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Democrats' Fumbled Legislation of 2021-2022 Shows Corporate Influence Over Leaders

Democrats' Fumbled Legislation of 2021-2022 Shows Corporate Influence Over Leaders

When Democrats surprisingly took control of the Senate after two wins in Georgia in January 2021, the clock began ticking. From the frustrated experience of the 111th U.S. Congress of 2009-2010, when lengthy negotiations with conservative Democrats over healthcare reform took up most of the legislative oxygen, many Democrats realized they had less than a two-year window to enact legislation ahead of the 2022 midterms.

Democrats brought in a legislative agenda on voting access, climate, child care, and more, but much of it foundered in Congress, despite strong majority popularity in polls. Some measures were blocked in the Senate, either by the Republican leader or by a few conservative Democrats with billionaire backers, while others were simply not brought up by Democratic congressional leaders. (Much of this recent history is covered in Ryan Grim's understatedly valuable and keenly perceptive new book The Squad, a sequel of sorts to his book We've Got People.)

In evaluating the shortfalls of such major planks of the Democratic agenda, more attention could be paid to whether Democratic leaders did enough to insulate themselves from corporate lobbying pressures. Democratic leaders like Speaker Nancy Pelosi continue to embrace corporate fundraising and sideline the progressive caucus, and from the legislative graveyard below, the record is clear: corporate opposition and wealthy donors still work to kill popular bills. The inputs of lawmakers' offices on Capitol Hill are predominantly corporate: in 2021, lobbying spending reached its highest level in a decade. Then in 2022, lobbying spending went higher still, surpassing $4.1 billion for the first time since 2010. For 2023, the country is on pace to rack up another year of gigantic influence spending.

Briefly, a “to-be-sure” note that this post isn’t meant to be a survey of all the Biden administration’s legislative accomplishments—the economic stimulus of March 2021, the Electoral Count Reform Act of December 2022, the Inflation Reduction Act of 2023. Also, it’s important to note up top that legislation taking on concentrated power and enacting progressive policy doesn’t tend to win—most of the time, lobbying groups and special interests are certain to stymie major reforms. The Senate's 60-vote filibuster threshold, last tweaked in 1975, remains a major obstacle to democratic lawmaking and responsive policy making.

To understand how popular bills died—once again—under Democratic control of the federal government, it's worth looking back at the vote sequencing of major bills under Biden's first year in office.

Election Reform: The 2020 election was fraught with litigation over access to the ballot box. Upon taking control of the federal government, Democrats introduced the For the People Act, a legislative package that would have increased voting access and updated government ethics rules. Among other things, the bill would have created a pilot program for a public campaign financing option in congressional races, enabling more grassroots candidates to run for Congress without relying on wealthy donors for endless fundraising. A national poll conducted in mid-2021 found that 62% of likely voters supported the For the People Act’s goals, including 60% of Independents.

The bill passed the Democratic-controlled House. But the bill was blocked in the Senate by Republican filibusters, after being opposed by the powerful U.S. Chamber of Commerce and other conservative groups. A few holdout Democratic senators would not change the Senate’s parliamentary rules to be able to hold a vote on the election reform bill. And looking back to 2020, when Democratic primary voters in states like Massachusetts, Minnesota, Tennessee, Texas, and Virginia effectively awarded the presidential nomination to Biden, they anointed an establishment candidate who would not barnstorm in states like Arizona and West Virginia to pass election reforms in his first 100 days in office. A related elections bill, the Freedom to Vote: John R. Lewis Act, was also filibustered in January 2022.

Tax Rates for the Wealthiest: Two years ago, the wide-ranging Democratic budget plan in the Build Back Better Act was first delayed in the House by a group of conservative Democrats, then killed in the Senate by Sen. Joe Manchin in a climactic Fox News appearance. In the last few months of 2021, the bill’s support among likely voters stayed steady above 60%, according to tracking polls. But the bill was fiercely opposed by what the Washington Post called a “massive lobbying blitz” from corporate giants including the Chamber of Commerce and the CEO group Business Roundtable, whose board is led by top executives at GM, Apple, JPMorgan Chase, and others.

The Build Back Better Act (BBB) being shelved in the Senate had huge implications for climate and numerous social spending programs. But focusing on another aspect: one way the budget plan would have raised revenue was through a 5% surtax on households with adjusted gross income above $10 million and an additional 3% tax on those above $25 million. While the Inflation Reduction Act, signed into law in August of last year, took steps to reduce tax avoidance by large corporations, it did not address tax rates for the 27,000 households that make up the superrich. In its wake, some conservative lawmakers continue to push for commissions that would reduce the federal deficit through cuts to Medicare and Social Security, instead of through simple tax reforms like scrapping the payroll tax cap. About six in 10 adults say they favor corporations and wealthy people paying “their fair share” in taxes, a Pew poll found in April. Among the conservative Democrats who undermined the BBB are several who fundraise heavily from private equity executives.

