Sen. Joe Manchin (D-W.V.) gestures as he speaks to reporters in the Hart Senate Office building on August 01, 2022. (Anna Moneymaker / Getty Images)

Billionaire-Backed Democrats Killed the Build Back Better Act

in Sludge
on August 26, 2022

A common refrain about the Inflation Reduction Act, the surprise compromise deal on the Democrats’ legislative agenda, is that it’s as good as can be expected, given the current makeup of the Senate. On its climate measures, the newly-signed law, known as the IRA, could reduce greenhouse gas emissions by a good chunk—about 40% from 2005 levels, according to three emissions modeling groups

On the enforcement side, though, the IRA’s provisions like a fee on methane leaks are notably weak, and its deal with Sen. Joe Manchin would lock in fossil fuel infrastructure and drilling that would likely shatter the world’s Paris Agreement commitments. Weighing the trade-offs on climate, many climate experts and environmental advocates still support the deal for its transformative potential, as scientists with the United Nations’ Intergovernmental Panel on Climate Change have consistently found that global emissions need to be halved by 2030.

It’s easy to see how the pared-back IRA is the result of a 50-50 Senate, where Joe Manchin is one of a couple of economically-conservative Democrats with a deciding vote over climate regulations, energy policy, and tax revenue. What’s harder to see is the history, over the past decade of elections, of how the Democrats arrived at a 50-50 Senate, when their policy agenda on clean energy—not to mention other fronts—polls as widely popular with voters.

Heading into the elections of 2022 and 2024, Manchin and his political allies remain influential in empowering conservative Democrats who held back progressive policies that have impressive public support—and potentially cost the party seats that could have passed the full Build Back Better Act in 2021. 

In other words, Manchin and his corporate-PAC-dependent allies like the House Blue Dog Coalition are not only skewing the legislative process in response to their campaign contributors and lobbyist insiders. These economically-conservative Democrats are also hindering what’s possible on climate action within the Democratic Party, distorting public opinion about energy policy and endangering the environment.

Democrats emphasize that the IRA—like the Build Back Better agenda before it—is a package of measures that poll eye-openingly well even across the aisle. A recent Data for Progress poll found the bill’s spending on things like clean energy production and lowering prescription drug costs was supported by 52% of Republicans, as well as strong majorities of independents and Democrats.

Democratic candidates might have harvested more of this popularity over the past decade. In 2011, after the Democrats saw massive losses in the 2010 midterms, the Congressional Progressive Caucus released its first edition of its People’s Budget, an annual counterproposal to party leadership on budget priorities. The progressives’ proposal would have invested $1.7 trillion in infrastructure programs, with revenues raised through a combination of winding down costly military operations abroad and reforming taxes on the wealthy and corporations. The alternative budget would have increased discretionary spending on “renewable energy technology and deployment” by 10%, categorized as environmental programs under the Department of Energy, toward the goal of launching a green jobs innovation fund. But at the time, Senate Democrats were preoccupied with deficit reduction without committing to cutting gigantic—and devastating—military operations, and the Obama administration followed their definition of what was politically possible. 

The role of billionaire financiers in shaping the Democratic Party of the past decade deserves more attention. Heading into President Obama’s second term, the push for deficit reduction and austerity measures on the Democratic side was significantly driven by the Fix the Debt campaign, an effort underwritten by nearly $500 million in donations from Wall Street billionaire Pete Peterson in a decades-long effort to slash Social Security, Medicare, Medicaid, and government spending. Fix the Debt’s leaders in 2013 were found by the nonprofit Center for Media and Democracy to have a host of undisclosed ties to corporate giants and finance industry interests, pushing an agenda backed by dozens of former members of Congress and revolving-door lobbyists.

More recently, conservative Democrats have been more prominent under the auspices of No Labels, a 501(c)(4) organization that sponsors the bipartisan Problem Solvers Caucus in the U.S. House. The nonprofit does not disclose its funders, making it a dark money group—according to documents seen by The Daily Beast in 2018, No Labels is funded by recurring donations from executives and Republican megadonors. One GOP-supporting billionaire No Labels donor is reportedly hedge fund founder Nelson Peltz, who bragged last year about talking to Manchin weekly while the senator was stalling the Democrats’ agenda. Another is billionaire Marc Rowan, co-founder of private equity giant Apollo and a major donor this cycle to a Mitch McConnell-controlled super PAC, the Senate Leadership Fund. No Labels’ founder and CEO is Nancy Jacobson, the fundraiser and spouse of centrist Democratic consultant Mark Penn, who also owns a private equity firm.

