Good Grief, Charlie Baker

Charlie Baker is going to have to do some serious spin on this on…

As Republican Charles Baker seeks to capture the independent vote that bolstered U.S. Sen. Scott Brown’s win, a Herald review shows Harvard Pilgrim tripled the former CEO’s annual salary as it hit consumers with a 150 percent increase in premiums.

Brown rode to victory as an independent voice on health care, a position critics say Baker will have a tough time following with those numbers.

Baker defends his record and argues that Gov. Deval Patrick is late to the health-care discussion. He said he’s been “shouting from the rooftops” about the need for hospitals and medical providers to make the cost of health care more transparent, and pushing for legislation that would control costs.

“My salary’s been a matter of public record for 20 years, and I’m probably the only candidate,” for whom that’s the case, Baker said. Baker’s salary as CEO of Harvard Pilgrim surged from $548,351 in 1999 to a high of $1.7 million in 2008. He earned $1.3 million in seven months in 2009 before he resigned to run for governor last summer, filings with the state Attorney General show.

Over the same period, premiums at Harvard Pilgrim went up by 100 to 200 percent.

When Baker took the reins in 1999, rates on Harvard Pilgrim’s most popular plans ranged from about $166 to $187 a month per member. Those rates soared to $425 to $483 a month, as of April, according to filings with the Massachusetts Division of Insurance.

Two months ago, the Commonwealth elected a Republican to the Senate due in part to his promise to be the 41st vote against the health care bill. With health care being at the front line of today’s political battleground, will those same voters ignore the fact that Charlie Baker was “part of the problem” with the health care industry?

“You have to look at him as the incumbent in terms of health-care costs,” said Democratic operative Michael P. Shea. “If you look at his salary and the increases that people are paying now, how can he say he did a good job? It’s absolutely fair to pin this on him. He hasn’t shown he’s part of the solution, he’s part of the problem.”

Patrick is expected to keep the focus on health care – and keep the heat on Baker – as he proposes a so-called soft cap on premium increases. His plan pits him squarely against health insurers in an intensifying three-way race that also features unenrolled candidate Tim Cahill, the state treasurer.

Baker said Patrick is trying to shift the focus.

“This probably beats talking about spending and taxes and unemployment if you’re him,” Baker said. “I’ve supported a lot of things that would put my organization and my industry at risk. I have no idea if it’s going to be good or bad for my company or my industry, but it’s the right thing to do for the people of Massachusetts. I got a lot of grief from people for doing that.”

Sooner or later, he will have to address the real issue, rather than playing the “I’m rubber and you’re glue” argument, just Deval Patrick will have to answer to his criticisms too. A guy making nearly $2 million a year, while us regular people are paying painfully high health care premiums…maybe, according to Harvard Pilgrim, he did deserve the salary bump…but anyone who didn’t see their salaries triple may think differently.

Who’s the “Party of the Rich” Now?

The special election for U.S. Senate last week revealed some intriguing demographic trends in Massachusetts that present a unique opportunity for the state Republican Party.

Take a look at this map showing margins of victory by town in last week’s election. Notably, Scott Brown generally performed better in exurban towns and less affluent suburbs such as North Andover, Canton, and Reading than in the wealthiest suburbs west of Boston such as Wellesley, Belmont, and Needham. Brown’s margins in many largely middle-class towns were greater than Mitt Romney’s in 2002, which is the last year there was a truly competitive statewide race in Massachusetts. However, Romney performed better than Brown in the upscale western suburbs. What explains this apparent paradox?

These results reflect a larger shift in the demographic makeup of both major political parties, which has been taking place across the country in recent years, culminating in 2008. The Obama coalition that year was formed of three basic demographic elements. The first element was made up of those with the least money in the country; Obama beat out McCain by 48 points among those earning less than $15,000 a year. The second element was made up of many of the wealthiest Americans.

The first element’s support for Obama is not entirely surprising. However, the Democrats’ gains among affluent Americans are somewhat of a surprise, especially given that Republicans have long held a lock on the wealthy vote. For example, as recently as 2004, President Bush won those Americans earning more than $100,000 a year by 17 points, and won those earning more than $200,000 a year by 28 points. In 2008, Obama beat out McCain by 6 points among those earning more than $100,000 a year, a 23 point turnaround in just four years. And Obama tied for the votes of those earning more than $200,000 a year, a 28 point gain from the previous presidential election.