Narrowing the “Carried Interest” Loophole: This tax scheme allows wealthy investment managers—like private equity and hedge fund executives—to pay lower tax rates on their compensation than middle class taxpayers. In many cases, executives’ tax rate is just 20%, compared with the top tax rate on earned income of 37% or 39.6%. A 2019 poll found that 77% of voters across party lines supported closing the loophole.

In August 2022, Chuck Schumer said that Sen. Kyrsten Sinema, a former chair of the House Blue Dog PAC, demanded that provisions narrowing the carried interest rules be removed from the Inflation Reduction Act. Senators Schumer and Manchin had struck a deal to narrow the exemption by extending the holding period from three years to five, among other things. Sinema’s campaign committees had raised nearly $1 million from Wall Street donors from mid-2021 to mid-2022, a haul that continued as the previous Congress wrapped up and went to pay for luxe travel and fundraising trips.

Washington, D.C. (by Ted Eytan on Flickr)

Big Tech Antitrust Bills: In June 2021, the Democratic-controlled House Judiciary Committee advanced six tech-focused antitrust bills that aimed to curb the market power of the biggest tech companies like Amazon, Apple, and Google. One bill, the American Innovation and Choice Online Act (AICOA), which would prohibit companies from self-preferencing their own products on their platforms, would only affect companies with at least 50 million monthly US users and $600 billion market capitalization. The Senate Judiciary Committee followed and advanced two of the antitrust measures in the first two months of 2022, over a furious tech industry lobbying blitz. A June 2022 poll found that the AICOA had the support of 58% of national likely voters, including 60% of Independents and 46% of Republicans.

As early as July 2022, bill sponsors Sens. Klobuchar and Grassley went public that they had the votes to overcome a possible filibuster of the tech antitrust bills, and Leader Schumer had promised to hold a vote. But Leader Schumer never brought the bills up for a vote, and has never offered a public explanation. The bills expired at the end of the prior Congress. Big Tech lobbyists had bundled $1.7 million in the 2022 cycle alone for the Democratic Senatorial Campaign Committee (DSCC), and at least 80 former Schumer staffers had landed jobs helping Big Tech. The Democratic Party, like its Republican counterpart, has yet to see its leadership call for a ban on accepting donations from lobbyists.

Ban on Congressional Stock Trading: The conflicts of interest posed by lawmakers trading stocks rushed to the forefront after several members of Congress traded in companies relevant to the Covid pandemic after receiving early private briefings. Previously, in 2018, Sen. Warren and House progressives had introduced an Anti-Corruption and Public Integrity Act that would have barred members of Congress and other officials from owning individual stocks while in office, but the bill has never received a Senate or House hearing. In mid-2022, polls found that around 70% of likely voters supported a ban, a cause that also had the support of two-thirds of Republicans in some polls, and more than two dozen good government groups continue to push for a ban on trading. Clear conflicts of interest continue to abound on committee assignments, like defense appropriators owning stock in weapons contractors.

But Democratic leadership under former Speaker Pelosi never brought up a stock trading ban—in fact, the Rules Committee, which the speaker controls, blocked House votes on bipartisan bills to ban stock trading by members of Congress in the months after Democrats took the gavel in 2021. Depending on the version of the legislation that passed, Pelosi’s investor husband Paul would have been barred from trading in stocks like Alphabet, exercising call options that had sent their household fortune soaring in 2020. After Pelosi allowed House Democrats to craft a bill barring ownership of securities, which was never scheduled for a vote, what emerged still had a significant loophole in its definition of “blind trust.” On the Senate side, little legislation emerged from a working group in 2022, a group that included Sen. Gary Peters of Michigan, the chair of the Homeland Security & Governmental Affairs Committee and an active stock trader.

(Image via Streets of Washington on Flickr)

Cutting Defense Spending: Under Democratic control of government, spending on defense—which accounts for around half of the federal discretionary budget—hit record levels in terms of dollars authorized. President Biden has accelerated the defense budget’s growth compared with Trump, the two together pushing levels up to a $220 billion increase over Reagan in constant U.S. dollars, according to analyst Stephen Semler. More than half of the annual Pentagon budget goes to private contractors, and five giant companies get around 30% of that torrent of cash. A 2015 internal study found the Pentagon is so rife with bureaucratic waste that reforms could save $125 billion over five years; the Department of Defense has failed six audits in a row, and cannot account sufficiently for 63% of its $3.8 trillion in assets. A 2019 report by economic security and social justice groups identified up to $350 billion in potential cuts to defense spending, such as closing foreign military bases to save $90 billion a year.