Manchin was undeniably the key figure of the past year-and-a-half of roadblocks in passing a reconciliation budget bill with climate provisions. A former ALEC state chair in West Virginia, Manchin is a close ally and networking beneficiary of No Labels, which claims to have raised $50 million to mount a third-party presidential bid in 2024, Puck News reported in June. House Democrats promoted by No Labels also played a key role in killing the Build Back Better Act: Problem Solvers Caucus members Reps. Carolyn Bordeaux, Jim Costa, Jared Golden, Vincente Gonzalez, Josh Gottheimer, and Kurt Schrader were among the nine conservative Democrats who blocked the reconciliation bill, claiming to be concerned over its 10-year spending amounts. In slowing and killing the Build Back Better Act, their benefactors attempted to dub them the “Mod Squad.” Still, Problem Solvers Caucus co-chair Gottheimer is allied with the House Democratic Caucus Chair Hakeem Jeffries in raising money from corporate lobbyists to fight off progressive candidates.

Through spending in Democratic primaries and gauzy Facebook ad campaigns from outside groups, the fossil fuel industry has exerted behind-the-scenes influence favoring more conservative Democrats, aiming to forestall necessary reductions to greenhouse gas emissions and block proposals for trillions of dollars of spending on pro-climate programs. Democratic primary voters for years have heard party leaders dismiss the “green new dream” while hearing from Big Oil-funded think tanks that climate action might somehow be expensive, when even financial services conglomerate Citi has found that what it calls the “action scenario” of spending big on renewables and energy efficiency is projected to save trillions of dollars by 2040 compared with the costs of an “inaction” scenario of renewables growing at a slower rate. The resulting IRA is a climate bill that oil companies have said is a “net positive” for their businesses.

A major proposal circulating among more Democrats, from progressive policy circles to more establishment figures, over the past few years is a green jobs guarantee: giving every American who wants one a good-paying job with benefits working on things like renewable energy projects, weatherizing homes and buildings, developing mass transit projects, and maintaining green community spaces. “By making living-wage work available to anyone who wants it, the program would also establish a de facto wage floor, forcing private sector employers to match the kinds of wages, working conditions, and benefits available to workers through the public sector,” journalist Kate Aronoff wrote in 2018. Polls that year found the green framing surprisingly popular even with Trump voters. A wider federal jobs guarantee program could incorporate work in other fields, such as child and elder caregiving and educational programs. A proposal to invest $2.3 trillion over eight years to create millions of good-paying, union jobs in clean energy kept its support in the early months of the Biden administration, before running aground in the Senate. 

Unsurprisingly, the conservative think tank American Enterprise Institute balks at the idea, saying that a federal job paying $15 an hour with benefits would “destroy the labor market.” The corporate-funded centrist group Third Way, which counts Sens. Manchin and Sinema among its co-chairs, threw cold water on the proposal ahead of the 2020 presidential primaries, and most Democratic candidates for the White House didn’t get behind it. The behemoth U.S. Chamber of Commerce, the largest lobbying group in the land, launched a massive campaign against the Build Back Better Act’s provisions on fronts like paid family leave, after years of billionaires fighting policies like better sick leave. 

For years, the Democratic National Committee held back on challenging the fossil fuel industry, preferring instead to accept its corporate and executive PAC donations and quietly attempt to rewrite its party platform to drop language that would have called to end subsidies for the industry. Some progressive lawmakers like Reps. Rashida Tlaib and Ilhan Omar have touted a green vision on climate and jobs while eschewing corporate PAC money, and Rep. Ayanna Pressley of Massachusetts introduced a job guarantee resolution in Congress last year. But House Democratic leadership continues to sit on their hands in primaries this cycle as outside super PACs drop millions of dollars to protect conservative incumbents and oppose progressives.

Since 2016, Democratic candidates have lost a number of Senate races by mere percentage points, meaning that winning a tiny share of state registered voters who did not choose to vote in the Senate races would have secured wins.

