The New Democrats, periodically labeled Moderate Democrats by pundits, are a center to center-left and liberal faction within the United States Democratic Party. They are seen as culturally liberal on social issues while being fiscally conservative on certain economic issues. New Democrats dominated the party from the late 1980s through the early-2010s and continue to be a large coalition in the modern Democratic Party.

With the rise of progressivism in 2016 and 2020 amidst the presidential campaigns of Bernie Sanders, and that of the right-wing populism of Donald Trump, Debates over tax cuts on capital gains have been reconfigured to removing caps on state and local tax deduction (SALT).

In 2024, at least two out of nine freshmen in the Congressional Progressive Caucus planned to also hold seats in the New Democrat Coalition (NDC), joining an additional twenty-two House Democrats who similarly claimed membership in both caucuses. The NDC lost approximately five members, yet gained twenty-three, reestablishing the coalition as the leading Democratic partisan caucus in Congress.

Brad Schneider, who spearheaded "plans" and "proposals" for SALT deduction caps as NDC platform planks, is NDC chairperson in the 119th United States Congress. Schneider endorsed Sharice Davids, his former rival for NDC chair, as Honorary Chair of the NDC ReNew Democracy Foundation (distinct from the Renew Democracy Initiative). In the aftermath of the 2024 United States presidential election, New Democrats raised concerns about increasing numbers of CPC members joining the NDC, but did not address the reverse happening to the CPC prior to the election.

History

Origins

During the 1970s energy crisis, the United States faced stagflation, that is, both increasing inflation and decreasing economic growth. The 1974 midterm elections, according to historian Brent Cebul, "are remembered for the arrival of the 'Watergate babies' in the House of Representatives, but the New Democrats' first electoral wave was broader and deeper still...some western and northeastern officials like [Michael] Dukakis were dubbed Atari Democrats thanks to their veneration of new, entrepreneurial, high-technology sectors of the economy. This group, which included [Gary] Hart and California Governor Jerry Brown, also sometimes called themselves 'New Liberals' in an effort to signal their support for traditional liberal social values even as they pursued market-oriented and perhaps less bureaucratic ways of governing." Another "primary strand" could be found in "the South, often as self-consciously 'centrist' Democrats. Led by politicians like Georgia Senator Sam Nunn, the southern centrists echoed southern Democrats of the past in their skepticism for targeted welfare or antipoverty programs, and they also looked forward to stimulating the region's post-industrial and 'post-racial' future."

The Watergate Babies and Atari Democrats found a common thread in what historian Brent Cebul describes as twentieth-century "supply-side liberalism", an antecedent to the fiscal ideas of 21st-century "supply-side liberals, or supply-side progressives." This ideology, derived partly from their consultations with partisan boll weevils, ultimately proved a fiscal illusion. Cebul further contends that "Michael Dukakis and Jerry Brown, for instance, both appropriated property taxes to subsidize a given startup company in depressed industrial sectors. This subsidization transformed state tax revenue for public finance into venture capital. Once the first wave of startups achieved normal profit, then the tax burden for additional start-ups would shift from real estate investors and homeowners to the initial companies. Brown and Dukakis also planned on allocating revenue from the new taxable capital to "infrastructure and education." According to Cebul, one of the "mistakes" of twentieth-century "supply-side liberalism", an unwillingness to propose "certain types of progressive regulations along with those subsidies", could be avoided by twenty-first century "supply-side liberals." During the Jimmy Carter and Ronald Reagan Administrations, voter tax revolts and the Volcker recession, coupled with uneven profit thresholds for taxing scaled-up companies, hastened the shift in tax burden to the entire first wave.

Even if absent from partisan politics for one or more election cycles, "supply-side liberals" could and did campaign to reconcile "job and tax generation with the market-oriented ethos of the 1980s" during reelection bids. Once back in office during the early 1980s recession in the United States, Dukakis and his cohort incrementally diverged from "supply-side liberalism" as it operated prior to the tax revolts. Beginning in 1982, for instance, Dukakis altered the role of his Massachusetts Technology Development Corporation (1978) from tax revenue distribution to "broker[ing] deals" between "high-tech companies and Boston-based venture capital firms." This gradual change diminished his own role in the ensuing Massachusetts Miracle, a cornerstone of his campaign during the 1988 United States presidential election. Conversely, 1980s changes later became key tenets of New Democrat platforms.

