From prescription drug prices to higher taxes on the rich, many of the Democrats in the House standing in the way of more progressive legislation hail from safe Democratic seats.
That’s not true in the Senate, where the most outspoken conservative voices represent swing states.
But the opposition of many electorally secure House Democrats to President Joe Biden’s agenda undermines the longstanding excuse that concerns about electorally risky votes are the greatest obstacle to advancing a progressive agenda.
“There is an argument to make in a purple district that there are Democrats who have trouble if they vote with leadership enough of the time,” said Rebecca Katz, a progressive strategist based in New York City. “We’re now seeing Democrats … in safe seats who continually mess with core Democratic priorities.”
Democrats’ objections to drug price negotiations are a case in point. A group of conservative House Democrats voted down House Democrats’ prescription drug pricing bill on Wednesday, putting Biden’s larger reconciliation package in danger.
Reps. Scott Peters (Calif.), Kurt Schrader (Ore.), and Kathleen Rice (N.Y.), members of the House Energy and Commerce Committee, joined Republicans to block the prescription drug price negotiation bill from advancing out of committee.
In a statement following the failed vote, Henry Connelly, a spokesperson for House Speaker Nancy Pelosi (D-Calif.), suggested that Pelosi would persist in her efforts to enact price negotiation provisions.
“Polling consistently shows immense bipartisan support for Democrats’ drug price negotiation legislation, including overwhelming majorities of Republicans and independents who are fed up with Big Pharma charging Americans so much more than they charge for the same medicines overseas,” Connelly said.
Referring to the larger reconciliation package known as the Build Back Better Act, Connelly added, “Delivering lower drug costs is a top priority of the American people and will remain a cornerstone of the Build Back Better Act as work continues between the House, Senate and White House on the final bill.”
Later in the day, Pelosi got her wish. The House Ways and Means Committee voted to advance the prescription drug provisions to the House floor.
But the two committee votes revealed hurdles that the legislation faces to passage in the House. In addition to Rice, Peters and Schrader, Rep. Stephanie Murphy (D- Fla.) voted against the prescription-drug provisions on the Ways and Means Committee and Rep. Lou Correa (Calif.) also has deep reservations about the measures, according to a Politico report on Tuesday.
House Democrats hold a precarious three-vote majority, and every Republican opposes prescription drug negotiation, so Democrats cannot afford to lose all five members when the party-line bill comes for a vote on the floor.
Although lawmakers often cite electoral concerns to explain their reasons for not voting for a bill, none of those five Democrats was reelected by a narrow margin in 2020 or is included on the Democratic Congressional Campaign Committee’s list of vulnerable “frontline” members. In fact, “frontline” Democrats are among those who have urged party leadership to pass a strong drug price negotiation bill, precisely because they see it as key to their reelection prospects.
“We’re now seeing Democrats … in safe seats who continually mess with core Democratic priorities.””
House Democrats passed the drug-price negotiation provisions as a standalone bill, H.R. 3, in Dec. 2019. At that time, all five Democrats opposed to the bill now had voted for its passage. But it went nowhere in the Republican-controlled Senate at the time.
Like H.R. 3, the prescription drug price negotiation legislation that failed on Wednesday would have empowered the federal government to negotiate lower prices on a host of prescription drugs.
Drug price negotiation is a popular Democratic priority aimed at correcting a giveaway to Big Pharma in 2003 that barred the federal government from negotiating prices as it does for the Veterans Affairs health care system. The bill the House passed in 2019 was already a compromise, having been written to require negotiation on a minimum of just 35 drugs. (Peters and his allies are calling for that figure to be further circumscribed.)
Beyond the direct policy implications, though, the collapse of the prescription drug price legislation jeopardizes a host of other Democratic priorities. The bill is projected to generate massive savings for the federal government that are needed to finance other components of the reconciliation package, such as child care credits and paid family leave.
The five obstructionist Democrats claim that they are concerned about how negotiating lower prices based on average prices in other wealthy countries could negatively impact pharmaceutical industry innovation in the United States. That’s an industry talking point belied by, among other things, the favorable results of a similar policy in Germany.
