If ‘Dems Are in Disarray,’ Blame Corporate Cash

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Problem Solvers Infrastructure - Credit: Bill Clark/CQ Roll Call via AP Images
Problem Solvers Infrastructure - Credit: Bill Clark/CQ Roll Call via AP Images

WASHINGTON — Headed into one of the most important votes of Joe Biden’s presidency, a small band of moderate Democrats with corporate backing are demanding the House plow ahead with a $1 trillion infrastructure deal even if it casts doubt over the sweeping $3.5 trillion bill that would enact much of Biden’s Build Back Better domestic agenda.

The vote — which was slated for today but has been delayed till Thursday — is the congressional equivalent of a who-blinks-first staring contest between the liberal and centrist blocs of the Democratic Party. House Speaker Nancy Pelosi (D-Calif.) and her allies in Congress had hoped to pass the bipartisan, corporate-backed infrastructure deal and the $3.5 trillion Build Back Better package coupled together, using the smaller bill as leverage to ensure the Senate passed the larger, more ambitious deal.

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But the small group of moderate Democrats — led by Rep. Josh Gottheimer of New Jersey, who co-chairs the bipartisan Problem Solvers Caucus — has demanded an immediate vote on the smaller infrastructure package, legislation that has bipartisan support, the backing of much of corporate lobbying groups like the Chamber of Commerce, and is already approved by the Senate.

The progressives say they won’t support the infrastructure bill until the Senate passes the $3.5 trillion deal, which includes sweeping domestic policies like universal pre-K, an expansion of Medicaid, and a massive investment in renewable energy technologies and other tools for combatting climate change. The progressives also support the more narrow measure, but they want to hold it up in the House until Senate Democrats vote swiftly on the bigger, more expansive bill.

“If we don’t deliver,” Rep. Pramila Jayapal (D-Wash.), who chairs the Congressional Progressive Caucus, told the Washington Post, “then I think all of the people who came out and voted for Democrats to take control of the House, the Senate, and the White House are going to come out and say, ‘That’s it.’ ”

But the moderates don’t want the infrastructure bill’s fate tied to the $3.5 trillion package, which would raise taxes on big businesses and the wealthiest Americans to pay for much of its new spending. “There’s no reason why we shouldn’t pass [the infrastructure bill] right away and get the shovels in the ground,” Gottheimer told on CNN Sunday, adding that he intended to “keep working on this separate bill on reconciliation, which I’m committed to passing.

Moderates say they oppose linking the two bills because they want to take more time shaping and debating the larger bill. But critics say they’re playing a different game: dragging out the legislative process so that the bigger bill, with its new tax increases, can be whittled down or killed altogether. Right on cue, The New York Times reported on Sunday that Sen. Kyrsten Sinema (D-Ariz.), another key centrist in Congress, has said in private that she would not support any corporate or income tax increases of any kind.

To understand why a group of Democrats would do that, all you have to do is look at the corporate donors that back the small but vocal centrist bloc in the Democratic Party, critics say.

“We have the supposedly bipartisan Problem Solvers caucus creating problems for a Democratic agenda, and basically serving corporate interests,” says Adam Green, co-founder of the Progressive Change Campaign Committee. “If corporate America does not want to pay their fair share of taxes, if you’re sitting in a corporate office, and you’re designing a strategy for how to beat back this Democratic agenda of raising taxes on billionaires and giant corporations, the way to do it is to decouple these bills.”

For the big business groups who donate heavily to centrist Democrats, it’s an ideal scenario. The Chamber of Commerce, the nation’s top lobbying outfit for corporate America, and other industry groups have supported the smaller infrastructure bill because it pours money into projects such as repairing roads and bridges — without requiring any massive tax increases to fund those projects. The $3.5 trillion reconciliation deal, on the other hand, includes revenue-raising proposals like new increases on the corporate tax rate, the tax rates for the highest earners, and the capital-gains tax on investment income. The Chamber has vowed to “do everything we can” to stop the “tax raising, job killing” reconciliation bill.

A review of campaign-finance records shows a long and lucrative corporate money trail funding the centrist Democrats now accused of hampering the bill. Gottheimer has raised nearly $3.5 million in PAC money in his last two elections, according to the Center for Responsive Politics. The biggest funders in his corner, donation records show, are the finance, insurance, and real estate industries, labor unions, and the health-care industry. PAC donors include Goldman Sachs, the American Investment Council, Morgan Stanley, TIAA, and UBS Americas.