Democratic Leadership Council and Progressive Policy Institute

After the landslide defeats by the Republican Party led by Ronald Reagan and George H. W. Bush, a group of prominent Democrats began to believe their party was out of touch and in need of a radical shift in economic policy and ideas of governance. The Democratic Leadership Council (DLC) was founded in 1985 by Al From and a group of like-minded politicians and strategists. Prominent Democratic politicians such as Senators Al Gore and Joe Biden (both future vice presidents, and Biden, a future president) participated in DLC affairs prior to their candidacies for the 1988 Democratic Party nomination. The DLC did not want the Democratic Party to be "simply posturing in the middle", and instead framed its ideas as "progressive" and as a "Third Way" to address the problems of its era. Examples of the DLC's policy initiatives can be found in The New American Choice Resolutions.

In 1989, the "New Democrat" label was briefly used by a progressive reformist group including Gary Hart and Eugene McCarthy. That same year, Will Marshall founded the Progressive Policy Institute (PPI) as a think tank to formulate a new common platform for Yellow Dogs, Atari Democrats, and Watergate Babies. In 1990, the DLC renamed its bi-monthly magazine from The Mainstream Democrat to The New Democrat. The PPI, in conjunction with Arkansas Governor Bill Clinton and the DLC, subsequently introduced tentative precepts collected in a New Orleans Declaration. By 1992, "New Democrats" had become more widely associated with this declaration, as well as Democratic partisans who entwined presidential hopeful Jesse Jackson's variant of Rainbow/PUSH with the Sister Souljah moment.

Aspirations for "supply-side liberalism" had been rebuffed by voters and state auditors alike. According to Cebul, the rechristened "New Democrats" espoused "a reflexive veneration of the market as the essential underwriter of social progress". They first sought to accelerate capital and money coursing through a post-industrial economy. The PPI and DLC forecasted financial deregulation and tax cuts as avenues to facilitate the expansion of scaleup companies invested in computational and internet technology. These companies would provide the venture capital necessary to pave over ailing industrial regions with post-industrial start-ups. The role of government was to remove any perceived obstacles. Heeding the lessons of tax resistance, the New Democrat think tank and leadership council also aimed to reduce the federal deficit and interest rates, while expanding the mortgage-backed security industry and credit market for a real estate sector that had roundly rejected property taxes. The voters who had stymied "supply side liberalism" would become a New Democrat vanguard.

Bill Clinton, the DLC chairman who referred to the PPI as his "idea mill", faced a peculiar dilemma. He had to somehow circumvent voter preconceptions of financial deregulatory laws and capital gains tax reductions as antithetical to "social progress", while concurrently accepting the duty of the largest party plurality, namely to advance the mid- to late 20th-century Democratic partisan goal of "social progress." Cebul and additional scholars conclude that the DLC as well as PPI, and Clinton more specifically, offered a possible solution: cast "the poor as unrealized entrepreneurs and impoverished communities as untapped 'new markets' ", ostensibly combining financial deregulation with claims for "social progress" in syncretic politics. After the 1988 elections that perpetuated the Reagan era, a deemphasis on purity tests did not seem such a controversial goal for a new national Democratic Party leader. In February 1992, Andrew Kopkind first described the attempt to reconcile "social progress" with financial deregulation as "the ideology of Clintonism."

The New Covenant

Historians such as James D. Boys contend that Clinton's "grand strategy, grand rhetoric" of "courting blue-collar voters" resulted in a series of 1991 speeches to the DLC and his alma mater Georgetown University on a possible "New Covenant" platform. Clinton pledged " 'a New Covenant of change that will honor middle-class values...and make America work again.' " In the context of global commerce, Clinton warned that protectionism was " 'a fancy word for giving up; our New Covenant must include a new trade policy that says to Europe, Japan, and our other trading partners: we favour an open trading system, but if you won't play by those rules, we'll play by yours.' " The "New Covenant" was Clinton's attempt "to position his candidacy in a broad historical narrative. It was not, however, an expression that captured the public's imagination", in contrast to Donald Trump's later "Make America Great Again."

