Corporate-Backed Blue Dogs Threaten Democrats’ Budget Plan

Facing health care and climate crises, a group of six conservative House Democrats are seeking to pump the brakes on the largest federal investments in decades.

Corporate-Backed Blue Dogs Threaten Democrats’ Budget Plan
Rep. Josh Gottheimer (D-N.J.), a member of the Blue Dog Coalition, holds a news conference outside the U.S. Capitol on December 3, 2020.

This weekend, a group of moderate House Democrats circulated a letter to Speaker Nancy Pelosi expressing concerns about the budget resolution including instructions for Congress to pass a new spending and taxation package under expedited reconciliation rules.

According to CNN’s Manu Raju, the six Democrats attached to the letter are Reps. Ed Case, Jared Golden, Vicente Gonzalez, Josh Gottheimer, Kurt Schrader, and Filemon Vela. Citing worries over the national debt, the letter calls for a “detailed review of spending levels and revenue raisers” in the $3.5 trillion budget resolution after praising the smaller bipartisan infrastructure framework of $550 billion in new spending over five years.

The budget resolution calls for a reconciliation package spending billions on universal pre-K, tuition-free community college, immigration reform, paid family leave, investments in clean energy technology and environmental justice programs, allowing wealthy taxpayers who itemize to pay fewer federal taxes by deducting state and local taxes, and much more. It would be financed through a mix of tax increases, health care savings, and anticipated long-term economic growth.

Democratic leaders have pledged to pass the reconciliation package and infrastructure bill in tandem. The sequence of the votes has yet to be scheduled, but Congressional Progressive Caucus leader Rep. Pramila Jayapal (D-Was.) said on July 28 that progressives may not vote for the infrastructure bill unless the reconciliation package is passed first. The moderate House Democrats appear to be asking for the budget resolution to have a more drawn-out debate after the infrastructure package has passed, though their letter does not say explicitly they will withhold their votes to force that order of operations. [Update, Friday Aug. 13: in a new version of the letter released this morning, the group of nine moderate House Democrats did make explicit their demand: “We will not consider voting for a budget resolution until the bipartisan Infrastructure Investment and Jobs Act passes the House and is signed into law.” More coverage of the nine letter signers can be found here.] The Democrats have a slim House majority and can only afford to lose a total of three votes on the budget bill, assuming all Republicans oppose it.

Of the six Democrats signing the letter seeking to slow the budget resolution, five are currently members of the conservative Blue Dog Coalition, including its co-chair Ed Case of Hawaii. The sixth rep, Vela, joined the Blue Dogs in 2015 and was a member last year in the previous Congress. A dozen of the Blue Dogs’ 19 members also belong to the centrist and bipartisan Problem Solvers Caucus that endorsed the infrastructure package, including Gottheimer, the Problem Solvers’ Democratic co-chair, and letter signers Gonzalez, Golden, and Schrader. 

Oregon Rep. Schrader, who already planned to vote against the budget resolution out of opposition to its spending levels over 10 years, told Roll Call on Aug. 2 that most Blue Dogs would object to voting on the budget resolution that enables the larger reconciliation package without also passing the smaller bipartisan infrastructure bill, setting up a showdown with leadership over the timing of the votes.

Gottheimer and Schrader are among the top 20 House Democratic recipients of PAC money in the 2020 election cycle, according to OpenSecrets. The third-term New Jersey Rep. Gottheimer pulled in over $1.3 million from business PACs last cycle, and the fifth-term Oregon Rep. Schrader brought in nearly $1.4 million from business PACs, making up 93% of his total haul from PACs. According to OpenSecrets, only about 2% of Gottheimer’s contributions last cycle came from small donors of $200 and under, and under 2% came from small donors for Schrader. 

After an unsuccessful U.S. Senate bid in 2012, Blue Dog Co-Chair Case won a 2018 primary for Hawaii’s First Congressional District in 2018 with 40% of the vote, and ran unopposed in the primary last year. Two-thirds of Case’s 2020 campaign funding came from PACs, with over 74% of that amount coming from PACs affiliated with corporations and business interests. He also got maximum PAC contributions of $10,000 from the Blue Dog PAC and the PAC of the moderate New Democratic Coalition.

Third-term Rep. Gonzalez, from a district in South Texas, raised nearly $1 million from PACs last cycle, with over 83% coming from business interests. The oil and gas industry has been his top career donor, giving him nearly a quarter of a million dollars, with Chevron’s PAC contributing $21,000 since 2015. Gonzalez founded the Congressional Oil & Gas Caucus. Only about one percent of his donations came from small donors last cycle.

Second-term Rep. Golden, representing a large rural district encompassing Northern Maine, has also been supported by Democratic and liberal groups in his races, including over $40,000 from the group End Citizens United and nearly $30,000 from Swing Left. He received nearly $55,000 from PACs labeled as business PACs by OpenSecrets despite pledging not to take money from corporate PACs. Golden took contributions from multiple trade associations’ PACs, which represent their corporate members but don’t mark themselves as business PACs with the Federal Elections Commission.  

A member of the Blue Dog Coalition in the previous 116th Congress, fifth-term Rep. Vela, representing an area of East Texas along the Gulf Coast, joined the Congressional Oil and Gas Caucus in 2017. In the 2020 cycle, Vela brought in over 85% of his PAC contributions from business PACs and less than one-half of one percent from small donors, according to OpenSecrets.

Schrader is chair of the Blue Dog PAC, which raises millions of dollars every election cycle from corporate PACs, often in $10,000 maximum contributions, as well as from donations of $2,000 and above from employees of prominent corporate lobbying firms like consultancy Forbes Tate and law firm Akin Gump.

In the 2020 election cycle, the Blue Dog PAC raised over $2.5 million, spending over $2.3 million that included campaign donations of $322,500 to three dozen Democratic House candidates in batches of about $10,000 apiece, according to OpenSecrets

In the first six months of 2021, the Blue Dog PAC raised a bit over $1 million, according to its mid-year FEC report. Nearly 90% of the haul came from almost 200 donations from corporate PACs or business group PACs, averaging close to $5,000. The Blue Dog PAC’s top donors so far, the handful giving $10,000 each, were the PACs of Anheuser-Busch, FedEx, government contractor Flir Systems, Principal Life Insurance Company, and the United Mine Workers.

Many of the corporate PAC donors in the first half of this year to the Blue Dogs PAC are members of trade groups like PhRMA, the American Chemistry Council, and the U.S. Chamber of Commerce that have lobbied against provisions included in the budget reconciliation package released today and led by Senate Budget Chair Bernie Sanders (I-Vt.). At the same time, many of the business interests support the lesser level of investment included in the bipartisan infrastructure package, which Senate negotiators claimed would not be paid for with higher taxes on corporations—though budget accounting gimmicks remain in play, according to the nonpartisan Committee for a Responsible Federal Budget. 

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