What big donors would like to hear in the State of the UnionBy Bill Allison, Caitlin MacNeal and Jake Harper Feb 12 2013 11:02 a.m.
Though we can't predict the rhetorical tropes--not the thematic structure or the memorable lines or phrases that will fall flat--a look at the world of influence might tell us some of the issues President Barack Obama will touch on in his fourth State of the Union address. If a part of politics is rewarding your friends while giving your opponents good government, then the 2012 contest--which featured history's first billion-dollar presidential campaign (Obama's), first billion-dollar-plus outside spending campaign, plus oodles of special interest cash flowing to congressional candidates--leaves a lot of ground to cover.
Sunlight combed through campaign contribution records, lobbyist registrations and other sources, looking at the agendas of Obama's political supporters and antagonists. Based on that analysis, here are a few items that might come up, and others that might be discreetly passed over:
From schools to scandal: Four of Obama's top ten donors were employees, or family members of employees, of institutions of higher learning: the University of California, Harvard, Stanford and Columbia. Overall, the education sector gave Obama more than $21 million, third highest among sectors tracked by the Center for Responsive Politics, and favored Democrats over Republicans by 3 to 1 in the 2012 cycle. Among the issues that the four universities lobbied on were federal appropriations including research and development budgets, student loan programs, Pell grants and the sequester. Obama's predecessor, President George W. Bush, rarely mentioned higher education in his State of the Union addresses (he focused instead on reforming public schools). But in February 2009, in his address to Congress, Obama declared, "[E]very American will need to get more than a high school diploma," and has been pushing greater access to college, more funding for education assistance and a public takeover of the student loan market. He's also called for lower tuition and a better performance from institutions of higher learning.
He might not be as eager to mention that student loan debt has risen to $1 trillion, while delinquencies in the loans of those who graduated in the past two years has risen to 15 percent, according to a study by Fair Isaac Corp, a consumer credit rating agency better known as FICO, as reported in Bloomberg News. And some schools, including Ivy League universities Yale and Penn, are suing former students who borrowed money from a federal program that benefits the needy, then couldn't find jobs when they graduated.
Balancing act: Another group interested in the sequester, one that contributed heavily to Obama's campaign, are federal government employees. Those listing "US Government" as an occupation were his fourth biggest source of funds. Add in the more than $680,000 that came from employees and their family members of the Departments of Justice and State, and federal employees climb to the top spot on Obama's donor list. Over all, public officials and civil servants gave his campaign nearly $8.4 million. That may be one reason why Obama has been trying to avert the sequester, a bit of budget legerdemain passed in the summer of 2011 that calls for across the board spending cuts unless Congress and the administration agree to an alternative plan. Obama recently said the country can't "cut our way to prosperity." And in his radio address last Saturday warned of thousands of jobs that would have to be cut.
While Obama will almost certainly address the deficit and may even make a nod to entitlement reforms in the future, his priority will be averting the cuts which come March 1.
The fellow behind the tree: Obama has called for substituting a balanced approach to the sequester, including spending cuts and more revenues by closing tax loopholes that favor the wealthy and corporate interests. He recently singled out the tax break for carried interest that lets hedge fund operators and venture capitalists pay a much lower tax rate--just 20 percent--on their earnings. If they were reclassified as ordinary income, the top tax rate for the lords of finance would be 39.6 percent, or nearly twice as much. Obama did get some support from the world of hedge funds and private equity. For example, among the top donors to Priorities USA Action Fund was James Simon of hedge fund Renaissance Technologies--he gave $5 million; Stephen Robert of the same firm chipped in $1 million. But contributions from private equity managers, hedge fund operators and others in the securities and investment industry overwhelmingly favored Obama's opponent, Mitt Romney, and Republicans over Democrats by a 7 to 3 margin.
One thing the president is not likely to mention is a tax loophole included in the last minute legislation that averted the so-called fiscal cliff, or the expiration of all the individual income tax cuts enacted during the Bush administration and extended two years by Obama at the end of 2010. Among the many tax breaks for special interests included in that measure was a production credit for Hollywood studios that will drain about $320 million from the Treasury, according to the Joint Committee on Taxation. Time Warner, Walt Disney and Comcast, now a huge producer of content thanks to its acquisition of NBC/Universal, were all among Obama's top 20 donors, and the industry gave his campaign $6.9 million--the ninth highest total. And, of course, Dreamworks Animation head Jeffrey Katzenberg was a bundler for Obama and gave $3 million to Priorities USA. Overall, the entertainment industry has favored Democrats about 7 to 3 over Republicans--the mirror image of the securities and investment donors.
Frenzied finance: Look for a mention of how free market economies need oversight and regulation, as in some of the laws those passed during Obama's first term. The president might even tip his hand to newly-elected Sen. Elizabeth Warren, D-Mass., the architect of one of the bill's key elements, the Consumer Financial Protection Board, set up to oversee Wall Street. The top five donors to Romney--Goldman Sachs, Bank of America, Morgan Stanley, JPMorgan Chase & Co. and Wells Fargo--all disclosed lobbying on Dodd-Frank in 2012, data in Influence Explorer shows.
What the president is less likely to mention: His Justice Department's less than robust pursuit of those whose actions led to the financial meltdown. In 2008, in Obama's first run for president, Goldman Sachs, CitiGroup and JPMorgan Chase & Co. were among his top donors. And the New York Times reported that Jon Corzine, the former New Jersey Senator, Governor and Obama campaign bundler, likely won't face criminal charges for his role in the collapse of MF Global, a firm he headed that illegally raided $1 billion from customer accounts in an effort to avoid bankruptcy.