  • Last cycle in North Carolina, where Cal Cunningham lost to Sen. Thom Tillis by under two percent of the vote, a turnout of about 1.3% more registered voters for the Democrat could have flipped the outcome—is that more or less plausible with a green jobs guarantee on the national agenda? 
  • In 2018 in Florida, when incumbent Bill Nelson lost to Sen. Rick Scott by about 0.2% of the vote, a turnout of 0.1% more registered voters in the state for the Democratic candidate would have held the seat—would a federal job guarantee with a livable wage and benefits have helped or hurt the effort? 
  • In 2016, one percent more of Pennsylvania voters voting for the Democrat could have bounced Pat Toomey for Katie McGinty—with what we’re seeing this cycle in the state’s Fetterman-Oz race, would a green jobs guarantee have been a useful talking point? 

The signing of the IRA should not obscure the Democrats’ failure to hold the federal government and build on the climate-related executive orders of the Obama administration, after the Waxman-Markey cap-and-trade bill died in the Senate in 2010. The 2016 presidential election was another hinge point where full-throated support for vast investment in climate might have changed the outcome of the Electoral College vote in Michigan, Pennsylvania, and Wisconsin. 

In December 2015, Bernie Sanders’ climate plan promoted 10 million clean energy jobs, restricting fossil fuels, and taking on the fossil fuel industry’s political power. His campaign immediately signed the No Fossil Fuel Money pledge released in early 2016 by 20 groups including Greenpeace, 350, Food and Water Watch, Friends of the Earth, and others. 

As a candidate, Secretary Hillary Clinton declined to sign the pledge and put forward a more moderate plan on climate, including in an April 2016 climate-focused debate with Sanders, foregrounding programs like challenge grants to states, given the presumed intransigence of a GOP-controlled Congress in 2017. Clinton’s campaign had brought in nearly $2.7 million in bundled donations from lobbyists with fossil fuel industry clients, according to a Greenpeace tally, and its allied super PAC welcomed millions more in funding from fracking financiers. In April 2016, investigative journalists found that the Clinton Foundation had accepted $3 million from Chevron, ConocoPhillips, and ExxonMobil, which lobbied Clinton’s State Department before it approved in 2009 a Canadian oil sands pipeline. After securing the 2016 nomination, the Clinton camp disappointed environmentalists by declining to lead, in the non-binding Democratic Party platform, with an endorsement of a price of carbon and a national cap-and-trade system. The concerns of swing-state voters, or non-voters, who cited the Clinton Foundation’s business donors might have been assuaged with more distance from corporate lobbyists among party leaders and fundraisers.

The Democratic Party remains a strange hybrid creature, where opportunities to shape its rules and curb the influence of corporate lobbyists are largely closed off from members. As opposed to a membership organization like a labor union or a democratically-run nonprofit or cooperative, the Democratic Party is a privately-run corporation whose leaders set its rules without being directly elected by grassroots party members. Insular groups like the DNC Rules and Bylaws Committee remain insistently distant from grassroots input over how the party runs its primary elections and what money flows in and out of party groups. Proposals to curb the influence of individuals employed as lobbyists, attorneys, executives, or consultants for major industries are hastily voted down by Democratic Party insiders without a transparent or deliberative process.

If Democrats are able to hold control of Congress in the midterms, next year they can go further than the ethics provisions the House passed last year in the For the People Act, and pass laws that take steps like banning fundraising from lobbyists and extending the cooling-off time for former government employees going through the revolving door. If the ethics push runs aground in the Senate filibuster (that is, if the legislative filibuster rules observed just since 1975 are still in effect), Democrats can still adopt stronger practices as party rules, as dozens of federal lawmakers have voluntarily done in observing the No Fossil Fuel Money pledge to not accept any contributions above $200 from a donor in the industry.

It’s not 2013 anymore, and renewable energy has become cheaper than polluting fossil fuels in much of the world. Instead of subsidizing the fossil fuel industry, environmental scientists reiterate that the technology underpinning green energy is ready to scale: “The energy-producing technologies considered include only onshore and offshore wind electricity, solar photovoltaics for electricity on rooftops and in power plants, concentrated solar power, solar heat, geothermal electricity and heat, hydroelectricity… no batteries with more than four hours of storage were needed. Instead, long-duration storage was obtained by concatenating batteries with four-hour storage together.” The tools are in hand, and as soon as 2030, the world will see if the Democrats can lead the U.S. to hit its emission cut targets, as set out unmistakably in the Paris Agreement, and try to manage the worst effects of the global climate catastrophe.

For more muckraking, get the free Sludge newsletter.

Read more:

Deficit Fears Have Deep History in Corporate-Funded Democratic Party Groups

Manchin and Sinema Donors Gave Millions to Republican PACs

Big Business PACs Gave Millions to Dem Party as Biden Agenda Collapsed