The individual donations to his campaign are filled with representatives of Big Law, Big Finance, and other powerful corporate interests. Of the leading donors to his 2020 reelection campaign, securities and investment companies, lawyers and law firms, real estate, and insurance fill the top four slots.

It’s been a savvy investment for the firms. Gottheimer has one of the most moderate and pro-business voting records of any House Democrat. The Chamber of Commerce endorsed him for reelection in 2020. Last month, in fact, executives for one major health-insurance company, Cigna, and for a hedge fund, Davidson Kempner Capital Management, hosted fundraisers for Gottheimer as the negotiations over the two infrastructure bills ramped up, the investigative website Sludge reported. (A spokesman pointed to Gottheimer’s Sunday CNN interview but declined to comment further.)

Rep. Scott Peters (D-Calif.), another vocal centrist who’s earned several U.S. Chamber endorsements and who’s challenged key prescription-drug-pricing reforms in the larger Build Back Better package, counts pharmaceutical companies’ employees and PACs as some of the biggest industry donors to his 2020 campaign, filling his campaign coffers with more than $220,000. Health companies and HMOs ranked third in Peters’ top-donor list after retirees, and the real-estate industry ranked fourth. A spokeswoman for Peters says the abundance of health-related companies in the congressman’s district means it’s “no surprise” he receives donations from that industry. The spokeswoman said Peters has his own plan to reduce drug prices, supports tax increases on corporations and wealthy Americans, but would only say that Peters “hopes he is able to support the final reconciliation package.”

And Rep. Henry Cuellar (D-Texas), another member of the bloc of centrist Democrats, has faced scrutiny for enjoying the support of fossil-fuel groups while at the same time threatening to delay the reconciliation bill, which includes hundreds of billions of dollars in spending to accelerate the transition away from dirty energy sources. (A Cuellar spokeswoman didn’t respond to a request for comment.)

On the other side of the Capitol, Senate Democratic centrists Kyrsten Sinema and Joe Manchin (D-W.V.) have told the White House that they’re opposed to the price tag on the $3.5 trillion reconciliation deal. In Sinema’s case, she has tried to use her leverage as a Senate swing vote to de-link the two bills, saying that if there wasn’t a vote on the infrastructure deal by September 27th or if the vote failed, she wouldn’t support the Build Back Better package.

Sinema in particular has balked at one key provision of the reconciliation bill, a drug-price reform that would help pay for the new spending. With Democrats holding the thinnest possible majority in a 50-50 Senate, losing Sinema’s support would sink the $3.5 trillion bill. Yet Sinema, too, has come under pressure for her corporate campaign funding. As Salon recently reported, citing data from the Center for Responsive Politics, pharmaceutical and medical industry groups have donated roughly $750,000 to Sinema throughout her nearly decade-long career in Congress, first as a House member and now as a U.S. senator. (A Sinema spokesman didn’t respond to a request for comment.)

Of course, progressive funders also have a stake in the fate of Biden’s legislative agenda. Labor unions such as the Service Employees International Union have donated tens of millions of dollars to left-leaning super PACs and smaller amounts via the union’s members and leaders to progressive elected officials, including Sens. Bernie Sanders, Elizabeth Warren, and Jon Ossoff as well as dozens of liberal House Democrats, according to federal donation records. If the $3.5 trillion reconciliation package passed Congress, it would allot $400 billion to expand Medicare payments for home-care services, which would expand the ranks of caregivers and likely grow the SEIU’s ranks at a time of dwindling union membership nationwide.

The distinction, though, between progressive and centrist funders is the ultimate aim: Corporate donors oppose any new tax increases on big business and uber-wealthy Americans — and their allies in Congress appear intent on slow-walking, watering down, or possibly outright killing those tax hikes, which could deal a devastating setback to the Biden administration’s plans to tackle climate change, income inequality, health-care shortfalls, and more.

Progressive donors support both bills. But on Sunday, Rep. Jayapal, the House Democrat and Progressive Caucus leader, sent a signal that liberal Democrats were prepared to vote down (for now) the infrastructure deal to ensure reconciliation gets immediate action in Congress. She told CNN the votes weren’t there to pass the infrastructure bill, but progressives would be ready to support it as soon as the Senate did its part and passed the larger package.

“I think the urgency is important,” Jayapal said. “We want to have it happen as soon as possible. We need the Senate to engage with us if that’s going to happen.”

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