The Congressional Budget Office estimates that total spending on health care will increase from 16% of gross domestic product (GDP) in 2007 to 25% in 2025 even as almost 15% of Americans lack health insurance. The debate surrounding health care financing and access has been around for almost 75 years since the Social Security Act was passed in 1935, but the issue of health care reform received more attention as rising health care costs and limited access to health care services became a campaign issue and later a failed domestic policy objective during the Clinton administration. The current system of health care is not sustainable. Reform of the health care system will create winners and losers, particularly among consumers, taxpayers, and members of the health care industry. Unlike the average consumer and taxpayer, however, members of the health care industry may have the ability to influence the outcomes of health care legislation through political action committee contributions.
This paper explores the relationship between House committee membership and campaign contributions from political action committees (PACs) representing specific sectors of the health care industry over three election cycles, 1997-1998, 1999-2000, and 2001-2002. Although there have been a few papers dealing with PAC contributions from the American Medical Association (AMA) and voting on particular pieces of legislation affecting the health industry and one paper dealing with PAC contributions from sectors of the health industry and voting on medical liability legislation, the role of committee membership and PAC contributions has not been examined with respect to the health industry. Economic theory suggests that individual committees have more power than the entire Congress over their areas of jurisdiction. Individual legislators, recognizing the power of committees, seek legislative assignments that benefit their constituents' interest and the congressperson's own chance of reelection. Bennett and Loucks (1994, 1996, 2008) provide evidence that committee membership is one of the most important determinants of PAC contributions from different sectors of the financial services industry to members of the House of Representatives. In this paper, we extend that analysis to the health industry. In particular, we examine the relationship between PAC contributions from four sectors of the health industry to individual legislators over the 1998-2002 election cycles using a sample selection model. We expect to find that membership on committees that have significant oversight responsibilities for the health care industry, the Appropriations Committee, the Committee on Energy and Commerce, the Veterans' Affairs Committee, and the Committee on Ways and Means, is positively and significantly related to contributions from PACs representing different sectors of the health care industry. We expect that committee membership matters to health industry PACs, and health industry PACs will contribute disproportionately to those legislators who sit on committee with oversight responsibilities for the health care industry.
II. LITERATURE REVIEW
As discussed in Weingast and Moran (1983) and Weingast and Marshall (1988), individual committees have more power than the entire Congress over their areas of jurisdiction. As noted by Grier and Munger (1991, p. 25), "committees in Congress, and particularly in the House of Representatives, possess disproportionate power over the policy areas in their respective jurisdictions, have the right to hold hearings, and recommend budget allocations for the bureaus in their district." Committee members determine the nature and content of any legislation that reaches the floor and have the power to prevent legislation from ever reaching the floor. Krozner and Stratmann (2000) also note that the relationship between PACs and congressional standing committee members may be particularly strong because the committee structure gives PACs the ability to build long-term relationships with members of committees because of the near permanent nature of standing committees and the ability of legislators to keep their committee assignments for as long as they are in the House (p. …