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.

Most of the attention on these agreements has understandably focused on their near-term legislative impacts. But the cooperation between Democrats and traditionally skeptical industries could have far-reaching campaign implications as well. These industries already started shifting their dollars towards the Democrats after they regained the House and Senate majorities in 2007. Now, these nascent policy alliances offer Democrats the prospect of a more solidified financial commitment, creating yet another potential roadblock for a scrambling Republican Party. 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."

Each of the Democratic policy agreements with these industries turned heads. After years of opposing federal mandates to improve vehicle mileage, a phalanx of auto executives joined President Obama at his announcement of new fuel economy standards last week. A week earlier, representatives of insurance, pharmaceutical and other health care companies flanked Obama as he announced an aggressive deal to reduce the increase in health care spending. And, to the frustration of Republican opponents, the cap-and-trade climate bill steered through the House Energy and Commerce Committee by Representatives Henry Waxman of California and Ed Markey of Massachusetts won praise from leading electric utilities.

While automakers are relatively modest donors, energy and health care concerns are big financial players. Democrats, in power at every level of the federal government, were always likely to fundraise well for the next two to four years. The question is whether they can parlay their warming relationships with these industries into the kind of cash advantage that Republicans enjoyed from them during their decade in the majority.


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In 2004, when Congressional Democrats were still in the minority, they only captured about 40 percent of $88.3 million total campaign donations from health care industries, according to the Center for Responsive Politics. Republican candidates received more donations across the board: from medical professionals, hospitals, insurance companies, and especially from the pharmaceutical industry, which gave Republicans $8.7 million and Democrats just $4.4 million. But by 2008, with the Democrats in the majority, the overall numbers reversed: Congressional Democrats captured almost 60 percent of a larger pot of health care money ($124.7 million). Democrats even bested Republicans in pharmaceutical donations, $11.3 million to $10.2 million.

Comparable fundraising shifts occurred in the automotive and energy fields. Among automakers, Republican Congressional candidates enjoyed a nearly three-to-one advantage ($1.4 million to about $550,000) over Democrats in 2004; in 2008, from the same group, Democrats collected over $1 million to about $950,000 for Republicans. Republicans still held a commanding lead in donations from the overall energy sector in 2008, raising $33.5 million while Democrats attracted $19.8 million. But even that was over $10 million more than Congressional Democrats raised from energy interests in 2004; the Democratic share of energy contributions increased from 26 percent in 2004 to 37 percent in 2008. Democrats still found little support from the mining and the oil and gas industries (which respectively directed 69 per cent and 75 per cent of their contributions toward Republicans). But Democrats have made big gains elsewhere, particularly among utilities. Utilities gave almost exactly two-thirds of their $13.3 million in political donations to Republicans in 2004. By 2008, Democrats and Republicans split $16.9 million of utility money almost 50-50.

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