Clinton advisor Benjamin Barber credited William Galston for coining the "New Choice" slogan and for reconfiguring it as a "New Covenant." Galston, an NDC alum, focused on "rhetoric, strategy, and vision." Galston formulated the slogan to define "the president's early interest in public–private partnerships" and an approach to "responsibility" that wedded voters to delegates. According to Barber, Galston invoked "covenant" to connote "American Puritanism" and the "social contract tradition that was part of America's founding." The phrase held "iconic value for the early Clinton agenda", despite its "short shelf life." Less than a year after declining to continue as Secretary of Labor, Robert Reich reported that "the two main accomplishments of the first year were passage of the first budget" and the North American Free Trade Agreement. By the second year, "almost sixty percent of the public now approves of the job B is doing as president, if polls can be believed." During a dinner with Bill Clinton, Clare Dalton, and Hillary Clinton, the latter two decried an imbalanced ratio of CEO incomes to wages of " 'loyal workers' " and renounced corporations that defined " 'downsizing' " as " 'middle-class' " layoffs. Bill Clinton replied that he "shouldn't be out in front on these issues. I can't be criticizing [corporations].' "

John Nichols, writing in The Progressive during the Presidency of George W. Bush, further argued that the 1992 presidential campaign team engaged in a "more populist 'people first' rhetoric...Clinton's 1992 scramble away from DLC language came as no surprise." Stan Greenberg, for example, noted that Clinton's approval ratings did not increase " 'until he rejected the advice of conservatives of the party' and began to adopt populist and distinctly non-DLC rhetoric." New Democrats "did much to define the first two years of the Clinton Presidency", which, according to Nichols, contributed to a Republican Revolution precipitated by "the failure of millions of working class voters to go to the polls." In the aftermath, "DLC cadres" distanced themselves from NAFTA, adopted remnants of "New Covenant" rhetoric, and "formed the New Democrat Network, a well-funded group dedicated to electing and reelecting corporation-friendly Democrats." As a result, the DLC "expanded the House membership after both the 1996 and 1998 elections." Additional critics attribute the 1994 losses to the Omnibus Budget Reconciliation Act of 1993 and the Clinton health care plan of 1993.

One of the last public references to a "New Covenant" was the 1995 State of the Union Address. By the second half of his first term, even while the First Lady struggled with her proposed healthcare plan, "New Covenant" came to signify various counterpoints to Congressional Republican bills and platforms, most notably the Contract with America. Clinton, increasingly acting on counsel from Dick Morris, had begun to entertain new frameworks for political economy, society, and culture, reconceiving the New Democrat "social progress" dilemma and the DLC approach to political thought. He sought advisors that would, in turn, move beyond syncretic politics and attempt to shape a new Democratic Party, in a new way.

Presidency of Bill Clinton

thumb|The [[first inauguration of Bill Clinton on 20 January 1993. Clinton's 1992 presidential campaign ushered in the "golden age" of New Democrats, which subsequently gave birth to the name "Clinton Democrat".]]

Bill Clinton became the Democratic politician most identified with the New Democrats due to his promise of welfare reform in the 1992 presidential campaign, his 1992 promise of a middle-class tax cut and his 1993 expansion of the Earned Income Tax Credit for the working poor.

thumb|320x320px|The [[United States Electoral College|Electoral College results for the 1992 presidential election. Clinton's New Democrat strategy won over a considerable number of rural and white voters in both the Midwest and the South.]]

Clinton presented himself as a New Democrat candidate and continued to appeal to white middle-class voters who had left the Democratic Party for the Republican Party. He promised to "end welfare as we know it." Until 2016 and even after, the Third Way defined and dominated notions of centrism in U.S. partisan politics.

