al music) - step right up, folks, here's the answer to your problems. it's terrific, it's tremendous! - they are so obsessed with telling us the things that they're going to do when they're elected. so bernie sanders talks about single-payer healthcare. conservatives might talk about cutting regulations or whatever it is that they think is the thing that their base really wants to hear. but i think the base increasingly recognizes that all of this is just fantasy.

the idea that our government can actually do anything anymore is something very few of us really believe. (papers whooshing) - one big problem is we don't have time to read the bills the way they've set up the system. we're supposed to have a rule here, which they call the three-day rule, but they don't mean an actual 72 hours, they just mean if you introduce it at 11:59 p.m. on tuesday, you can vote after midnight on thursday. so, basically, it's 24 hours and a little bit. what they can do is introduce a "shell bill" late on tuesday night. insert a totally different bill on thursday morning

through some amendment. so they change the bill completely. they could insert thousands of pages that were not introduced on tuesday night. they can introduce those thousands of pages on thursday morning. and they will tell you that you had three days to read the bill even though it is a totally different bill and you didn't even have three days. that's what goes on around here. - the system is corrupt. members of congress are not corrupt, for the most part. so we have to make that distinction and then we have to set about changing those laws so that corruption is no longer legal. but today, corruption is legal in america. - if people feel like they're playing by the rules and not getting ahead, then capitalism isn't doing what it's supposed to do, because it's supposed to be rewarding the value that you put in the economy. we have in so many different ways, socialized the downside and individualized the upside. and that is the opposite of how the rules of the game

are supposed to work. - this is not a story about the rich versus the poor. it looks like that story, but it's actually a story of how the system is built. - polls show that 85% of americans think that our system ought to be either trashed all together and rebuilt from the ground up or at least substantially revised. - [narrator] in recent years, political candidates from both major parties have picked up on this widespread dissatisfaction and the influence of special interests into their campaign messaging. - we have to stop the endless flow of secret, unaccountable money that is distorting our elections. - these interests have rigged our political and economic system for their exclusive benefit. (soft music)

- [narrator] so if 85% or more of americans want to see major reforms to a system they don't perceive as working for them, and the politicians all say that restructuring that system is among their top priorities, why haven't we seen meaningful change in this century? and if we can't count on candidates from either major party to change this system, what other options do we have? to answer any of this, we first have to understand the shape of the problem. although our political system was intended to serve the people broadly, there's now a cycle at work that enables corrupting influences to get what they want out of government. it begins with how political campaigns are funded. - crp is a nonpartisan nonprofit research group that tracks money in politics at the federal level. we work to expose money's influence, often undue influence over policy and politics. we developed a way to track the money

and to categorize it by industry and interest group. the biggest corporations that make political action committee contributions and significant contributions from individual executives give across the aisle. and very typically what we see is they're hedging their bets by giving nearly 50-50, or about 60-40 in favor of whichever party is in power. (soft, pulsating music) sure, many of them may know the candidate personally, but far more have never laid eyes on them and are giving because they want something in return. and that is a pattern that we've seen cycle after cycle for decades. - boss tweed used to say, "i don't care who does the electing, "as long as i get to do the nominating." in the soviet union, there were many elections,

but to be able to run in those elections, you had to get the approval of the politburo. in iran, the guardian council, i think it's... 21 or 12. it's something, some tiny number like that, basically picks the candidates. we americans look at those examples and we say, "yes, obviously, that's not a democracy." well, if those things are not democracy, because a tiny unrepresentative few have effectively selected the candidates who get to run, then we don't have a democracy today because of what we can call the green primary. - funding is its own primary, we have the voting system where people vote, but in the first stage to that there is a money primary that determines which candidates are allowed to run. - right now members of congress and candidates for congress spend anywhere between 30 and 70% of their time raising money. from no more than 100,000 people are they trying to raise this money. those 100,000 people have a very distinct set of interests.

and the only way that you get to raise the money necessary to be able to run is if you make them happy. they are the boss tweeds of the 21st century. - there are always gonna be those who are seeking to game the system or shape policies. that's the nature of politics and long has been, but the money has grown tremendously. (soft music) - every member will say, "well, i'm acting in the public interest." but if you look at their campaign contributions, they're seeing people who've given them campaign contributions and not seeing others from good government groups or other groups that haven't given them money. - to have a meaningful vote in our system

means to have money. if you have capital, you have a meaningful say in the political process. - i think that the critical point to recognize in diagnosing the problem with this democracy, is the way in which it renders us as citizens unequal. in the world where members of congress spend 30 to 70% of their time raising money from 100,000 people, those 100,000 people are paying the piper, they get to call the tune. and the piper is dependent, congress is dependent on those 100,000 people. and that dependency is the inequality because that dependency means those 100,000 matter much more than you or i do. and that difference is a betrayal of the single most important ideal behind the idea of a representative democracy that we are equally represented. - there's always going to be fundraising going on.

