Congressional Democrats are becoming more aggressively populist, even as the Republican Party’s establishment demonstrates its strength.
Liberal populists displayed their growing power within the Democratic Party this week, turning Democratic lawmakers against a financial regulation package previously favored by many Democrats. Led by Massachusetts Sen. Elizabeth Warren, they also succeeded in blocking a Treasury nominee with an investment banking background.
While Republicans may be in charge of Congress, and Wall Street-backed candidates like Mitt Romney and Jeb Bush vying for the GOP nomination, the Democratic Party is moving left.
“The Democratic Party writ large is effectively moving towards where the vast majority of Americans are,” said Neil Sroka, a representative of Democracy for America, one of the outside groups pushing progressive causes and aligned with Warren.
Most Democrats “understand that Americans want them standing up to Wall Street banks who feel that they can write the laws, pick who enforces the laws, and generally rule the roost,” Sroka said.
Republicans and the White House, separately, have criticized some of the Democratic opposition to what they see as Wall Street’s influence in events.
Regarding the Warren-led opposition to the nomination of Lazard banker Antonio Weiss to the number-three post at the Treasury, White House press secretary Josh Earnest said Tuesday that “we just frankly disagree with the position that they have held about Mr. Weiss.”
On Wednesday, as the House passed a bill delaying the implementation of a Dodd-Frank restriction on federally insured banks trading certain securities, Rep. Jeb Hensarling, R-Texas, poked liberal Democrats for slowing the passage of the legislation. Enough Democrats had banded together to block the legislation’s passage on an expedited basis last week, even though it had cleared the House with ease last year.
The “left hand doesn’t know what the far left hand is doing,” Hensarling, the chairman of the House panel with oversight of banking, said on the House floor to laughter.
“If it’s their position that the single largest most complex economic legislation in the history of the country passed Congress in 2010 in unamendable pristine condition, they’re crazy,” said Tony Fratto, a partner at the communications firm Hamilton Place Strategies and former White House spokesman.
Fratto said the significant provisions of Dodd-Frank were not being challenged by banks and that the legislation addressing the treatment of one type of financial instrument at issue Wednesday would not affect banks’ business. “Is it your position that there should be no technical corrections to Dodd-Frank, none?” he said of the Democrats opposing Wednesday’s bill.
Some Democrats agreed with that description of the politics of the vote.
“The provisions in this bill have passed Congress overwhelmingly in years past,” Rep. John Carney, D-Delaware, told a local paper after he voted for the bill. “Only now has it become distorted and mischaracterized for political purposes,” he explained.
Nevertheless, liberals have been successful in discouraging Democrats from voting for the changes, which Republicans said were technical fixes or clarifications.
The same legislative package passed in September by a vote of 320-102, with 95 Democrats voting in favor.
When it first came up under rules requiring a two-thirds majority last week, the bill failed 276-146, with 35 members of a smaller Democratic caucus voting yes. This week, only 29, including Carney, voted for passage, as liberals ramped up their messaging against the bill.
Warren said this week she would not run for president, but she has already affected the Democratic nomination process. Hillary Clinton, the presumed frontrunner more commonly associated with business interests, has conspicuously tried to appropriate Warren’s rhetoric.
At the same time, however, establishment candidates have stepped forward on the national Republican scene.
That includes Mitt Romney saying that he was likely to pursue a presidential run. Romney, a former private equity executive at Bain Capital, received the backing of Wall Street in his 2012 run against Barack Obama.
After favoring Obama in 2008, the finance industry sent 69 percent of its donations to the GOP in 2012, according to the Center for Responsive Politics. Romney received nearly $60 million from the financial industry in 2012, according to the same source, and his top donors were the banks Goldman Sachs, Bank of America, Morgan Stanley, JPMorgan Chase and Wells Fargo.
The other leading Republican openly exploring a run, former Florida Gov. Jeb Bush, also has close ties to Wall Street. He quit a job as a paid adviser to the British bank Barclays in December, and has strong support among GOP donors on Wall Street and in business.
In recent years, Republican support for business has not been assured as some populists have risen in prominence.
In December, Chamber of Commerce chief Thomas Donohue warned that the business lobby could enter the presidential race to stave off a populist from either the right or left.
He didn’t specify names, but the candidates on the left likely include Warren and Bernie Sanders, the independent socialist Vermont senator.
On the right, it likely means Rand Paul, who said last spring that “we cannot be the party of fat cats, rich people and Wall Street.
Or it could mean Ted Cruz, who has bucked the business community on priorities such as the Export-Import Bank, the credit agency that provides loans and guarantees for U.S. companies exporting products. Cruz also has appropriated populist rhetoric, as in last spring when he said that “the rich and powerful, those who walk the corridors of power, are getting fat and happy under the Obama economic agenda” at a libertarian event.
With Romney and Bush, however, the GOP’s early stages of the 2016 are moving in the opposite direction.