Besides hailing from safe Democratic seats though, the group of conservative Democrats objecting to drug-price negotiation have all received significant contributions from pharmaceutical industry political action committees.
Murphy, the second-highest recipient of pharmaceutical industry PAC money in Congress so far this cycle, has already received $54,000 from pharmaceutical PACs in 2021. In the 2020 election cycle, she received $117,500 from those PACs.
Peters, the third-highest recipient of pharmaceutical industry PAC money in Congress so far this cycle, has already received $55,800 from pharmaceutical PACs in 2021. In the 2020 election cycle, he received $209,300 from those PACs.
Schrader, the 21st-highest recipient of pharmaceutical industry PAC money in Congress so far this cycle, has already received $24,000 pharmaceutical PACs in 2021. In the 2020 election cycle, he received $142,000 from those PACs.
Correa, meanwhile, has received $14,500 from pharmaceutical PACs in 2021, after taking in $75,000 from those PACs last cycle. And Rice has received $3,000 from those PACs so far this year after taking in $5,500 from them last cycle.
“There’s a lot of Democrats in deep blue seats who never get seriously challenged about how such large sums of corporate donations may influence their policy positions,” said Waleed Shahid, a spokesperson for Justice Democrats, which launches left-wing primary challenges against moderate and conservative Democrats in safe seats.
As of Friday afternoon, the offices of Reps. Peters, Schrader, Rice, Correa and Murphy had not responded to HuffPost’s requests for comment on the charge that corporate PAC money influences their legislative stances.
“There’s a lot of Democrats in deep blue seats who never get seriously challenged about how such large sums of corporate donations may influence their policy positions.”
The specter of corporate influence also reared its head earlier this week in the debate over the extent to which Democrats should try to raise taxes on the rich in order to finance the reconciliation package’s priorities.
House Ways and Means Chairman Richard Neal (D-Mass.) unveiled a suite of tax proposals on Monday that undoes significant parts of former President Donald Trump’s tax cuts, but stopped short of what both Biden and Senate Finance Committee Chairman Ron Wyden (D-Ore.), Neal’s counterpart in the Senate, have said they support.
Neal proposes increasing the top corporate tax rate from 21% to 26.5%, which is lower than the 28% level favored by Biden (and Obama before him). His plan also fails to fully close the carried-interest loophole that enables hedge fund managers to pay lower tax rates on their incomes, and leaves untouched the “stepped-up basis” loophole, opting instead to impose a 3% surtax on incomes above $5 million.
The “step-up in basis” loophole allows super-rich families to avoid paying capital gains taxes indefinitely on assets that have appreciated in value, so long as they are passed on to an heir at the time of the owner’s death. It is a key method through which the country’s multimillionaires and billionaires avoid paying taxes on the vast majority of their wealth.
The liberal group Patriotic Millionaires panned Neal’s plans with a statement declaring that Democrats had “failed.”
Wyden also implicitly criticized the decision not to close “step-up in basis.”
“It’s important to address the fact that billionaire heirs may never pay tax on billions in stock gains,” Wyden said in a statement to HuffPost.
Progressives blamed Neal, a safe-seat Democrat and Congress’ top recipient of corporate PAC money in the 2020 cycle, for not pushing for more aggressive changes to the tax code.
“This is a defining moment for Richie Neal,” said Andrew O’Neill, the senior economic justice policy manager for the progressive group Indivisible.
O’Neill noted, by contrast, how progressive and “frontline” Democrats on the House Education and Labor Committee teamed up to force Democratic leaders to eliminate means-testing from the reconciliation package’s proposed child care subsidies.
For Katz, who consults with Justice Democrats, the willingness of many Democrats in swing seats to embrace progressive policy — and of Democrats in safe seats to block or water down that policy — only strengthens the case for launching primaries against conservative incumbent Democrats in districts that are not competitive in the general election. Justice Democrats backed a primary challenge to Neal in 2020, but Neal prevailed handily.