the idea that members of congress are spending so much of their time here doing it, is disgusting in my opinion, and not the way congress should work. - there's no such thing as not campaigning. campaigns start the moment an election is finished. - as a member of congress, or as a candidate for congress can't have enough money anymore. there isn't a safe amount. (upbeat music) - this is again, another really important difference between congress today and congress 30 years ago, because today, there's a perpetual campaign. it used to be that congress would campaign for six months out of two years, and for a year and a half, they would govern. there's no governing anymore because they're constantly in this war mode in order to trigger the resources they need to fund their campaigns. - many of them go saying, "i'm gonna do the right thing, "even if i lose this seat two years from now."

and then they get into the system and they find that they're not gonna be on the right committees. they're not going to be in path to lead a committee. - (gavel bangs) the senate will come to order. - to receive a particular committee spot, you have to raise a certain amount of money for the party. now, that seems like it, first of all, it's totally unethical and seems like it should be illegal. - pledge allegiance to the flag of the united states of america. - we've seen more and more information leak out that is supposed to be kept confidential about how much time the parties expect their members to attribute to fundraising. - your job, new member of congress, is to raise $18,000 a day. - and what we've seen over the last several years is that they are expected to spend four or five hours a day, on average, day after day, year after year. - the first week i was down here, we were having a committee hearing in education.

and my chief of staff at that time came in and said, "you have to leave," and i said, "where do i have to go?" and she goes, "you have to go make phone calls." - i've seen members of congress stand up at conference meetings, telling leadership that instead of wasting our time on a debate over legislative proposals, we should be out fundraising. - you're presented with their biography. "so please call john, he's married to sally, "his daughter, emma just graduated from high school. "they gave $18,000 last year to different candidates, "they can give you $1,000 dollars too if you ask them to." - that money, again isn't buying a vote, but the money can buy an open door, a returned phone call, access. all total they spent about $6.5 billion in the last election cycle. and that's in addition to the 3 1/2 billion spent each year on lobbying. so that money represents kinda both sides of the influence buying coin. - [narrator] we've all heard of lobbying, but often don't understand how it works.

at its best, it's a perfectly legitimate way for industries and individuals to communicate directly with the government about the impact and consequences of government policy. at its worst, it's a mechanism for legalizing bribery. a member of congress won't do something you want simply because you've given them a campaign contribution. that would be bribery. however, when that member of congress is approached by a lobbyist who says they're representing you, then the member of congress will be very interested in what that lobbyist has to say. because the member of congress is dependent upon campaign funding in order to get reelected, and you have provided it, and through your lobbyist, you can legally provide a great deal more funding if the member of congress is willing to play ball. - the right to seek redress of grievances is a constitutionally protected right. however, as it plays out in washington, it is a very expensive right to fulfill.

(soft music) - we have some estimates are 100,000 people in the advocacy business. most of it is unregulated so we don't really know what's going on. - we know that there is money spent beyond what gets reported, money that should be reported. - there are so many people breaking the law right now, and it's so obvious. enforcement is a major problem. the justice department has done nothing about it. there have only been eight prosecutions since 1938. - you know, lobbyists have been around forever. at certain moments in our history they've been ruthlessly corrupt. for much of the 20th century, lobbying lived increasingly as a kind of information profession,

the way lawyers before the supreme court are an information profession. lawyers appear before the supreme court, their job is just to give the court arguments and information about how the court should decide cases. and that, for many lobbyists, is what they conceived of lobbing as, not before the supreme court but before congress. and in my view, that's perfectly fine. as long as that's the only thing they're doing providing information, i think there's relatively little harm that comes from it. well, the best lobbyist is always trying to figure out what does the congressman need? and i'm gonna give the congressman what he or she needs, because if i do, then the congressman is going to be more eager to give me what i need. well, if all the congressman needs is information, then i'm gonna provide information. but if i see that the congressman is spending 30 to 70% of his time raising money, i'm gonna try to figure out how to solve that problem too. - you can't take a congressman to lunch, but you can take him to a fundraising lunch, and not only buy him that steak but give him $25,000 extra,

and call it a fundraiser and have all the same access and all the same interaction with that congressman. - policy is being discussed all day every day in washington that affects industries and interests across the board. so it's not surprising that those who can afford it have a lobbyist, sometimes an army of lobbyists. sometimes things crop up unexpectedly and suddenly, your industry is in the sights of a particular congressman or committee, and so they want to be able to respond to that, and also respond to the opportunities to maybe widen that tax benefit or loophole. - so there's a great market opportunity here as congress becomes more and more focused on this kind of crony-capitalism game. complicated regulations, complicated favors, complicated interactions with the marketplace. everybody increasingly believes they need to be in washington to be represented.

