Moderate Dems flex muscle, push liberal agenda to center

March 15, 2009 at 12:00a.m.

WASHINGTON (AP) — Moderate Democrats in Congress who built their ranks in November’s elections are nudging their party’s liberal agenda to the center, working to add a pro-business dose of pragmatism to President Barack Obama’s plans to rescue homeowners, overhaul health care and revamp energy policy.

With close ties to industry and a keen understanding of how markets work, these Democrats have taken an increasingly influential and visible role in debates over federal spending and housing. They also have powerful allies in the White House. Obama told the House’s band of New Democrats during a meeting last week that he considered himself one of them, according to several attendees. His chief of staff, former Rep. Rahm Emanuel, is one of their most prominent alumni.

Among recent signs of their clout:

UThe 68-member New Democrat Coalition temporarily sidelined a measure to let bankruptcy judges rewrite mortgages. They held out for limits on court-ordered easing of mortgages, a move lenders were demanding.

UA few centrist Senate Democrats helped slow passage of a $410 billion spending bill because of its cost.

“This is a healthy reprise [of] what we had in the Clinton administration. We were go-to people on the pro-growth area and on balancing the budget, and on making sure that we were competitive in the trade environment,” said California Rep. Ellen O. Tauscher, head of the New Democrats.

They can withhold them too, forcing Democratic leaders to bow to their demands. They demonstrated that two weeks ago when House leaders canceled votes on the bankruptcy loan modification bill, which Obama backs, because of concerns among the moderates about how it could affect homeowners struggling to make their monthly payments.

The measure got back on track and passed only after the New Democrats won changes that could make it more difficult to qualify for a loan rewrite in bankruptcy.

In the process, the moderates took heat from liberal activists who called them “corporatists” working on behalf of banking lobbyists instead of their constituents. Tauscher, a former Wall Street investment banker, said she hasn’t met with a banking lobbyist in months.

In the Senate, a more loosely affiliated group of Democratic centrists led by Sens. Evan Bayh of Indiana, Tom Carper of Delaware and Blanche Lincoln of Arkansas plans to launch its own coalition in the coming weeks. The group of about 15 could be a critical voting bloc as Senate Democratic leaders, with a 58-41 working majority that includes two independents, search for the elusive 60 votes necessary to advance most legislation beyond the minefield of procedural hurdles.

In the House, New Democrats aim to play a leading role on expanding international trade and overhauling health care and energy policy. Already, they have been active pushing technology initiatives embraced by Obama, including funding the creation of a “smart,” energy-efficient electricity grid and new incentives to switch doctors to electronic record-keeping.