On the Fence

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*Uninsured numbers come from 2008 U.S. Census Bureau data.

The vote was 10 to 13, with three Democrats — Sens. Max Baucus (Mont.), Kent Conrad (N.D.) and Blanche Lincoln (Ark.) — opposing the proposal.

Democratic Sens. Bill Nelson (Fla.) and Tom Carper (Del.), who voted against a similar proposal offered earlier in the day, both supported Schumer’s amendment.

We are tracking all of today’s developments on our Senate Public Option Scoreboard.

But Baucus wasn’t the only Democrat on the panel to vote against the Democratic proposal. Sens. Robert Menendez (D-N.J.) and Tom Carper (D-Del.) were also vocal opponents of the amendment, and offered “no” votes to back their words.

It’s not tough to surmise the reasons.

New Jersey is one of the nation’s great pharmaceutical hubs, housing such drug giants as Johnson & Johnson, Merck, Wyeth and Schering-Plough. Earlier this year, Bausch and Lomb moved in as well.

As for Carper’s Delaware, it boasts the headquarters of AstraZeneca, a top-10 drug maker with revenues topping $31 billion last year.

And the industry has never been shy about showering local lawmakers with campaign cash. Indeed, Menendez has accepted more than $357,000 from the pharmaceutical industry over his congressional career, according to the Center for Responsive Politics. Carper, for his part, has taken in nearly $208,000 from drug makers, CRS reports.

Sen. Charles Schumer (D-N.Y.) pointed out yesterday that it was perfectly understandable that the drug makers, being publicly traded companies, would fight to preserve their profit margins for the sake of shareholders. But Congress, Schumer added, is bound to different interests. “We don’t represent their stockholders,” he said. “We represent our stockholders — the U.S. taxpayers.”

Someone please inform the Senate Finance Committee.

It was an arrangement that was immediately and sharply criticized by liberal Democrats in both chambers, who are pushing to empower the states to haggle for lower prices. And last night, near the end of the opening day discussions over an enormous health reform bill in the Senate Finance Committee, we saw just how divisive an issue it is.

When Sen. Bill Nelson (D-Fla.) introduced an amendment providing cheaper drugs for the Medicare/Medicaid eligibles — an amendment that would effectively scrap the White House deal with the branded drug lobby — Democrats on the panel couldn’t endorse it fast enough.

Sen. John Kerry (D-Mass.) came first, saying the proposal “makes all the sense in the world.” Not to be outdone, Sens. Debbie Stabenow (D-Mich.) and Charles Schumer (D-N.Y.) quickly followed, the latter arguing that the current arrangement prohibiting negotiation, enacted by Republicans in 2003, was designed “simply to put money in the pharmaceutical companies’ pockets.”

“It’s hard to imagine an argument against [Nelson's amendment] that could be made publicly,” Schumer said.

But that didn’t stop several members of the panel from trying.

Sen. Charles Grassley (Iowa), the committee’s senior Republican, said the amendment — which Nelson says would save $86 billion over 10 years — “will raise prices for people with private insurance.”

“There is no free lunch,” said an impatient Grassley. “But these people talk like there is a free lunch.” He was talking about Democrats.

And Sen. Tom Carper (D-Del.) said it “just doesn’t seem fair” that Democrats would renege on the initial bargain with the Pharmaceutical Research and Manufacturers of America, or PhRMA.

“Whether you like PhRMA or not,” Carper said, “we have a deal.”

That comment brought a backlash of its own, with many Democrats quick to point out that they never agreed to any pact with the drug makers. “Congress has a right,” Kerry said, “to make a different decision.”

Sen. John Rockefeller (D-W.Va.), an original sponsor of the Nelson amendment, noted dryly that, “There’s nothing sacred about that deal.”

And Schumer argued that breaking a deal is only unfair if you thought the original deal was honorable to begin with. “How often do we side with interest groups,” he said, “and how often do we side with the average citizen?”

To that, Grassley responded that Democrats, then, “ought to be embarrassed for your president,” who forged the bargain.

Of note, Finance Chairman Max Baucus (D-Mont.), who reportedly has agreed to the PhRMA deal, was silent throughout the lengthy exchange.

The Finance Committee, Baucus said, will vote on the Nelson-Rockefeller-Kerry-Stabenow-Schumer amendment today.

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Nuclear power is courting some new friends as it pushes for government subsidies in the sweeping climate bill being debated in the Senate.

For the last decade, the biggest players in the nuclear industry lent most of their financial backing to Republican candidates and lawmakers, who have been the strongest supporters of nuclear energy. But this year, as the Senate takes up cap-and-trade legislation to reduce greenhouse gas emissions, moderate Democrats have become the industry’s prime target.

Illustration by: Matt Mahurin

“It is the so-called Blue Dogs and the moderate Democrats who are going to tip the balance one way or the other [on nuclear incentives in the climate bill],” said Mitchell Singer, a spokesman for the Nuclear Energy Institute, a nuclear lobbying group and a leading industry donor to political candidates. “Those are the ones we feel the need to educate.”