Neoliberalism

Lily Geismer, a historian at Claremont McKenna College, argues that a number of scholars have "flattened and obscured the important ways that the Clintons and other New Democrats’ promotion of the market and the role of government was distinct from Ronald Reagan, Milton Friedman, and their followers. The principles and policies Clinton and the DLC espoused were not solely a defensive reaction to the Republican Party...rather, their vision represents parts of a coherent ideology that sought to both maintain and reformulate key aspects of liberalism itself." Democratic partisan factions, spearheaded by the Atari Democrats and Southern Democrats, came together to deploy a "form of self-description and differentiation" as “new Democrats.” In 1982, "Washington Monthly Editor Charles Peters published 'A Neo-Liberal's Manifesto,' which aimed to lay out the core principles of this group." In 1984, one year before the establishment of the DLC, "journalist Randall Rothenberg wrote a book called The Neoliberals that sought to codify and celebrate this cohort's ascendency." Geismer distinguishes Colloque Walter Lippmann (1938) references and conceptions of "neoliberalism" from New Democrat interpretations and applications of the same. This distinction is crucial in order "to seek a more precise understanding of what I call 'Democratic neoliberalism.' "

Bipartisan Bill Proposals and Acts (1992–2000)

New Democrats dialectically adopted Republicans proposals and platforms during the campaigns for the 1992 congressional/state elections and 1992 United States presidential election. As a result, particularly after the 1994 midterm elections when Republicans regained control of Congress, they signed legislation endorsed by Republicans, although not all Democrats supported this move. Both the Defense of Marriage Act and Personal Responsibility and Work Opportunity Act (PRWOA) became law three months before the 1996 United States elections. It was in his 1996 State of the Union Address that Clinton declared: "The era of big government is over." After Clinton vetoed two versions of the bill that ultimately became PRWOA, "Svengali-like advisor Dick Morris---upon whom Clinton had grown increasingly dependent, politically and psychologically, in the aftermath of the 1994 debacle---insisted that a third veto could cost him his reelection in 1996."

Legislation that received bipartisan support under President Clinton included:

  • The North American Free Trade Agreement, a core international agreement signed during the presidency of George H. W. Bush without NAALC/NAAEC and required Congressional approval for implementation. It is still largely in effect via the succeeding USMCA and proposed Indo-Pacific Economic Framework.
  • The Don't Ask, Don't Tell ban on openly gay people serving in the Armed Forces (repealed in 2010).
  • The Defense of Marriage Act that prohibited the federal government from recognizing same-sex marriages. It was ruled unconstitutional by the U.S. Supreme Court in 2015 and repealed in 2022, the latter with support from 24% of Congressional Republicans.
  • The Religious Freedom Restoration Act federal religious discrimination statute.
  • The Violent Crime Control and Law Enforcement Act, sometimes referred to as the 1994 Omnibus Crime Bill.

Legislative examples of bipartisan authorship included:

  • 1996 Defense of Marriage Act: Bob Barr (R-GA) (Republican introduction)
  • 1996 Personal Responsibility and Work Opportunity Act: John Kasich (R-OH) with ideas and provisions from Clinton's 1994 proposal
  • 1997 Taxpayer Relief Act: John Kasich (R-OH) with ideas and provisions from New Democrats
  • 1999 Gramm-Leach-Bliley Act: Phil Gramm (R-TX), Jim Leach (R-IA), and Thomas J. Bliley Jr. (R-VA) with ideas and provisions from New Democrats

Congressional Democrat voting percentages for the foregoing examples:

  • 1996 Defense of Marriage Act: 64% Democratic Representatives support and 72% Democratic Senators support
  • 1996 Personal Responsibility and Work Opportunity Act: 50% Democratic Representatives support and 53% Democratic Senators support
  • 1997 Taxpayer Relief Act: 80% Democratic Representatives support and 82% Democratic Senators support
  • 1999 Gramm-Leach-Bliley Act: 75% Democratic Representatives support and 84% Democratic Senators support

The Clinton Administration, supported by congressional New Democrats, was responsible for proposing and passing the Omnibus Budget Reconciliation Act of 1993, which increased Medicare taxes for taxpayers with annual incomes over $135,000, yet also reduced Medicare spending and benefits across all tax brackets. Congressional Republicans demanded even deeper cuts to Medicare but Clinton twice vetoed their bills. The Clinton Administration in turn taxed individuals earning annual incomes over $115,000 but also defined taxable small business earnings as high as $10 million in annual gross revenue, with tax brackets for "high-gross incorporated businesses" beginning at that number. According to the Clinton Foundation, the revised brackets and categories increased taxes on the wealthiest 1.2% of taxpayers within these new brackets, while cutting taxes on 15 million low-income families and making tax cuts available to 90% of small businesses. Small businesses and taxpayer classifications were reconfigured by these new tax brackets.

