Politics

Should Rich People Be Allowed in the Democratic Party?

Sure, if they can get used to not always being the loudest voices in the room, and to the room not necessarily being a wine cave.

Buttigieg laughs while looking down at his lectern while Warren is seen in the background.
Pete Buttigieg and Elizabeth Warren at the Dec. 19 Democratic debate in Los Angeles.
Frederic J. Brown/AFP via Getty Images

Pete Buttigieg raised $24 million for his presidential campaign in the fourth quarter of 2019, his campaign announced Wednesday. That’s an enormous sum for someone with Buttigieg’s résumé—far more than U.S. Sens. Cory Booker and Amy Klobuchar have raised in any quarter of the campaign, and more than Joe Biden pulled in.

Buttigieg and his donors, though, have not been in a celebratory mood. The end of the quarter found them feeling aggrieved , misunderstood, and mistreated because of criticism they’ve been taking from others in the Democratic Party, which came to a head after the Dec. 15 fundraiser Buttigieg held in a windowless, stone-lined room at Napa Valley’s Hall Winery. That was the now-infamous event that moved Elizabeth Warren to declare, at the Dec. 19 primary debate, that “billionaires in wine caves should not pick the next president of the United States.”

Craig and Kathryn Hall, proprietors of the cave and hosts of the event, conveyed their feelings to the New York Times, which reported that they they were “frustrated” at having been “unfairly targeted.” Said Craig Hall, who attests to being one of the most liberal people in his professional and social circle: “These people don’t know who they’re talking about when they throw me in the class that they did.” A cave donor named Bill Wehrle wrote in the Washington Post that the event was a straightforward Q&A at which Buttigieg fielded earnest questions about a range of issues from people with normal-sounding professions (he cited a “former flight attendant” and the dean of a community college). “Surely,” concluded Wehrle about the fundraiser, “Democrats can find more important things to debate in the United States of America at this dark hour.”

As Hall and Wehrle asserted their right to give money to Buttigieg in a luxuriously appointed cave, so too did the candidate assert the necessity—nay, the urgency—of taking that money. “We need everybody’s help in this fight. I’m not going to turn away anyone who wants to help us defeat Donald Trump,” Buttigieg said at the debate, adding that “if I pledge never to be in the company of a progressive Democratic donor, I couldn’t be up here.” He pointed out that Warren herself is a millionaire and said that by criticizing him for listening to millionaires she is advocating a “purity test” that she herself can’t pass. Democratic heavyweight David Axelrod endorsed Buttigieg’s counterattack, tweeting that Warren had committed an “unforced error” by opening herself up to stories about having held private fundraisers during previous campaigns. (She announced in early 2019 that, like Bernie Sanders, she wouldn’t be holding them while running for president.)

Buttigieg and his defenders portray his willingness to engage with the rich as a manifestation of open-mindedness. They’re trying to recenter the wine cave controversy on the question of whether it’s fair to treat being wealthy as a fundamentally corrupting, illegitimate state that should preclude one from being allowed to have opinions and participate in democracy.

It’s a canny and perhaps even understandable approach. It treats Warren’s debate-night attack and other comments that she and Sanders have made about the donors who gain access to luxe events as appeals to envy. Warren made pointed references to symbols of wealth—“a wine cave full of crystals” and “$900-a-bottle wine”—as if to suggest she would prefer a more aesthetically flattened, drab society, its rough wooden tables topped only with plain bottles of Government Wine Product. (For what it’s worth, Hall said that while the winery does sell extra-large $900 bottles of wine, the most expensive standard bottle it has available costs $185.)

As anyone who has ever commented about reparations in a public forum knows, the concepts of collective responsibility and personal responsibility are often confused. Warren speaks frequently about fraud and corruption, and Sanders complains about a “rigged” system; if you have a top position in that system, maybe you interpret this to mean that, at best, those two candidates don’t appreciate the difficulty of what you do, and, at worst, that they think you got where you did by cheating. In November, Democratic financier Steven Rattner wrote a polemic against Warren’s candidacy for the Times; when he complained in the piece that she would limit the power of the banks and tech companies that he considers to be “America’s global champions,” one could detect a touch of damaged pride. Who is this new, mean mom who won’t put JPMorgan’s and Apple’s earnings reports on the national refrigerator?

