Roosevelt Institute | Cornell University

The Great Democratic Divide

By Dylan ScottPublished April 5, 2014

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Conflict is brewing within the Democratic Party and the source of the party's internal conflict is predictably its oddest bedfellow"”the mega donors that fill campaign coffers and command party leaders' attention. Amidst the populist surge that has slowly overtaken the Democratic Party, it is easy to forget about the close ties between Democrats and the super rich.
Conflict is brewing within the Democratic Party. Less than a year ago, strategists lauded Democrats for their strong organization, unified message and alignment behind leaders in the White House and Congress—all in sharp contrast with the fractured Republican party?

The source of the party's internal conflict is predictably its oddest bedfellow—the mega donors that fill campaign coffers and command party leaders' attention. Amidst the populist surge that has slowly overtaken the Democratic Party, starting with the 2011 Occupy Wall Street movement and continuing now with a platform based on eliminating income inequality, it is easy to forget about the close ties between Democrats and the super rich.

Astonishingly, in the 2012 election cycle, eight of the country's ten wealthiest zip codes gave more money to Democratic candidates than Republicans. On an OpenSectrets list of top political donors, you'll have to scroll down to number 17 to find an organization that gave more to Republicans than Democrats.

Close relationships between Democratic Party leaders and America's wealthiest individuals are not without consequence. Evidence of these ties is clear in recent policy decisions. For example, labor unions, the traditional base of support for the Democratic Party, want the Keystone Pipeline built, arguing that it would create good skilled labor jobs and economic growth. Hedge fund manager Tom Steyer disagrees. The White House continues to delay construction on the pipeline.

Politico observed the irony of one of President Obama's recent fundraisers, held at the Manhattan home of Blackstone Group president, Tony James, just weeks after the President released a budget including substantial tax increases on private equity funds and investment banks. Economic issues are at the core of the fighting between progressives and the pro-business wing.  Progressive economic policy proposals—such as the President's recent push to raise the minimum wage—have not gone unnoticed by mega donors. These donors and the business friendly party wing they represent are pushing back hard. "Reducing inequality is good, but it's 50 times better to do it by lifting those up who are low than by tearing those down who are high," said Larry Summers of the push to make economic inequality the issue of 2014.

With the 2014 campaign season fast approaching, the conflict between these key constituencies is coming to a head. This week's editorial battle between Daily Kos founder Markos Moulitsas and Third Way's Matt Bennett encapsulates many of the issues at the heart of this growing rift between moderates and progressives. Moulitsas writes an article welcoming the departure of key moderates Mark Pryor (D-Ark.) and Mary Landrieu (D-La.).  Third Way accuses Moulitsas of "closing off the ‘big tent'" to moderate pragmatists. Moulitsas responds by accusing Third Way and the moderate pro-business of transforming the Democratic Party into the second "Party of Wall Street".  And on it goes.

Democrats are facing serious challenges and almost certain losses in numerous 2014 battles. These deepening fractures will weaken the party and muddle its core message heading into the midterms.  With each passing week, the Democrat's rift looks more and more like the gaping ravine between pro business moderates and the extreme right wing that has plagued the GOP since 2012.