Corporate PACs Reward Democrats Opposing Reconciliation Package

Nine Democrats threatening to sink the reconciliation bill pulled in more than $150,000 in PAC donations last month.

Corporate PACs Reward Democrats Opposing Reconciliation Package
Sen. Kyrsten Sinema (D-AZ) speaks briefly to reporters as she boards an elevator following votes at the U.S. Capitol on September 20, 2021.

This week, the U.S. House is planning to vote on the major Democratic reconciliation package, the Build Back Better Act, with trillions of dollars in spending over the next decade on social programs like child care and paid family leave, as well as investments in climate and more.

A group of about a dozen Democrats has threatened to vote against the bill. On August 12, Rep. Josh Gottheimer (D-N.J.) and eight other members of the Blue Dog Coalition wrote in a letter to Speaker Pelosi that they “would not consider” voting for the reconciliation bill unless an infrastructure bill is passed first, and even then they did not say they would support it. Keeping the infrastructure and reconciliation bills linked procedurally is seen by Democratic leaders as key for securing the votes needed to pass the reconciliation package. The conservative House Democrats are joined in their opposition to the plan by Democratic senators Joe Manchin and Kyrsten Sinema, who similarly have raised objections to the top-line spending amount of the reconciliation bill. 

Campaign finance documents show that nine of the Democrats threatening the bill were rewarded during the month of August with over $150,000 in donations from PACs, including many affiliated with business groups that are lobbying against it, according to watchdog group Accountable.US.

Since the Senate passed reconciliation instructions in August, corporate lobbying groups have been fighting back. The Business Roundtable, a lobbying group for big businesses whose membership is composed of prominent CEOs, launched what it described as “a significant, multifaceted campaign” in August against the bill’s revenue provisions. The campaign to stop the bill was spearheaded by the top-spending U.S. Chamber of Commerce, joined by the powerful PhRMA lobbying group and the “dark money” group American Action Network, which announced a $5 million ad campaign targeting Democrats describing the bill’s drug pricing proposals as a “socialist healthcare plan.”

Joe Manchin collected more than $45,000 in August from PACs, led by PAC donations of the legal maximum of $5,000 to his leadership PAC from International Paper Co. and Marathon Petroleum Corporation Employees. The paper company’s chair and CEO, Mark Sutton, is a member of the Business Roundtable. Suzanne Gagle, Marathon’s general counsel and senior vice president for government affairs, is a board member of the National Association of Manufacturers (NAM), which joined in the lobbying push against the tax hike proposal.

Manchin’s fundraising committees also received $5,000 from the PAC of Aflac and $2,500 from New York Life Insurance Co., both companies whose CEOs are on the BRT roster. 

Kyrsten Sinema, who recently told the White House that she opposes the reconciliation plan’s drug pricing reforms, received over $30,000 in PAC donations during August. Donations to Sinema’s leadership PAC included $2,500 from the PACs of Raytheon and $1,000 from electric company AES Corporation, both of which have CEOs on the Business Roundtable. The New York Life Insurance Co.’s PAC chipped in $2,500 on Aug. 11, just a day after the BRT tweeted praise for Sinema’s efforts on the smaller infrastructure bill. Corporate influence-peddling groups have used support for moving the infrastructure package separately as cover for its efforts to kill the reconciliation bill, since keeping the measures tied together is considered essential for the reconciliation package to pass. 

In the days after Sinema’s spokesperson said on August 23 that she wouldn’t support a reconciliation bill with a 10-year price tag of $3.5 trillion, her fundraising committees took in thousands of dollars in donations from the PACs of Pacific Life Insurance Company, Charter Communications, and corporate tax and accounting firm Ryan LLC. This afternoon, Sinema is set to hold a fundraiser with five business lobbying groups that oppose the tax increases, including the National Association of Wholesaler-Distributors whose CEO has said corporate rate hikes are “the last thing Washington should be doing.”

On Aug. 10, the Business Roundtable released a statement from President & CEO Joshua Bolten calling the reconciliation plan’s top-line spending number “troubling,” and invoking risks of inflation and lasting federal debt. House Democrats, for their part, have placed a total of $2.9 trillion in revenue raisers on the table for the $3.5 trillion spending package, which over the 10-year plan would mean a significantly lower net cost than the top-line number in the headlines. 

“Corporate money cannot be allowed to pollute this process,” said Kyle Herrig, president of Accountable.US. “Moderate Democrats have a rare opportunity to deliver life-changing investments that will lower health and childcare costs and create good jobs for so many of their constituents.”

Kurt Schrader, who signed the August 12 letter, received at least $21,000 in August from PACs, including $2,500 from the PAC of Teva Pharmaceuticals and $5,000 from Centene Corporation, whose CEO is a member of the BRT. Teva is a member of PhRMA, the third-largest lobbying spender on the Hill, according to data from OpenSecrets, with over $15.2 million disclosed in the first half this year. The drugmaker group recently ran ads against the Democratic budget plan claiming it would have exacerbated the coronavirus pandemic. Schrader also received PAC donations from Amalgamated Sugar Company and Ste. Michelle Wine Estates in the days after signing the letter.

After receiving the drug company donations, Schrader voted in the Energy and Commerce committee against including drug pricing reforms, a key revenue measure that Democratic leaders have proposed for the reconciliation bill. 

Prominent Build Back Better Act opponent Josh Gottheimer of New Jersey, co-chair of the bipartisan House Problem Solvers Caucus and a Blue Dog member, received at least $13,500 in PAC contributions in August. In early August, days before his letter was released, Gottheimer got $5,000 from the PAC of defense contractor Honeywell, which is represented on NAM’s board by the CEO of its materials division. Gottheimer’s campaign also received $2,500 donations last month from the PACs of Bayer and Pfizer, both members of trade group PhRMA, as well as Delta Airlines, whose CEO Ed Bastian is a BRT member.

The day after publication of the Washington Post op-ed he signed calling for a vote on the infrastructure bill first, Texas Rep. Henry Cuellar took in a PAC donation of $5,000 from Caterpillar, whose CEO is a BRT member, and $2,000 from Trinity Industries, whose president is a member of NAM’s board. Cuellar also received PAC donations from trade group Alliance For Pharmacy Compounding and UPS.

His Texas colleague Vicente Gonzalez, who also signed the August 12 letter, brought in a total of nearly $23,000 in August from the PACs of trade groups Interstate Natural Gas Association of America and National Apartment Association, as well as Caterpillar and Marathon. The trade group NAM said of its lobbying push against the bill, which includes subsidies for utilities to transition to renewable energy sources and a goal of reaching 80% clean electricity nationwide by 2030, “We’re doing it in every way you can imagine.”

In mid-2019, the Business Roundtable promoted a press-friendly statement signed by hundreds of its high-powered CEO members on a new set of principles for corporate responsibility, but the pledge was deemed to be more greenwashing. Over two dozen BRT members paid an effective tax rate below zero in 2018, the first year the 2017 Republican-passed Tax Cut and Jobs Act was in effect, according to analysis from the nonprofit Institute on Taxation and Economic Policy, as did 11 BRT members in 2020. 

The reconciliation plan would roll back the regressive tax cuts of the Trump administration, increase the corporate tax rate to 26.5 percent from 21 percent—just halfway to the 35 percent rate that was in place before 2018—and raise the top marginal tax rate back to 39.6 percent, from its current 37 percent. Along with provisions such as enacting a minimum tax on overseas profits, the tax reforms would raise nearly $850 billion over 10 years, providing revenue for the package’s planned spending on social care and other programs.

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