Cooling coal: Obama reportedly will push for new controls on greenhouse gases, and may use his executive authority to issue regulations on existing plants, forcing utilities to shut down their coal-fired generators and switch to plants that use natural gas. Those in the coal mining industry gave more than $908,000 to Romney's campaign, and less than $6,100 to Obama. And the energy sector -- often the chief complaint of environmental activists -- gave disproportionately to Romney: $9.7 million, compared to Obama's $2.4 million. Overall, the energy sector--oil and gas, utilities, coal mining and related industries--favored Republicans by a 4 to 1 margin.
One sector of the energy industry that bucked that trend was alternative energy, which supported Democrats by a 3 to 2 margin and gave an
The politics of guns: Some news stories report that Obama will surely mention include the massacre at the Sandy Hook elementary school in Newtown, Conn., where a gunman killed 20 children and 6 adults, and the tragic death of Hadiya Pendleton, a 15-year-old who performed at Obama's second inauguration and died in a shooting in Chicago. Obama will likely discuss legislation to control some of the deadlier firearms and their accessories, seeking to strengthen gun control measures. One of the top spenders against Obama in his bid for a second term was the National Rifle Association — the NRA's super PAC and its Institute for Legislative Action combined made more than $10 million in independent expenditures opposing Obama. Several Democrats plan to bring victims of gun violence to the State of the Union Address. And Hadiya Pendleton's parents will sit with Michelle Obama during her husband's speech.
Nation of immigration: No State of the Union address would be complete without touching on the challenges and tragedies the nation faces, but they are also aspirational, speaking more to our hopes for the future. And perhaps nothing is so aspirational in our culture as the immigrant experience--of people who leave their homes and all they know to begin anew in the United States, seeking a better life. Plans to reform of the nation's immigration laws, including pathways to citizenship for those who don't have legal status in the United States, have been kicking around Congress, and Obama will no doubt use his address to set down his own priorities for reform.
Those aren't always about the poor, huddled masses yearning to breathe free: Tech giants Microsoft and Google ranked high on Obama's list of donors in the 2012 cycle, with a combined $1.6 million in contributions. The two lobbied on immigration reform, focusing specifically on the Fairness for High-Skilled Immigrants Act, which would increase the number of immigrants that can come from a given country depending on applicants' training and experience. Though his administration has deported a record number of undocumented immigrants, Obama supported immigration reforms including the DREAM Act, which would have allowed people who were brought as children illegally and raised in the United States to stay if they graduate high school or enlist in the military. He is expected to go much further than that tonight in backing a major overhaul of America's immigration laws.
He will be less likely to mention another issue near and dear to his tech supporters' hearts: keeping the Internet as open as possible. Both firms lobbied against the Stop Online Privacy Act and the Protect Intellectual Property Act (better known as SOPA and PIPA), measures that were proposed in 2011 that would have forced Internet service providers and search engines to block access to websites if they were suspected of copyright infringement. The hi-tech's sector opposition to the measures conflicts with the entertainment industry's support, putting Obama in an awkward position. Don't expect intellectual property to be mentioned.
Donors with benefits: What's not as apparent is whether Obama will reiterate his support for gay marriage, something he first stated in 2012 after his vice president, Joe Biden, announced the shift in his position was coming. Obama raked in $9.8 million from advocates of gay marriage. Romney? Just $19,000. Obama targeted the gay community for his fundraising efforts in 2012. An analysis from the Washington Post revealed that one in six of his bundlers were gay, and the First Lady asked a group of LGBT donors to max out their donations to the campaign during the Democratic National Convention. With that kind of support, it's possible the issue of gay marriage may make an appearance on Obama's teleprompter Tuesday night.
Dealing a wildcard: The biggest donor we know of, casino mogul Sheldon Adelson combined with his wife to give more than $98 million to groups that directed much of his largesse to defeating Obama. Adelson has said that one motivation for his giving was his experience with a Justice Department investigation of his overseas casino operations, and whether employees of his had bribed foreign officials--illegal under the Foreign Corrupt Practices Act. If Obama mentions strengthening oversight of corporations, both in the U.S. and in their overseas dealings, it may well be that Adelson got under his skin.
Republicans strike back: The GOP picked an up-and-comer, Florida Sen. Marco Rubio, a tea party favorite, backer of immigration reform and most likely a 2016 presidential candidate. His top donor in 2010, his first run for the Senate, was the Club for Growth, whose members contributed more than $353,000 to him. American Crossroads and Crossroads GPS combined to spend more than $1.9 million supporting Rubio. Like many of the super PACs who spent tens of millions of dollars to defeat Obama in 2012, the Club for Growth favors lower taxes, fewer regulations and smaller government. While there are differences among them, all three groups oppose raising taxes and support reducing government spending--expect Rubio to push this program by talking about opportunity and rebuilding the American economy and middle class.
Of course, for Rubio, the Republican response will be the first test high profile test should he run in 2016, and no doubt a chance to excite his donor base. And unlike the 43 other men who have reported to Congress on the State of the Union, it's a chance for Obama to do the same. His campaign--now under the aegis of Organizing for Action--is also accepting donations.
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