It might be true that many of the donors who attended the wine cave fundraiser did so without expecting that the Buttigieg administration will owe them a favor and that they earned their money without lying or stealing. But as the Intercept documented last week, there are questions about whether Craig Hall counts as such a person: He was once a major donor to Democratic Speaker of the House Jim Wright, who resigned from Congress in 1989 in part because it was discovered he’d privately asked staffers at a federal agency to restructure loans that Hall was having trouble paying. In 1992, Hall filed for bankruptcy, and in 1993, he paid $100 million to settle federal allegations that a savings and loan business he owned had engaged in “improper loan practices”; the federal government paid $364 million to depositors who lost their money when Hall’s company went under.

But Warren’s comment at the debate wasn’t just about the personal ethics of individuals like Hall. It was also about the ambient process by which fundraising elevates certain status quo positions—and benefits the business models of the companies that major donors work for—while discouraging policies that would benefit less-connected voters.

Consider the subtle evolution of Buttigieg’s position on health care. Ever since he entered the race in early 2019, he has consistently been proposing a “Medicare for all who want it” public option system, which could create a “glide path” to a single-payer world in which the government finances all treatment. Yet initially, as in this response to a March CNN town hall question, he presented this position as a break from the dysfunctional current system, discussing how waste and bureaucracy could be eliminated from American health spending, and praising Medicare for preventing medical bankruptcies:

You know, we as a country pay out of our health care dollar less on patient care and more on bureaucracy than almost any other country in the developed world. And so it’s very clear that we’ve got to do some unglamorous technical work. Actually, some of the benefits of automation could come in this sense. You think about how many hands have to touch a prior authorization sometimes. And the right answer to that should be zero, but we’re not there yet. So we’ve got to do that, that kind of unfashionable technical work within [Centers for Medicare and Medicaid Services] to make the system more efficient.

We’ve also just got to broaden access to it until everyone has health care. I just refuse to accept that when citizens of just about every developed nation in the world enjoy this, that we should settle for less.

And it’s become very personal for me, too, because we lost my father a few weeks ago. And it was to cancer. It was a brutally difficult time for our family. I make decisions for a living, and I was not prepared for some of the decisions that we faced in consultation with the medical team.

But what I’ll say is, the decisions that we made only had to be about what was medically right for dad and what was right for our family. We didn’t have to think about whether our family would be financially ruined, because of Medicare. And I want that to be available, that kind of security, that kind of freedom, frankly, to be available to every American.

Since that time, Buttigieg has refigured his pitch. Now, the contrast he emphasizes is not against the failures of the existing insurance system, but against the more aggressive proposals by Sanders and Warren that would immediately (Sanders) or eventually (Warren) outlaw private insurance. He’s also taken a number of campaign donations from health industry executives—23 of them gave him $1,000 or more in the third quarter, a group that appears to include Kaiser Permanente vice president Bill Wehrle. A health care industry coalition, the Partnership for America’s Health Care Future, has spent $1 million on TV, radio, and social media advertisements attacking all Democratic healthcare initiatives, from Medicare for all through Buttigieg’s public option, as creating “a one-size-fits-all system.”* Now Buttigieg’s glide-path pitch has disclaimers about the benefits of private plans and the importance of being able to choose private insurance if you want to. Here he is on PBS in November:

Look, I think that the Medicare-like public plan we’re going to create is going to be the best option for most Americans. And if I am I’m right about that, then most Americans will choose it, until, eventually, it is the single-payer. It will be the glide path to Medicare for all.

But, crucially, if it is the case that, for some Americans, the private plans they have are better, we’re going to be really glad we didn’t force them off of those private plans.

And, in particular, I have been talking lately to a lot of union members who are happy with the private plans that they negotiated for, fought for, sometimes gave wage concessions in order to gain. Why kick them off of those plans, when we can let people choose?