The third element of the Obama coalition was made up of a large number of Americans in between the income extremes, many of whom likely believed he would fulfill his campaign promise to unite Americans by launching a pragmatic, “postpartisan” political era. Indeed, while Bush tied for the votes of those Americans earning in between $30,000-$50,000 a year in 2004, Obama won this group by 12 points in 2008. And while in 2004 Bush won those earning in between $50,000-$75,000 a year by 13 points, Obama tied for the votes of this group four years later. These middle-class voters make up much of the population of the swing districts/states that were crucial to Obama’s victory in 2008, mostly in the middle of the country or in non-coastal sections of coastal states. And they are the same voters who have abandoned Obama in droves over the last year as his campaign promises of bipartisanship have been revealed to be mostly hollow.

One explanation for the migration of wealthy Americans to the Democrats in recent years has its roots in the boom of the technology and financial sectors between 1995-2008, which resulted in the rapid acquisition of great wealth among many Americans. This argument holds that such quick accumulation of wealth has weakened the connection for many affluent Americans between wealth and the policies that encourage success (i.e. low tax rates), which held more salience in the years when wealth was acquired as a result of many years of hard work. Among the new elite, social issues and environmental causes apparently trump economic self-interest. This is especially true among the very wealthy. For them, the impact of the recession has been minimal and the tax consequences of grandiose policy schemes are of little concern.

I would argue that the change is also generational. Newly wealthy members of the younger generations who have never known the days of tax rates as high as 90% in the early 1960s may not be aware of the possible long-term consequences of supporting Democrats. I imagine some of these wealthy Americans may begin to shift their party allegiances as those consequences (i.e. tax increases) become more clear in the coming years.

One definitive consequence of this demographic shift is the change in the power base of the Democratic Party. While still powerful, blue collar constituencies such as unions, already weakened because of declining membership, have lost ground to special interest groups funded by wealthy donors like George Soros, such as Moveon.org. And increasing numbers of Democratic candidates come from the ranks of the very wealthy, with the likes of Jon Corzine, Ned Lamont, and Maria Cantwell, among others, spending millions to fund their own campaigns.

These trends are also evident in Massachusetts, which last week’s election showed is not as ideologically homogenous as some pundits would lead us to believe. Indeed, the state Democratic Party here mirrors the national party in that it is an awkward coalition of conservative and liberal factions. In recent years, the wealthy liberal faction has taken over the leadership of the state Democratic party in Massachusetts, as evidenced by the nomination of Deval Patrick and the ascension of his top supporters into state party leadership. However, these changes have not taken place without some public dissatisfaction from conservative Democrats.

In a wise move, Scott Brown took advantage of this intraparty split by making a specific (and successful) appeal to conservative Democrats tired of the obvious elitism of their party leaders. In doing so, he laid out a political blueprint that may serve other Bay State Republicans well this fall.

Indeed, the intraparty split among Democrats is an important development that could be crucial towards making some serious Republican gains in November. It certainly should be eagerly exploited by state Republican leaders, who should take advantage of this dynamic by recruiting candidates from among the ranks of the middle-class “Brown Majority,” especially conservative Democrats and independents. These candidates could, like Scott Brown, begin to represent a new perception of the Republican brand in this state, and attract conservative Democrats as well as large numbers of middle-class independents who are fed up with the arrogance of state and national Democrats. Let’s hope our state Republican leaders take advantage of this unique opportunity. Their decision to do so could be crucial towards exponentially increasing Republican power from the local level on up this fall.

Truth Be Told

Joan Vennochi on the 2010 gubernatorial race.

Deval Patrick, asterisk.

The Bay State’s first black governor, and the first Democrat to win the corner office in 16 years, is at risk of turning into a blip in Massachusetts political history – a one-term governor whose legacy becomes the zeal to replace him with a Republican.

In the early voting – money – Republican Charlie Baker is winning.

