New Democrats Make a Push

Business-Friendly Group Sees an Opening for Its Expertise

Posted October 15, 2008 at 6:44pm

When Rep. Ellen Tauscher (D-Calif.) travels to Wall Street today to discuss overhauling financial regulations with industry titans, it will be something of a homecoming. She once held a seat on the New York Stock Exchange; in fact, Tauscher cut her teeth there early in her career as an investment banker.

This time, she is making the rounds both as an emissary of House Democratic leadership and as chairwoman of the New Democrat Coalition, a centrist organization hoping a Democratic sweep in November will make it a pivotal group next year and beyond.

The group has an argument to make: Unlike most fellow moderates in the largely rural Blue Dog Coalition, New Democrats tend to represent the high-growth suburban districts that could provide Democrats their expanded margin in the House. And if Sen. Barack Obama (D-Ill.) wins the White House, they say their votes will serve as a business-friendly check on the more liberal impulses of a party suddenly in control of all levers of power.

“Our strength is that we’re firmly embedded in the Caucus, writ large,” Tauscher said. “And we’re viewed by both the Speaker and Majority Leader as a go-to group to get votes, to make sure we have strong policies benefiting working families, and are working hard to be innovative and create jobs.”

As Tauscher’s New York trip suggests, the group is already maneuvering to play a central role in what is sure to be one of the fiercest debates of the next Congress: how to rewrite financial rules to avoid a repeat of the meltdown roiling markets worldwide.

In September, as the economic crisis was reaching full tilt, the coalition created a working group on regulatory modernization to begin studying approaches. And they are planning a half-day symposium for the November lame-duck session to quiz economic experts such as former Securities and Exchange Commission Chairman Arthur Leavitt on the topic.

More importantly, as Democratic leaders struggled to line up votes for a Wall Street bailout, New Democrats demonstrated they could deliver. On Sept. 24, five days before the first, failed vote, Speaker Nancy Pelosi (D-Calif.) and Majority Leader Steny Hoyer (D-Md.) huddled with Tauscher and the coalition’s four vice chairmen, Reps. Joe Crowley (N.Y.), Artur Davis (Ala.), Ron Kind (Wis.) and Adam Smith (Wash.). Their request was twofold. Could the New Democratic leaders lobby their own to ensure as many “yes” votes as possible? And could they also help explain the package to the broader Caucus?

Over the next several days, Crowley and Illinois Reps. Melissa Bean and Bill Foster — all New Democrats on the Financial Services Committee — made the case for the bill in Democratic Caucus meetings. The day before the vote, the coalition became the only Democratic Caucus group to formally endorse it. The measure failed, but New Democrats produced 39 votes, or two-thirds of their 60 members, in support. The second time around, 47 New Democrats lined up behind it.

They have also shown they can buck Democratic leadership. In July, when the majority was playing defense against Republican attacks on the energy issue, Democratic leaders aimed to score a quick victory by passing a measure to limit market speculation on oil and other commodities. New Democrats thought the bill was the wrong approach, and when it came up under suspension of the rules, 10 of them, including four of their five leaders, joined 135 Republicans in voting it down. The defections by the New Democrats provided the margin of defeat, and it gave them the leverage to demand the measure get stripped from a comprehensive energy package leaders cobbled together last month.

For the most part, the coalition has not found the need “to draw the line” with leadership, Crowley said. It’s a fact that several New Democrats acknowledged has kept the group out of the headlines, compared to Blue Dogs, whose singular focus on pay-as-you-go budgeting has often tied leadership in knots and earned the group a polished brand as the fiscal hawks of the party.

“It’s an easier thing for people to get,” said Hoyer, who works closely with both groups.

Several sources close to the New Democrats said the group is only recently finding its footing after a 2005 reorganization meant to revitalize the coalition.

Formed in 1997, the group was closely aligned with the Clinton White House and enjoyed influence for the remainder of his presidency. But during the Bush years, stifled by GOP control of Congress, New Democrats wandered into obscurity. Tauscher helped revive the group in 2005, cutting its membership of uncommitted members, founding a political action committee to support like-minded candidates, and refocusing the group on trade and technology initiatives.

On top of those issues, and the overhaul of financial regulations, the group is looking to drive debates on energy and health care.

New Democrats and their allies are hoping a blue electoral wave will strengthen their hand, and the group is working to make it happen. They have endorsed 18 candidates and doled out $566,550 in PAC funds this year.

And while Tauscher and Crowley were committed backers of Sen. Hillary Rodham Clinton (D-N.Y.) during the Democratic presidential primary, Davis was the first Member of Congress to endorse Obama. Smith and Bean — now an Obama liaison in the House — were not far behind.

“Having been on the campaign trail together, I was able to introduce him to a lot of folks who hadn’t met him,” Bean said. Obama sat down with the group in August 2007.

New Democrats also count House Democratic Caucus Chairman Rahm Emanuel (Ill.) among their ranks. A veteran of the Clinton White House, he stayed neutral in the primary, but he is now a top adviser to the Obama campaign.

“We’ve had the benefit of being in the majority the last two years and getting back to our game,” Tauscher said. An Obama win would make it “game day every day. There’s a lot to undo.”

Steve Champlin, a Democratic lobbyist with the Duberstein Group, said the New Democrats should play a critical role in shaping the agenda next year since they represent the type of suburban, independent-minded voters Democrats need to build a lasting governing majority. “They arise out of competitive districts, where their constituents are engaged in the economy and don’t share the traditional concerns that traditional Democratic constituencies have about the economy,” he said. “It’s an essential view for the Democratic Party as a majority party.”