- the benefit to corporations of lobbyists has vastly increased. and if you could get it tilted a little bit in your business's favor, what's a few million dollars to hire a few lobbyists? you're getting back billions upon billions of dollars. and i think businesses started to look upon their washington offices as profit centers, as ways they could actually make money. - whether it was under reagan, or bush, or trump, they say they're trying to shrink government, but what they're really doing is just outsourcing it to contractors who then turn around and give political contributions. and those contractors become part of the ecology, part of the infrastructure of washington. - [narrator] the undue influence gained

through high-priced lobbying doesn't just pertain to obscure regulations with little bearing on the lives of ordinary americans. it's often the very reason that americans can't find representation on the issues most important to us, like housing, education, and especially healthcare. - healthcare is one of the most lobbied industry or one of them in the united states. when i was running medicare and medicaid, it was an everyday thing, a call from a congressional office or a lobbyist about don't touch this payment or don't cut back on something. there was one drug company, which made only one drug that had 200 lobbyists on capitol hill. i mean, they're really protecting their interests. at cms, my budget was $820 billion a year. i think it was the second largest federal agency, i believe. (upbeat music) we pay phenomenally more for healthcare procedures and tests, and equipment than than any other country,

sometimes by a factor of 10 or more. check out the cost of an mri or a ct scan or even a chest x-ray in america and then look at what it's like in other countries. it'll blow your mind. if you watch the rate of growth of the economy, and the rate of growth of healthcare, they've diverged now for 30 years. - [announcer] 62% of all personal bankruptcies were caused by medical bills, an astounding increase from just 8% a generation ago. ron and mary are among the 75% to declare bankruptcy despite having health insurance. - what pharmaceutical companies are doing in many cases is just pricing drugs at higher and higher levels just 'cause they can. it doesn't reflect the value of the drugs, it doesn't reflect their costs. - imagine for a moment popping a pill before bed that costs about $13.50. now, imagine waking up the next morning to find that the price of the exact same pill jumped to $750 overnight. when you bought this company, did you buy it because you knew that you could raise the price?

- we definitely planned on raising the price, that's for sure. - medicare is probably one of, if not the largest purchaser of drugs in the world. well, when you're a big bulk purchaser, you can negotiate prices, you've got leverage. the federal government should be able to negotiate the prices of drugs that it's purchasing for medicare beneficiaries. but the law forbids that, the reason for that is lobbying. (upbeat music) - many of these companies have 80%, 90% of their lobbyists coming from government. - so jack abramoff said, the single most powerful way

that he would influence policymakers was through the revolving door. - i would say or my staff would say to him or her at some point, "when you're done working on the hill, "we'd very much like you to consider coming to work for us." - float the idea of giving them a seven figure job after their public service was up. - a member of congress makes a little over $175,000. leadership gets a little bit more than that. you have junior staff, they're not paid very much. you've got a lot of interns that are doing professional work, not getting paid. many lobbyists are getting paid two, $3 million. - as soon as they expressed interest in such a job-- - that was it, we owned them. and what does that mean? every request from our office, every request of our clients, everything that we want, they're gonna do.

and not only that, they're gonna think of things we can't think of. - former members of congress often call themselves strategic advisors. i call them shadow lobbyists. tom daschle did this for years, he registered a year ago. (upbeat music) - it used to be that members of congress would serve for however long they served, and go to another office, governor or whatever, or just go home. now, it's almost as if this is a farm league to become a lobbyist. - they wanna work in congress for six or eight years and then switch out and make the real money. - congress has really been hollowed out in terms of its capability. staffers are younger, the turnover is higher.

there are fewer people on the committees where the real work gets done. you used to have a lot more staffers who knew how to write legislation. now you get people they just send a sketch of their ideas downtown and k street will write the bill for them. (upbeat music) - [narrator] so those hoping to achieve undue influence over policy open the door through campaign funding, then advance the policies they want enacted through lobbying. but how can they be sure of their return on investment? because unlimited federal debt means there's infinite room in the budget for everyone seeking special favor to get what they want. the provision in the medicare law that protects skyrocketing drug prices for pharmaceutical companies doesn't come at the cost of a new defense contract or customized tax rates for corporations who lobby for them. there's room in the budget for all of these. this element is crucial because it insulates voters from the cost of this corruption. taxes don't need to go up. spending on popular programs doesn't need to come down.

politically speaking, the cost of corruption can be kept off the books through the use of unlimited debt. - if you're only gonna pay for half of something and you're gonna finance the rest with government debt then every new spending program feels cheaper. - if there's no immediate cost to people, then there's an incentive here for members of congress to keep spending or keep creating new programs. - and so what the tax plan that we're putting forward does is it lowers rates. - "here's a tax cut. "here's a brand new sparkly program. "don't worry, it won't hurt the economy, "it will pay for itself." that's pretty tempting, so people are gonna respond to that. so you have political parties that are preferring that message, which is a lot easier. - we hope that there are democrats who are gonna be available to work with us to pass that kind of tax reform. - we have over a trillion dollars in tax breaks per year in the tax code. there's no oversight on them. very, very little checking of do they actually do what we want them to do, how are they working? are they overlapping with other programs?