Baker raised $1.85 million over five months of campaigning, giving him three times more cash on hand than Patrick. That’s a fairly serious wake-up call for an incumbent Democrat who is best friends with a president.

Some of Baker’s money is coming from traditional Democratic donors, including previous Patrick supporters.

Baker’s big bucks mean one thing to Lawrence DiCara, a longtime Democrat. “He’s for real, which I knew anyway,’’ said DiCara, who remains a Patrick supporter.

Still, it’s only Round One. It’s a winning one for Baker, the former CEO of Harvard Pilgrim Health Care, but there’s a long way to go before a knock-out. One question, said Democrat Scott Harshbarger, a former attorney general and gubernatorial candidate, is whether this is “one-shot money’’ – contributions from people who know Baker, like him and owe him what Harshbarger labels “the chits of good will’’ – or something deeper and more dangerous for Patrick.

Baker was “able to translate his reputation and record into a significant fundraising event. If the next round demonstrates significant political strength . . . don’t kid yourself, this is going to be a major fight,’’ Harshbarger said.

Rob Gray, Baker’s chief strategist, predicts the money flow to the Republican’s campaign is “eminently sustainable.’’ He attributes the fundraising success to “a combination of people knowing Charlie as a government leader and a business leader and believing in his ability . . . plus a dissatisfaction with the way Deval Patrick has managed, or really not managed effectively, the state budget.’’

The landscape is tough for Democrats nationwide, from the president to members of Congress to governors. Voters are angry over fallout from the poor economy and unhappy over some policies, such as healthcare reform.

In Massachusetts, disappointment over Patrick’s tenure is translating into a real sense of political vulnerability. He was elected with expectations so high they would be difficult to meet under the best circumstances. A poor economy, plus Patrick’s own missteps, worsened the gap between promise and reality.

UPDATE: More from Howie Carr and the Herald.

SECOND UPDATE: More from the Globe, Herald and Metro.

THIRD UPDATE: More from Public Policy Polling.

Oh Happy Day

Charlie Baker surges financially.

In one of the most aggressive political fund-raising pushes in recent memory, Republican gubernatorial hopeful Charles D. Baker has amassed a $1.85 million war chest over roughly five months of campaigning, tapping into a broad range of supporters and establishing himself as a major threat to Governor Deval Patrick’s reelection bid.

Baker doubled, in less than half the time, what Patrick raised for the entirety of 2009, despite a fund-raising visit by President Obama this past fall for the Democratic governor. Baker’s coffers currently hold more than 10 times the amount in Patrick’s campaign account.

The Republican has also raised 3 1/2 times the amount that state Treasurer Timothy P. Cahill, an independent rival in the governor’s race, collected last year. Baker’s rival for the Republican nomination, Christy Mihos, lags far behind, relying mostly on personal wealth.

Baker’s fund-raising haul, which has broken records for a nonincumbent candidate who is not yet a party nominee, provides another jolt for Democrats already discouraged over Patrick’s underwhelming poll numbers and comparatively slow pace of fund-raising.

“This is the political fund-raising version of shock and awe,’’ said Warren Tolman, a Democrat and former state senator who ran for governor in 2002. “Baker has cast a pretty wide net.’’

Campaign finance records show that Baker has collected $2.3 million since late summer, when he assembled a team of Republican fund-raisers and set up events almost nightly from Labor Day into late December. In addition, his running mate, Richard Tisei, the Senate minority leader, who joined the ticket in late November, raised $313,000.

Last month, typically the toughest of the year to collect political donations, Baker reported raising a whopping $726,000, ending the year with a donor base of 7,449 people. Raising money every year is key for candidates in Massachusetts, because the annual contribution limit for individuals is $500.

The fund-raising success has allowed the campaign to spend hundreds of thousands of dollars already to position itself for this election year.

Baker’s feat exceeds the expectations his aides had when the former CEO of Harvard Pilgrim Health Care decided to jump into the 2010 governor’s race.

UPDATE: Tune in Wednesday night at 8:00pm EST for the latest edition of The Notes on Blog Talk Radio. Our guests will be Arnold Kling and Nick Schulz, authors of From Poverty to Prosperity. Plus, more from WBZ and the Herald.