Clinton's promise of welfare reform was passed in the form of the Personal Responsibility and Work Opportunity Act of 1996. Prior to 2018, critics such as Yascha Mounk contended that Clinton's arguments for the virtues of "negative" notions of "personal responsibility", such as the New Orleans Declarations "individual responsibility" propounded within DLC circles during the 1980s, stemmed more from Reagan's specific conception of "accountability" than any "positive notion of responsibility". partisan compromises over this act, conflicts within the Democratic Party, as well as the act's multivalent consequences, all contributed to deliberations over passage and execution of the PRWORA.

Democratic partisan criticism of the first Clinton Administration, as well as the formation of the Blue Dog Coalition, particularly in response to proposals and actions by the First Lady, followed 1994 congressional New Democrat losses in the southeast and west coast. Clinton's reassertion as a New Democrat during the 1996 presidential elections, and passage of the PRWORA, contributed to the founding of the New Democrat Coalition, reaffirming Clintonian Democrats as New Democrats.

The Third Way

During 1985–1991 electoral campaigns, various members of the DLC inconsistently touted different planks of their respective candidate platforms as "third way." Then, in 1992, New Democrats streamlined the notion of a "third way" as part of the national Democratic Party platform, specifically in the "Opporunity" section following the preamble, a "New Covenant with the American People." The platform coalesced canddiate "third way" planks into a national partisan critique of "big government theory that says we can hamstring business and tax and spend our way to prosperity. Instead we offer a third way." The new Democratic Party would henceforth "favor a third way beyond the old approaches—to put government back on the side of citizens who play by the rules. We believe that by what it says and how it conducts its business, government must once again make [negative] responsibility an instrument of national purpose." Once in office, the Clinton Administration disseminated this notion of a Third Way "through meetings with foreign leaders and international conferences." Days after Clinton took the oath of office, Al From met with Labour Party (UK) delegates Tony Blair and Gordon Brown. From guided the DLC "to see itself as the American franchise of a worldwide movement — the pioneer of a new ideological project for the center-left" that initiated a "global revolution of the politics of the Left."

Presidency of Barack Obama

thumb|200px|[[Barack Obama, the 44th president (2009–2017)]]

In March 2009, Barack Obama, said in a meeting with the New Democrat Coalition that he was a "New Democrat" and a "pro-growth Democrat", that he "supports free and fair trade", and that he was "very concerned about a return to protectionism". In 2008, George Packer argued that Barack Obama, as a New Democrat president-elect, had to reconcile "the 'post-partisan 'Obama' and the 'progressive' Obama. Some tension exists between these two approaches." Many Obama cabinet picks and House and Senate Democrats were New Democrats. From 2007 to 2011, the New Democrats were the leading swing bloc in the House, and were the main authors of the legislation on bailouts and financial regulation of derivatives. The Democratic Leadership Council (DLC), which gave rise to New Democrats but that since the 2000s had lost some of its influence, and the DLC closed down in February 2011 due to financial issues; however, New Democrats remained influential through the Third Way organization, and New Democrats proved key swing votes in subsequent years. During his presidency, pundits debated if Obama moved to the left, citing the lack of the DLC's influence from its heydays, or whether, forced by Republican gains in Congress, he doubled down on triangulation.

