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New Democrats May Feel Backlash on CAFTA

By declaring its opposition to a key trade agreement, the New Democrat Coalition may have damaged its ties to the business community and potentially hurt its fundraising efforts, particularly with tech industry lobbyists.

Leaders of the coalition, who tout themselves as pro-business on many issues, came out strongly against the Central American Free Trade Agreement on Wednesday, much to the chagrin of business lobbyists fighting for CAFTA’s passage.

“You simply cannot be pro-tech and anti-trade,” said Bruce Mehlman, executive director of the Computer Systems Policy Project, whose members are CEOs of high-tech companies. “The real tech champions are counted when the votes are toughest.”

One longtime tech lobbyist said his sector will forgive Members who oppose CAFTA for reasons based on their constituents’ appeals, but it will be less forgiving for the New Democrats who are simply toeing their party’s line. Those lawmakers, this lobbyist said, “better not come knocking for donations next year.”

But Rep. Adam Smith (Wash.), who chairs the newly formed New Democrat Political Action Committee, said the NDC does “not make its political decisions based on contributions.”

He said the group came out against CAFTA because the Republicans drafted a poor agreement and refused to negotiate with pro-trade Democrats to come up with a bipartisan bill.

Smith added that since the late 1990s, advocates for technology and trade have slowly cut back contributions to New Democrats, so there is not much more the lobbyists can do to financially strangle the moderate organization.

“They have been choking off our oxygen for some time, and this gives them another excuse to do that,” he said. “The political consequences are what they are.”

But Ralph Hellmann, the chief lobbyist for the Information Technology Industry Council, said his group still plans to work with Democrats, perhaps just not New Democrat Coalition members.

“High tech has looked to the New Democrats to be leaders on tech issues, but this underscores our need to work with other groups in the Democratic Caucus such as the Blue Dogs, the black caucus and the Hispanic caucus,” he said. “We’re going to continue to work closely with the Republicans, but we’re going to have to find others in the Democratic Caucus.”

At a coalition meeting Wednesday, House Majority Whip Roy Blunt (R-Mo.) said of CAFTA, “We cannot do this by ourselves. … If this doesn’t happen, it doesn’t happen because of the Democrats who tell you they’ll be there and never are.”

One Democratic lobbyist said the New Democrats have come out against CAFTA to woo campaign dollars from organized labor and the sugar industry, key opponents of the trade agreement, because tech money has dried up.

“I think they’re looking at their vote as a way of raising money,” this lobbyist said.

As it happens, the New Democrat PAC is hosting its first major fundraiser on May 17 in Washington, hoping to raise money for current and future Members. The group doesn’t have a fundraising goal for the event.

But technology lobbyists aren’t enthusiastic. “Tech and trade lobbyists across town are going to sit on their wallets for this event, especially since this PAC is a fledgling effort and there are other ways to support moderate Democratic causes,” one tech industry source said.

Groups lobbying for CAFTA say that, in the big picture, the opposition of the New Democrats won’t change their strategy. One Democratic tech industry source said, “It means we will look elsewhere for the votes. There are still plenty of Dems who are in play.”

Brigitte Gwyn, the chief trade lobbyist for the Business Roundtable, said that while her group is “obviously disappointed,” the opposition of the New Dems to CAFTA hasn’t altered her efforts, either.

Some Democratic lobbyists say the CAFTA issue highlights a larger disconnect between the New Democrats and Republicans.

Bruce Andrews, a lobbyist at Quinn Gillespie & Associates who is close to several moderate Democratic Members, said, “From the discussions I’ve had this is as much about process. [The New Democrats] are frustrated because the administration or the Republican leadership doesn’t work with them. They just come and ask for their votes.”

But lobbyist Jarvis Stewart said the New Democrats themselves are also struggling to define their identity.

“I think the New Dems have been trying, for more than two legislative cycles, to find their footing,” said Stewart, a former chief of staff to Blue Dog member Rep. Harold Ford Jr. (D-Tenn.).

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