It’s a convergence of interests: On one hand, there’s a candidate who, perhaps through conviction and judicious reflection, has concluded that the private health insurance industry should not be legally eliminated. On the other, there are people who are well-compensated for their work in that very profitable industry—Bill Wehrle wrote in his op-ed that he wasn’t a millionaire, but the Washington Post had to correct that claim after finding out that he has a $3.7 million house—who are able to elevate that candidate’s message and maintain his campaign financially.

Buttigieg and his backers have succeeded in making the Democratic discussion of health care about protecting “choice” for those who already have insurance, rather than creating universal coverage for those who don’t. The shift reflects concerns that some (but not all) Democratic voters have about single payer, but it also works to the advantage of insurers who benefit when the possibility of being switched off private insurance onto a single-payer plan becomes conflated with the possibility of being “kicked off” insurance permanently. Not every voter concerned about retaining his or her current plan, meanwhile, might be aware that having coverage doesn’t always prevent Americans from going bankrupt because of surprise bills and/or the accumulated out-of-pocket costs of treating chronic disease. And as New York magazine’s Eric Levitz observed, any public option strong enough to attract millions of Americans would be financially troublesome for the private insurance industry (and thus disruptive for its current customers) regardless of whether it was part of a bill that formally outlawed private plans.

That’s why Buttigieg’s friendly relationship with Big Health Care is more than just a primary positioning issue. Candidates who are elected with the help of executives and lobbyists, and who allocate valuable time toward fundraisers and phone calls with major donors, become elected officials who have good ongoing relationships with executives and lobbyists. One reason there isn’t already a public option is because then–Connecticut Sen. Joe Lieberman wouldn’t support one during 2009 negotiations over the Affordable Care Act; Lieberman was a longtime recipient of large pharmaceutical- and insurance-sector campaign donations, and his wife had worked as a consultant on health policy issues for two major corporate lobbying firms. A recent attempt to eliminate surprise out-of-network bills failed in Congress, BuzzFeed News reported, because it was torpedoed by the powerful and notoriously lobbyist-friendly Democratic Massachusetts Rep. Richard Neal.

The industry’s support for a public-option Democrat would likely take its own “glide path,” post-election, into a lobbying campaign to prevent the creation of a public plan meaningful enough to appeal to individuals who are currently insured. (Earlier this year Washington state passed a law that will create a state-level public option plan; Kaiser Permanente, Wehrle’s company, opposed the law.) Why would any Democratic voter familiar with recent history believe that an elected official who was financially friendly with the health care industry wouldn’t side with it at patients’ expense?

The fundraising limitations Sanders and Warren are working under protect them from these conflicts of interest. They don’t preclude an alliance with fiscal moderates on subjects like climate change and racial extremism, and in fact they won’t prevent the two progressives from running well-funded campaigns. They’ve led the Democratic field in overall fundraising, and on Wednesday night, Sanders announced that he raised $34 million in the fourth quarter, nearly 50 percent more than Buttigieg. Both he and Warren have even received tens of millions of dollars from so-called big donors—they’ve just done it without deferring to the Wall Street/Silicon Valley consensus about the proper relationship between government and the private sector.

Buttigieg has nevertheless taken advantage of an opening Sanders and Warren’s rhetoric has created. He saw the potential in appealing to people like Hall and Wehrle who interpret critiques of the country’s economic hierarchy as attacks on their personal identity, and who respond to complaints about their disproportionate influence with the same kind of defensiveness triggered in other contexts by the concept of “white privilege.” If Trump is the candidate of white resentment, Buttigieg is the candidate for the wounded upper-class liberal.

Now this cohort feels so picked on and excluded that it has been able to recast the primary as a referendum on those feelings. But financial services professionals, high-end lawyers, consultants, and corporate executives have been in the driver’s seat of the Democratic Party since Bill Clinton’s time, and the results for everyone else have been underwhelming. If it’s divisive to acknowledge this, then maybe it’s time to work on creating a less divisive set of underlying facts.

Correction, Jan. 3, 2020: This sentence described the PAHCF’s ads as “boosting” Buttigieg’s candidacy, but the group has also attacked buy-in and public-option health coverage plans such as his.