The New Democrats, often referred to as Moderate Democrats, 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, New Democrats began to change and update their ideological positions. 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."
A productivity deficit as a possible factor in 1970s economic turbulence, and structural or statistical analyses thereof, helped to reshape Democratic partisan platforms. Simon Torracinta argues that, "by the Nixon period, the narrative of the service transition had become mainstream wisdom", resulting in the establishment of the National Commission on Productivity (NCP). Before assessing postindustrial productivity, the non-partisan commission first had to determine what productivity entailed in the service sector. Torracinta contends that, in service domains such as "teaching, in which the quality itself is judged in terms of the labor involved, productivity increases were intrinsically limited or unsystematic—a phenomenon extended to government, education, arts, restaurants, retailing, and leisure." Despite scholarly conflict over which meanings to ascribe to productivitity in a postindustrial economy, bipartisan fiscal advisors attempted to apply structural models such as the Baumol effect ("cost disease"), where "all such services would face unavoidably cumulative increases in real costs as against manufactured goods." The industrial sector, its productivity measured by statistics on goods produced, bore the burden of stagnant postindutrial productivity. Since the Baumol "ratio of outputs of the two sectors remained constant", then an "ever-greater proportion of the labor force would be occupied in the 'nonprogressive' sector while the labor employed in the 'progressive' sector would approach zero." Industrial productivity outpacing postindutrial productivity in turn spurred a "declining rate of growth compared to the growth of the labor force."
Dual-sector macroeconomic models for structural change proved difficult to apply without first confirming service sector productivity as a cause for instability and, even more importantly, without understanding how postindustrial productivity manifested itself in microeconomics. These concerns did not prevent the NCP from proposing solutions to a service productivity problem, even if non-partisan commissioners could not articulate what service productivity was in the first place, much less whether postindustrial services made the U.S. economy unstable. The first such solution was to "personalize productivity, turning output back into a motivational issue. At the level of public relations, then, the problem of productivity became conflated with a simple problem of effort", culminating in the "Sign Your Work" promotional campaign. Yet continuing debates over how to exactly evaluate service productivity amid intangible products such as teaching, government, and healthcare, belied the fact that a solution had been proposed without fully understanding the problem or its causes. Scholarly and partisan consensus over the failure of "Sign Your Work" facilitated the rise of another proposed criterion to determine service productivity: postindustrial "innovation", which had ostensibly fueled advances in technological research and development. Although replacing one indeterminate postindustrial concept with another, this shift in solutions pushed Democratic partisan thought into new spheres of "supply-side" economics.
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.Hale, Jon F. "The Making of the New Democrats." Political Science Quarterly 110, no. 2 (1995): 207–221. 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 Atari Democrts, Watergate Babies, Yellow Dog Democrats, and Conservative Democrats among the Yellow Dogs. 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.