Thursday, May 28, 2009

The Democrats New Power Base: Industry

The Democratic-Industrial Complex
Over the past few weeks, President Obama and Congressional Democrats have reached a series of high-profile agreements with key industries that have usually aligned with the GOP. Automobile manufacturers, the health insurance industry, medical professionals, pharmaceutical executives, and electric utilities - not traditional Democratic allies - all have joined, to varying extent, in the big policy initiatives of Obama's second hundred days.


As Democratic lobbyist Steve Elmendorf put it, a closer alliance between Democrats and these industries "means potentially that [the Republicans'] time in the wilderness will be longer because these groups will not help them to get back into the majority."


A similar trajectory is evident at the presidential level. In 2004, Democratic nominee John Kerry received less than 40 percent of the health care industry's contributions to the party nominees; in 2008, Barack Obama collected 72 percent of the industry's donations. Kerry took in less than a quarter of the auto manufacturers' donations; Obama received 62 percent. And Kerry's campaign received only 17 percent of contributions from electric utilities; Obama captured 56 percent of their donations last year.

Though they have started to neutralize the GOP's financial advantage among these groups, Democrats may still have room to grow. The yardstick might be highs that Republican fundraisers enjoyed during their time in the majority. In 1996, the Republicans' first election with House and Senate majorities since 1954, they collected almost 63 percent of health care's total donations. Pharmaceutical interests directed more than two-thirds of their contributions to Republicans that year. The same story played out in the auto and energy sectors. Auto manufacturers gave 68 percent of their money to the GOP in 1996. And Republicans received 69 percent of utilities' donations en route to collecting 76 percent of the energy sector's total contributions.

Early numbers from 2010 election fundraising posted by the Center suggest that Congressional Democrats are approaching and even exceeding the donation shares that Republicans once experienced. So far in this cycle, Democrats are receiving about 66 percent of both the $3.5 million donated by health care companies and the $1.1 million donated by utilities. (Automakers have made negligible contributions to the 2010 race.) Democrats have even pulled ahead of Republican candidates in donations from the overall energy sector, defying conventional wisdom by raising $1.2 million from big energy so far, compared to $850,000 for Republicans. Even the oil and gas industry is hedging its bets, directing 43 per cent of its contributions so far toward Democrats.

With industry, Democrats are making the argument that they are better off working with the majority to shape legislation than joining Republicans in adamant opposition to Obama's plans. The message to business from Congressional Democrats, Elmendorf says, is that if they don't work with the party "it is going to be a vastly different bill; if you stay in the tent, we are going to get a more moderate bill." [...]

These groups are favoring Democrats for the moment, because they saw this sweeping change coming, and they are trying to protect themselves and their interests by co-operating. If the Dems squeeze them too hard though, they could easily switch to the Republicans again. The industries have always tried to play the two sides off against each other, to create the best business climate for themselves. It's the ebb and flow of politics. The Dems have the advantage for the time being. Will they be able to hold it, and for how long, is the question.

Speaking of complexes, did you know that congress was included in Ike's original speech about the military-industrial complex? It makes sense:

Ike's “military-industrial-congressional complex"

And now congress is controlled by Democrats. Neither party seems to do particularly well when they have so much control. We need more balance. It's the point of having two major parties; to balance each others extremes so we don't go off the rails.

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