In recent years, progressives have put forward annual amendments to reduce the bloated Pentagon budget by at least 10%, bringing it back to roughly the same dollar levels of a couple years ago and slowing its growth, as well as sending funding to needs of health care, housing, and pandemic response. The progressive proposal had the support of 57% of voters, in one 2021 poll, and last year, 63% of likely voters agreed that Congress should not further raise the Pentagon’s allocation above what the Biden administration and Department of Defense requested (which it did, of course). 

Rep. Adam Smith, the Democratic former chair of the crucial House Armed Services Committee, opposed the 10% cuts that progressives proposed. The majority of House Democrats voted against the proposed 10% cuts and received, on average, 3.7 times more in defense sector cash than its supporters did. Next year, the country will throw $886.3 billion at the defense budget, a number that soars to $950 billion counting supplemental spending bills—headed rapidly to a trillion dollars every year.

Phasing Out Fossil Fuels: In the month after he won the election, more than 380 groups urged Biden to sign an executive order declaring a climate emergency, phasing out fossil fuels through steps like ending approval of any new fossil fuel projects and planning to reduce U.S. greenhouse gas emissions by at least 70% below 2005 levels by 2030. While Biden has taken actions to rejoin the Paris climate accord and protect critical minerals used in clean energy production, his administration has not phased out government financing of fossil fuels or banned oil and gas extraction from public lands. Climate scientists say that if global emissions are not halved by 2030, in line with the Paris agreement, the impacts of methane released from thawing permafrost could result in twice the warming projected from current models. Last year a Pew poll found that 69% of U.S. adults prioritize developing renewable energy like wind and solar over expanding the extraction of coal, gas, and oil. A 2018 poll found that 55% of people would support a “green job guarantee,” a job providing a living wage and benefits accompanying a national infrastructure bank and mass transit in a clean energy transition—with just 18% opposed to the proposal. Into 2021, one poll found 60% of voters supported a Green New Deal to mobilize tens of millions of people to work in good-paying, union jobs slowing the pace of climate destruction.

The Democrats' legislative window to address the climate crisis fell short of what is needed to keep the country in line with the emissions goals of the Paris agreement on climate. Even the pared-back Build Back Better Act contained a clean energy standard, part of the proposed Clean Electricity Performance Program (CEPP), that would have set a course for at least 80% zero-emission electricity by 2030. But the BBB faltered and expired after Democratic leaders changed the plan and agreed to move the industry-supported infrastructure bill first, against warnings of congressional progressives that the Senate would not vote on the BBB. The Inflation Reduction Act projects to slash U.S. greenhouse gas emissions by a hefty 41% by 2030, according to the Department of Energy at the one-year mark in August, but looks to be likely short of the emissions reductions needed to avoid unpredictable climate “tipping points.” In killing off the BBB, the U.S. Chamber of Commerce's opposition to reducing polluting emissions won again.

Similar looks backward could cover the shortcomings of the 117th U.S. Congress on establishing a public healthcare option or adopting a single-payer insurance system, expanding Medicare benefits, advancing police reform talks in the Senate, realizing immigration reform and much more. If Democrats would have preferred to run in the 2022 midterms on a record of passing legislation on more of the issues above, they can look at the corporate fundraising of their current party leaders, and reconsider what possibilities they highlight in elections. The progressive agenda of the “People’s Budget” has been there for the claiming.

Outside of the now-gridlocked federal legislative process, one way that Democratic leaders could—in theory—push back against corporate influence would be to clamp down on super PACs dropping huge amounts in Democratic primaries. In the 2022 cycle, outside groups spent millions of dollars in Democratic primaries for Congress, largely opposing progressives like Nina Turner and now-Rep. Summer Lee. Many of the groups are universally expected to let loose with millions in spending again next year. In July, House Democrats in the Congressional Progressive Caucus—Reps. Pramila Jayapal, Mark Pocan, and Jamie Raskin—sent a letter to party leaders asking them to condemn the flood of spending in primaries, but did not receive a response. Minority Leader Hakeem Jeffries could only muster himself to say, “Outside groups are gonna do what outside groups are gonna do.” In previous years, Democratic leaders have blacklisted firms that worked with progressives, so exerting pressure is a step that party insiders have taken before to enforce their prerogatives. Such an intra-party epiphany is unlikely: last year, Jeffries teamed up with one of the heavily corporate-funded House members to launch a new PAC to battle progressive challengers in safe-Democratic districts that fundraised overwhelmingly from corporate PACs and lobbyists.

Featured image of President-elect Biden and VP-elect Harris via bidenforpresident on Flickr