A TWI analysis of 2009 campaign contributions by nuclear advocacy groups suggests this is indeed their strategy. This week, political action committees, which raise money for candidates, filed their monthly reports to the Federal Election Commission. The numbers reveal that the two biggest industry donors to congressional candidates, the Nuclear Energy Institute and General Atomics, made most of their contributions to Democrats, and particularly moderate and conservative Democrats.

This marks a break from recent trends. Since 2000, both groups had sent a large majority of their donations to Republicans in every election cycle. In 2007-2008, for example, even with Democrats in control of Congress, the Nuclear Energy Institute gave money to 25 Republican and 15 Democratic senators and Senate candidates. In 2009, it has donated to eight Democratic senators and just five Republicans.

Most of this year’s Democratic recipients in the Senate come from the party’s moderate wing, including Sens. Ben Nelson of Nebraska and James Webb of Virginia ($1,000 each); Evan Bayh of Indiana and Byron Dorgan of North Dakota ($2,500 each); and Tom Carper of Delaware ($3,120).

The Nuclear Energy Institute has also made the maximum $5,000 donation this year to a number of political action committees that fund moderate Democrats, including the Blue Dog PAC, Bridge PAC, Moderate Democrats PAC and New Democrat Coalition PAC. Its most recent reported donation — $500 on June 23 — was to Priority PAC, the leadership PAC of the conservative Democratic Sen. Mark Pryor (D-Ark.).

Likewise, General Atomics, which in 2007-2008 gave to 19 Republican Senate candidates ($68,000) and 10 Democrats ($41,500), this year has made donations to three Democrats ($9,000) and three Republicans ($7,500), in addition to the $8,000 it gave to the recent Republican-turned-Democrat Sen. Arlen Specter of Pennsylvania. The Democrats include the moderate Dorgan ($2,000) and the more liberal chair of the Senate Environment and Public Works Committee, Barbara Boxer of California ($2,000). General Atomics also donated $15,000 to the Democratic Senatorial Campaign Committee in January.

In the legislative debate, Republicans have pushed for expanded loan guarantees for nuclear plants and the construction of up to 100 new nuclear facilities. Many liberal Democrats and environmentalists argue that nuclear energy is expensive and slow to get off the ground, and that increases in nuclear power could come at the expense of true renewables like wind and solar.

In the middle stand the moderate Democrats — and some, such as Nelson, have provided evidence that the nuclear industry’s efforts may bear fruit. On May 25, Nelson penned a column in the McCook Daily Gazette, in which he wrote, “It makes abundant sense to include expanding nuclear energy in such legislation.” According to Nelson, nuclear power provides a third of Nebraska’s electricity.

Members of Congress routinely take money from industries that hold stakes in their respective states. Likewise, industry groups frequently target lawmakers who are likely to be sympathetic to their cause.

“These organizations aren’t doing it out of the goodness of their heart,” said Dave Levinthal, a spokesman for the Center for Responsive Politics, which compiles campaign finance data, including the figures for 2007-2008 cited here. “They’re doing it for very specific reasons.”

The Nuclear Energy Institute also lobbies, spending $580,000 in the first quarter this year, according to the Center for Responsive Politics. Singer described this lobbying effort as an educational campaign to inform members of Congress and their staffs.

“It’s kind of like going to class,” he said. “We explain the value of nuclear — what it can do and why it is needed.” He declined to specify which legislators have participated in these sessions.

Singer maintains that nuclear energy is an issue that can cross party lines, citing supportive statements from President Obama and Energy Secretary Steven Chu. “We never approach nuclear as a partisan issue,” said Singer. But he acknowledged that “a lot of Republicans are very strong supporters, particularly in states with nuclear power.”

Michael Marriotte, director of the Nuclear Information and Resource Service, which opposes the expansion of nuclear power, agrees that there is nothing overtly ideological about the nuclear debate. “Nuclear’s always been a pretty bipartisan issue on both sides,” he said. “It’s actually probably more partisan now than it’s ever been.” He added that he is puzzled by the recent staunch Republican support for nuclear power. “It doesn’t make sense from a fiscally conservative standpoint to spend billions and billions on nuclear power,” he said.

With a filibuster-proof majority in the Senate, Democrats should theoretically be able to pass their energy agenda without making concessions to Republicans. But given the relatively conservative nature of a number of Democrats — and the nuclear industry’s efforts to sway this contingent — there is a real possibility that a nuclear expansion will be necessary to bring enough “yes” votes on board.

“Everyone’s trying to figure out how to get to 60 votes,” said Marriotte. “And clearly you can’t do it without moderates. The industry is trying to make nuclear power the issue that brings over some of the moderates.”

Julie Gauthier contributed research assistance for this report.

But you’d be wrong.

Asked yesterday by Sen. Tom Carper (D-Del.) if the House-passed climate change bill contains enough funding for public transit, Transportation Secretary Ray LaHood appeared to have no opinion whatsoever. “We’ll be happy to consult with you on this,” LaHood told lawmakers on the Senate Environment and Public Works Committee. “As soon as you know what direction you want to take we’ll be there with whatever technical assistance we can provide to ya.”