The Obama Administration espoused "free and fair trade" ideas. Trans-Pacific Partnership (TPP) proponents postponed TPP drafting after Obama became President, only to commence formal Trans-Pacific Partnership negotiations in 2010, after Executive Office (EO) disclosure of an endorsement, albeit with Obama's proposed revisions on, for instance, intellectual property. Early drafts of Executive Order 13609 principally by Cass Sunstein, "Promoting International Regulatory Cooperation", buttressed the TPP deliberations with the premise that "inadequate cooperation and consultation" had been caused by "excessive red tape" for "businesses, particularly small- and medium-sized enterprises operating near the border." In the final draft, Obama advisors such as Sunstein applied the Executive Order to all such "enterprises", in the absence of regional and tax bracket classifications, operating within "North America and beyond." Sunstein later proposed thirty-two criteria for defining such policy frameworks as "liberal", especially to advance "the right to private property" (not always totally devoid of a "progressive income tax") and to remedy the vagaries of what he perceives as groupthink. In 2015, the Obama EO released "The Economic Benefits of U.S. Trade", a signatory framework for prospective drafts of the TPP and Transatlantic Trade and Investment Partnership (TTIP). According to the Obama EO, free trade "help[s] developing countries lift people out of poverty" and "expand[s] markets for U.S. exports."

Throughout Obama's tenure, approximately 1,000 Democrats lost their seats across all levels of government. Specifically, 958 state legislature seats, 62 House seats, 11 Senate seats, and 12 governorships, with a majority of these elected officials identifying as New Democrats. Some analysts, such as Harry Enten at FiveThirtyEight, believe this was due to the changing demographic shift, as more Democrats identified as liberal in 2016 than moderate. Consequently, many pundits believed that Obama's tenure marked an end of the New Democrats' dominance in the party, although the faction still remains an important part of the party's big tent.

2010s and 2020s

Historian Gary Gerstle argues that support for neoliberalism declined in the United States in both parties in 2016, with both Trumpism and progressivism opposing central tenets of neoliberalism. For example, Trump and Sanders both opposed the Transatlantic Pacific Partnership during the 2016 United States presidential election. President Trump then refused to sign any draft TPP, precluding further revisions to garner U.S. participation. On the eve of the COVID-19 pandemic, the TTIP dissolved into trade disputes between the European Union (EU) and the Trump Administration. Trump's approach to curbing the pandemic became the focus of EU delegate concerns, superseding the unresolved trade conflicts. Despite this, New Democrats have continued to be a large coalition within the big tent of the Democratic Party. In 2021, Jennifer Berrera, president of the California Chamber of Commerce, endorsed a tenacious and "rugged band of independent-minded Democrats", variously referred to as " 'moderate Democrats' or 'new Democrats'...hailing from more conservative regions, including many with influential Hispanic populations." This "band", maintains and maintains Berrera, "shares common aims with statewide Democratic Party leaders, but "also shares a keen appreciation for the costs of overreach in terms of economic opportunity and job creation."

Hillary Clinton presidential campaign

thumb|150px|[[John Podesta served as an advisor to all three U.S. Presidents who led the New Democrats.]]

Ahead of the 2016 Democratic Party presidential primaries, many New Democrats were backing the presidential campaign of Hillary Clinton, the wife of former New Democrat president Bill Clinton, who served as a senator from New York during the 2000s and as Barack Obama's Secretary of State during the early 2010s. Originally considered to be an expected nominee, Clinton faced an unexpected challenge from Vermont Senator, Bernie Sanders, whose campaign garnered the support of progressive and younger Democrats. Ultimately, Clinton won 34 of the 57 contests, compared to Sanders' 23, and garnered about 55 percent of the vote. Nevertheless, commentators saw the primary as a decline in the strength of New Democrats in the party, and an increasing influence of progressive Democrats within the party.

Ahead of the formal announcement of the 2016 Democratic National Convention, WikiLeaks published the Democratic National Committee email leak, in which DNC operatives, many of whom were New Democrats, seemed to deride Sanders' campaign, and discuss ways to advance Clinton's nomination, leading to the resignation of DNC chair, and New Democrat member, Debbie Wasserman Schultz and other implicated officials. The leak was allegedly part of an operation by the Russian government to undermine Hillary Clinton.

Although the ensuing controversy initially focused on emails that dated from relatively late in the primary, when Clinton was nearing the party's nomination, This was evidenced by alleged bias in the scheduling and conduct of the debates, as well as controversial DNC–Clinton agreements regarding financial arrangements and control over policy and hiring decisions.