515/bap-2013-0005. Export Citation

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  • Replication data and code for this article are available at http://hdl.handle.net/1902.1/21320

    posted by: Ryan Moore on 2013-09-12 06:38 AM (America/New_York)