(upbeat music) - we're involved in a very serious conflict all throughout the middle east. - bring them home! bring them home! - and it's not on most people's radar screens day-to-day. - office of management and budget estimated it would be something under $50 billion. - [interviewer] outside estimates say up to 300 billion.

- ah, baloney! - it's also part of the republicans' conscious strategy. they know people would not put up with it if they had to pay directly for it. (explosion as glass shatters) in every previous war, there was a tax increase. (rapid gunfire as people shout) certainly in world war ii, there were very heavy taxes, windfall profits taxes. the same in korea, in vietnam, there was a tax surcharge. we've had two tax cuts, now three, medicare part d, as we've greatly increased military spending. and as a result, we've had deficits. - right now, we have a situation where our national debt, which is at near record levels, is growing faster than the economy and it's projected to do so forever.

so a fiscally responsible government would be one where the debt is actually not growing faster than the economy it's coming down relative to the economy. - this is again, the biggest tax cut, biggest reform of all time. - we just had these huge unaffordable tax cuts at the end of last year. and then quickly the next vote that congress passed relative to that was, "let's wave paygo, "let's ignore the fact that it just added "$1.5 trillion to the national debt." (soft music) - that's your bill. - so they had something in place that would have forced them to offset the costs, but instead, they waived it, and there was barely any discussion about it. - people do not want to go on record voting for a budget that increases the deficit. there's always the temptation to kick the tough votes down the road, and instead engage in the permanent campaign.

- they've simply disregarded the budget process, even though it's theoretically part of the law. they simply ignore it and do whatever they damn well feel like. - i can't remember the last time we've passed one, maybe it was 2010? it's been a long time. (soft music) - we're supposed to pass budgets, but currently, we aren't passing them regularly. in fact, recent budgets that have been passed have even been produced as, essentially shell budgets where we're told not to even care about what the figures are, because we just need to pass a budget to use the reconciliation process, which is a legislative process to allow certain pieces of legislation to go through the senate with a simple majority rather than 60 votes.

the numbers in the budget we've been told to ignore the past few times. "don't even worry about them," they said. the only point of this process is to get us reconciliation. and currently, they're looking at not even doing a budget. - so what you get instead of a budget is an omnibus bill passed at the last minute at the end of the year, - you realize what they are passing is all of the money glommed together in one bill. no one will read the bill. no one knows what's in it. and there is no reform in the bill. that i can say with absolute certitude. no one will read it, no reform, nothing gets better, the debt will grow. - we're doing a pretty outstanding job of budgeting worse than just about any other country at this point. - [narrator] but how did america get to this place? didn't we have a balanced budget around the turn of the century? - one of the things that is clear to me is that the budget is the strategy.

the budget is the policy. i was in the navy for 35 years and i retired in 1996. i had been a bit contentious in the military because i wanted to make radical change and the pentagon is not a place that is very acclimated to radical change. we have great redundancies in the defense establishment, and i believe it's imperative that we deal with these redundancies. because i think taken together the simple elimination of the redundancies accounts for $40 billion a year in savings. with john shalikashvili, chairman of the joint chiefs, who was my partner in being the two senior people in the military, we had cut the defense budget from about $600 billion to 300 billion in 18 months. we don't need more money. we are satisfied, i am satisfied that there's enough money in the defense budget.

we don't need add-ons to the defense budget. you'll know that today it's 700 billion again. - [narrator] the importance of the budget is not a matter of ideology. the money america spends is a statement of its priorities. and because the budget is constrained by nothing, the people have lost any oversight or influence over where those priorities lie. - in the end, we say, "well, it's the republicans "or the democrats," they're both in my view responsible. - i particularly wanna thank, my friend, the democratic leader. - i'm pleased to announce that we have reached a two-year budget deal. - a lot of times the way they get past gridlock is by giving both sides what they want. "you wanted more spending here, we wanted more spending here "let's just have more spending for everyone." (bell dings) - i hope we can build on this bipartisan momentum and make 2018 a year of significant achievement for congress. - congressional leaders have done the hard work