Wall Street Walks as Defense, Tech Back Obama’s Campaign
Health care, telecommunications and defense industry workers are fueling President Barack Obama’s re-election campaign, even as Wall Street walks away from his candidacy.
People who work in those industries donated to Obama in 2008 after helping to bankroll President George W. Bush’s re-election campaign in 2004, according to the Center for Responsive Politics, a Washington-based research group that tracks campaign donations.
“It’s a sign that incumbents really attract a lot of money,” said Bill Allison, editorial director of the Sunlight Foundation, a Washington-based watchdog group that tracks money in politics. “Obama’s in the White House right now. The way you try to influence the administration is by giving to his campaign.”
Democratic consultant Peter Fenn, who participates in a weekly conference call with Obama campaign officials, said the president’s budgets haven’t called for massive cuts in defense spending, although a deal struck to raise the debt ceiling last year could lead in January to more than $500 billion in automatic cuts during the next decade if Congress and the administration don’t reach a new agreement.
The telecommunications industry has received broad support from Obama, whose stimulus bill included $6.9 billion to expand high-speed wireless Internet access.
“The wireless revolution provides great promise for America’s future economic prosperity,” declared the February 2011 White House report, “A Strategy for American Innovation.”
As for health care, the administration worked with stakeholders such as drug companies and hospitals in developing his plan and “they’re comfortable with Obama’s policies,” Fenn said.
Checks from those workers have helped Obama out-raise his Republican challenger, Mitt Romney. The Democratic incumbent brought in $356.5 million through July 31, compared with $197 million for Romney, a former Massachusetts governor, Federal Election Commission reports show.
Both Obama, with high-tech and Hollywood, and Romney, with agriculture and energy, have drawn financial support from industries that traditionally support their parties. Obama has also received the financial support of employees in several industries who first backed him in 2008 over Republican nominee John McCain even as they preferred Bush in 2004 over Democratic presidential nominee John Kerry.
For example, the $9.7 million that Obama has raised from employees in the health, telecommunications and defense industries through July 31 compares with $6.9 million for Romney. In 2004, those industries gave $13.2 million to Bush and $8.2 million to Kerry.
The contributions come from executives and employees working in the sectors; not corporate headquarters.
“Obama has a broad appeal,” Republican consultant Eddie Mahe said. “They’re staying with him. Who they’re employed by does not dramatically impact those attitudes.”
Obama’s health-care law is intended to provide insurance coverage to more than 30 million Americans without it and is modeled after legislation Romney successfully championed while governor of Massachusetts. Romney has vowed to do away with the federal law and his running mate, Representative Paul Ryan of Wisconsin, has voted to repeal it.
House Republicans have passed Ryan’s proposal to end traditional Medicare for those now under 55 and instead provide vouchers to either buy private insurance or enter a government program with a cap on expenditures. The bill also cuts federal funding for Medicaid, the health-care program for the poor.
“There is high anxiety about what the Romney plans would look like or what the Romney deficit reduction would do to the health-care industry,” said Dan Mendelson, chief executive officer of Avalere Health LLC, a Washington research company. “When you think about the levels of reduction in spending that would be required to move toward a truly balanced budget, it gives health-care executives a shiver.”
Defense companies face spending reductions under a deficit- reduction plan that Ryan voted for and Obama signed into law. The legislation provides for automatic spending cuts of $1.2 trillion over a decade, half from defense, unless Congress and the White House agree on another way to reduce the deficit.
Defense analyst Bryon Callan of Washington-based Capital Alpha Partners LLC said defense workers have two reasons to back the incumbent: Many are members of unions and the president hasn’t sought to gut the Pentagon’s budget.
“The Obama administration has not been bad for the defense industry,” Callan said. “There haven’t been any big program kills. People are considering this along traditional party lines.”
Telecommunications industry employees have given Obama more than twice as much in donations as Romney, even as the administration successfully challenged the proposed merger of AT&T Inc. (T) and T-Mobile USA, and Obama’s Federal Communications Commission chairman, Julius Genachowski, proposed rules to prevent Internet service providers from interfering with customers’ Web traffic.
Obama “has a focus on tech issues in terms of trying to grow the pie overall, which may be viewed favorably by telecom workers,” said Paul Gallant, a telecommunications analyst with Guggenheim Securities LLC, part of Guggenheim Partners LLC that is headquartered in New York and Chicago. “Part of the story has to be these companies are partially unionized as well.”
AT&T employees are backing Obama, giving him three times as much as Romney, $103,776 to $30,400.
The one industry Romney has wrested from Obama is Wall Street. Employees in the securities and investment industry contributed $15.8 million to Obama in 2008 compared with $9.2 million to McCain. This time around, industry employees have donated $11.5 million to Romney, the co-founder of the Boston- based private equity firm Bain Capital LLC, and $4.2 million to Obama.
Obama pushed through legislation to regulate the financial industry, blaming it for contributing the biggest economic downturn since the Great Depression.
“There is a core group of people on Wall Street who are Republicans and there is a core group of Democrats,” said former UBS Americas Chairman Robert Wolf, who raised more than $500,000 for Obama in both 2008 and 2012 and is chief executive officer of New York-based 32 Advisors LLC. “Everyone’s campaigning for the middle. Some have gone to the Romney side and some have stayed on the Obama side.”
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