It’s a curious response, if only because LaHood’s opening statement was a five-minute plea for a greater emphasis on public transit as a key component of tackling climate change. Sure, Congress will have the final say on the bill, but that wasn’t what Carper was asking. He was asking for guidance so that lawmakers would know what direction they want to take. Instead, LaHood punted, applying no pressure on the lawmakers drafting the bill.

Carper, it turns out, had good reason for choosing his question: He’s the lead sponsor of a bill that would dedicate 10 percent of cap-and-trade allowances to fund public transportation, bike paths and other green-travel initiatives. By contrast, the climate change bill that passed the House last month includes only 1 percent for public transit.

The Senate’s climate change proposal is expected for release in September.

Shuster: Why shouldn’t people believe that your decision to say a public option as backup plan — why shouldn’t people believe that it’s been influenced by the money you’ve gotten from the insurance companies and from pharmaceuticals who don’t want a backup plan, who want it as — who don’t want a public option, at all, or a backup plan as a worst-case scenario?

Carper: Well, at the end of the day, I want us to pass a bill. I want us to pass a good bill … At the end of the day, there are more important things in the bill than whether or not we have a public plan or a public option. I think the idea of what we did in the Medicare Part D plan, where we have a fallback plan on the shelf, ready to pull out if we need it, in order to make sure market forces are working, that seems to me to be a perfectly good option.

Shuster: But, Senator, you’re under a lot of pressure, wouldn’t you acknowledge, from the insurance companies, with all the money they’ve given you?

Carper: I don’t feel a lot of pressure at all. The most effective lobbyist for me — I’ve been governor; I’ve been congressman; I’ve been state treasurer; now I’m the senator — the most effective lobbyist, for me, in everything I have ever done, are actually people from Delaware that I know that I trust who talk to me, in all kinds of parades all over my state this last Fourth of July weekend, and people that call my office, mostly from Delaware, that have a view, some for public plans, some against it.

“The best way to do it,” Carper concluded, “is to develop a bipartisan plan.”

Take Sen. Tim Johnson. The South Dakotan was the lone Democrat on the banking panel to vote against the bill.

The reason? Well, officially, Johnson said the bill “goes too far in prohibiting lenders from adjusting prices to account for increased risk.” (Among other things, the bill requires companies to give 45 days notice when raising interest rates and prohibits issuers from applying rate increases to existing balances — the types of things that would prevent rates from jumping 20 or 30 percent overnight because of a single late payment.)

Yet South Dakota also happens to be a hub for some of the largest credit card operations in the country, including Citibank. Johnson is clearly protecting the regional industry here, and his opposition to the bill forecasts a tough fight ahead for reform supporters. Indeed, Delaware — another center of credit card activity — is home to Sen. Tom Carper, another Democrat with a history of protecting the industry.

As the stalled cramdown bill has shown, the finance industry has plenty of influence even when the issues aren’t regional. With two Senate Democrats already defending the industry over consumers, the race to 60 is sure to be close.

That’s significant because Democrats currently command just a one-seat advantage on the panel (11-10), and two of those Dems — Tim Johnson (S.D.) and Tom Carper (Del.) — would likely join Republicans in protecting the banks against legislation restricting, among other things, abusive fees, rate hikes and marketing practices for credit cards. (The reason is simple: A bank that’s collecting fewer late fees is a bank that’s making less money than it was the year before.) Both Delaware and South Dakota are home to major credit card operations.

It’s unclear how the panel’s party ratio will break down next year. (The race in Minnesota is still undecided). But Plunkett said the Dems could pick up two or three additional seats, which would be plenty to overcome the presumed opposition of Johnson and Carper. That spells good news for Banking Committee Chairman Chris Dodd (D-Conn.), who has a credit card reform bill written and ready to reintroduce next year. Indeed, consumer advocates are cautiously optimistic that 2009 will be the year that bill is enacted.

“It’s gonna be close,” Plunkett said.

Sen. Tom Carper (D-Del.), a close ally of Sen. Joe Lieberman, said the Connecticut Independent should pay a price for his campaign attacks against President-elect Barack Obama.

“There need to be consequences, and they cannot be insignificant,” Carper said in a Monday interview with The Hill.

Lieberman, who campaigned actively for GOP presidential hopeful John McCain in recent months, is set to make an appeal to Democratic colleagues tomorrow over his standing within the caucus. Afterwards, members will hold a secret vote to decide what repercussions, if any, the Homeland Security chairman should face.

After picking up at least six Senate seats this month, Democratic leaders next year won’t have to play the same game of catering to Lieberman out of fear that he would desert the party, thereby eliminating their slim majority in the upper chamber. Still, he’d be an important ally as Democrats try to overcome the GOP filibuster machine that killed so many Democratic bills over the past two years. That dynamic, along with Obama’s call for bipartisan comity, might leave Lieberman with just a slap on the wrist.

“I’m very disappointed as a friend and a colleague,” Carper told The Hill Monday

It remains to be seen whether disappointment will translate into ramification.