“Everything that’s happening with Richard Neal is what we warned about,” Katz said. “And Democratic leadership went to bat for him. This is what they get.”
A spokesperson for Neal denied that his reliance on corporate PAC money played a role in his decision-making.
Instead, Neal crafted the legislation with the sole goal of producing a bill that could become law in spite of Democrats’ three-vote majority in the House, according to the spokesperson.
“No one understands better than Chairman Neal that laws change lives, not ideas,” the spokesperson said in a statement. “If the votes were there, not only in the House but also in the Senate, he certainly would’ve included [more progressive] provisions.”
Of course, some of the most conservative Democrats in the House, whose skepticism of tax hikes Neal needed to take into account, also come from safe blue seats.
For example, Rep. Josh Gottheimer (D-N.J.), who led a group of nine Democrats that tried to block the drafting of the reconciliation package bills in late August, won reelection by nearly 8 percentage points in 2020 and is no longer on the DCCC’s list of “frontliners.” (New Jersey Democrats could draw district boundaries that make his seat even safer ahead of the 2022 cycle.)
A possible explanation for Gottheimer’s “concerns about the level of spending and potential revenue raisers” in Biden’s reconciliation package framework is his reliance on corporate PAC money.
In the 2020 cycle, Gottheimer raised more than $1.3 million from corporate PACs ― the 27th-most of all 535 members of the House and Senate.
He is especially cozy with Wall Street donors. During the 2020 election cycle, Gottheimer received $155,500 from securities and investment industry PACs ― the 11th-most of any member of Congress.
Wall Street is especially keen to protect the carried-interest loophole, which frequently allows hedge fund and other asset managers to pay lower effective tax rates than middle-class workers on millions of dollars in income.
A spokesperson for Gottheimer objected to the suggestion that he either represents a safe Democratic seat, or is compromised by the contributions he accepts.
“It’s a Republican district. The Cook Political Report has the district as R+1,” the spokesperson said. “Congressman Gottheimer is the first Democrat in 84 years to represent the district, that Trump won.”
“The Congressman is beholden to one group: the families of New Jersey’s Fifth Congressional District,” the spokesperson added.
“What we’ve said to members is that we know making sure the uber wealthy and corporations pay their fair share in taxes is highly popular across the board.”
Other Democrats in safe seats, such as veteran New Jersey Rep. Bill Pascrell (D-N.J.), have argued that the party should avoid being seen as unduly harsh toward the super-rich.
“I am very suspect of a wealth tax,” Pascrell told The New York Times. “I think it’s perceived as ‘soak the rich.’ I don’t think it is, but that’s how it’s perceived.”
But “soaking” the rich with higher taxes, like empowering the federal government to negotiate lower prescription drug prices, is very popular with the public.
Sixty-nine percent of Americans support the general idea of raising taxes on the wealthy and corporations, and 72% support closing the “step-up in basis” loophole, according to a May poll commissioned by the progressive coalition Americans for Tax Fairness.
What’s more, the DCCC found in a July poll that 54% of voters in battleground districts see Democrats’ willingness to make the wealthy and corporations pay higher taxes as a convincing reason to vote for the party.
“What we’ve said to members is that we know making sure the uber wealthy and corporations pay their fair share in taxes is highly popular across the board,” a House Democratic strategist familiar with DCCC planning told HuffPost. “The investments we will make in access to health and child care, education, and infrastructure are also popular. We should be spreading the good news about what we can deliver for the country.”
In addition, Democratic pollster Celinda Lake noted that Biden’s victory in the 2020 election on a very clear platform of asking wealthy Americans and corporations to “pay their fair share” demonstrates the durability of the message against the weight of hundreds of millions of dollars in ads aimed at convincing voters that Biden would raise taxes on the middle class as well.
Democrats skeptical of the politics of raising taxes on the wealthy are “bringing an antiquated template to the debate,” Lake said, noting the rise of economic populist sentiment in recent years. “The template’s really shifted here, ever since 2008.”