Reagan Defunded the Democratic Party in 1981: It's Time to Return the Favor

Forty years ago this month, Reagan and his buddies decided they'd strip the Democratic Party of most of its funding. And their audacious plan worked.

Now that Democrats control Congress and the White House, they have an opportunity to turn the tables and defund the Republican Party with six simple steps.

First, some background.

In the 1970s, the Democratic Party was principally funded by working-class people through America's labor unions, and the Republican Party got most of its money from big business and wealthy individuals.

America's political system got a major shake up in 1976 and 1978: The US Supreme Court ruled in two cases those years that when billionaires or giant corporations owned politicians, that was no longer considered "corruption" or "bribery" as it had been since the founding of our republic.

The wise conservatives on the US Supreme Court ruled in the Buckley and Bellotti decisions that when rich people or corporations showered their favorite politicians with cash, that money wasn't actually "money." Instead, the Court ruled, that cash was actually "speech," and pouring cash down a politician's throat was simply First Amendment-protected "free speech."

These two decisions, the second written by Lewis Powell himself, unleashed a tsunami of corporate and billionaire* cash that flowed into the GOP in the late 1970s and floated Ronald Reagan into office in 1980. (SCOTUS conservatives, over the loud, unanimous objections of the Court's Democratic-nominated justices, doubled-down on these decisions with Citizens United in 2010.)

In the 1970s Democrats got most of their funding from working-class Americans via their labor unions, so the Party didn't take much notice then of those two decisions that opened up politics for rich people and corporations. The unions were so awash in money that a few corrupt union bosses were even skimming some off the top.

So when Reagan became president, he set out to destroy the Democratic Party's main source of funding: labor unions.

Following the example of his role model, Margaret Thatcher, who just two years earlier had destroyed the United Kingdom's largest and most politically powerful labor union (the coal miners), he took down PATCO, the air traffic controller's union, and did it in less than a week in 1981.

The following twelve years of the Reagan/Bush administration's war on America's middle class so completely gutted labor union membership that in 1992 Bill Clinton and Al Fromm had to reinvent the DLC to work as a funnel to bring corporate money into the Democratic Party.

Tragically, Reagan's biggest victory in this anti-union effort was changing the very nature of the Democratic Party from FDR's New Deal and LBJ's Great Society party into Bill Clinton's corporate-friendly DLC/New Democrat party, burrowing deeply into bed with big banks, insurance companies, and the emerging tech industry.

In the past decade or so, however, Democrats from Obama to Sanders to Warnock/Osoff have shown that Democratic candidates can once again get their funding from working-class people, this time through online donations rather than just via labor unions. (The Republicans, of course, are still funded by billionaires and giant corporations.)

Which presents today's opportunity.

For Democrats to defund the Republican Party, all they must do is put into place a few straightforward "good government" steps, all things that should happen in any case:

• End Red State welfare. Kentucky gets $2.41 from the federal government for every tax dollar they send to Washington DC, giving Mitch McConnell billions in blue-state tax money to shower on his voters and maintain his power. Most other Red States are similarly "taker" states, so let's fight for a law limiting states to no more than $1.50 for every dollar they send to DC in tax revenues. Call it Welfare Reform!
• End corporate welfare that gets recycled to GOP politicians. This includes $600 billion a year to fossil fuel companies, about a trillion a year we give to Big Pharma (including forbidding Medicare from negotiating drug prices), and government subsidies to insurance companies like the "Medicare Advantage" scam that puts individual seniors and the entire Medicare system at risk.
• End corporate monopolies that fund the GOP. Break up giant corporations and make America safe again for small businesses while rejuvenating local economies. From airlines to tech to banking and retail, giant monopolies rip off working class Americans to the tune of an average $5000 per-family per-year, and use some of that money to fund Republican politicians. (When Nixon initiated the breakup of AT&T into 7 regional companies, it actually increased shareholder value and led to an innovation explosion.)
• Bring back Eisenhower's 91% top tax bracket to restore the middle class that votes Democratic. America's strongest economy was 1950 to 1980, with a top tax bracket of 91% to 74%. We built highways, schools, hospitals, and put men on the moon. CEOs averaged only 30x the pay their employees took. Reagan cut that top bracket to 25%, and the billionaires it produced now pour cash into the GOP.
• Impose Elizabeth Warren's 2% tax on great fortunes and use it to fund healthcare and education for working-class Democratic voters. Average Americans pay a wealth tax every year: the property tax on their largest store of wealth, their homes. That annual wealth/property tax pays for schools, libraries, police, fire and other essential infrastructure. Billionaires should pay their far share through a similar annual tax on their money bins and other investments.
• Reverse Citizen's United to end the GOP's campaign money from corporations, SuperPACs and billionaires' ability to skew our politics. We did this in the 1970s after the Nixon bribery scandals, but the Supreme Court blew it up, saying that money was speech. There are multiple ways around that, and the Democratic Party should make this job one. (HR1 is a great start!)

Not only will these steps re-balance the money/power equation between Democrats and Republicans, they'll be good for average working people and bring back a government that works for all Americans.

*In today's dollars.

-Thom

Originally posted on Medium.com