Marcy Wheeler got to this yesterday, but it bears repeating: donations to the Blue Dog PAC are down sharply in the third quarter. In fact, they received just three donations in the entire month of September, totaling $12,500.

After raising $1.1 million from January to June, the committee raised less than $87,000 between July and September — less than it brought in during any one of the preceding five months. And in just three months, the Blue Dog PAC’s monthly fundraising average dropped by more than $50,000 — probably not the sort of fiscal conservatism the 52-member coalition was hoping for.

Wheeler is right to note that donations for individual Blue Dogs are humming along, particularly from health industry interests as the debate continues. But by my understanding, the Blue Dog PAC derives much of their strength from the money they can raise and then dole out to races across the country to win the loyalty of incoming freshman Democrats. In this story, Josh Israel and Aaron Mehta detail how it’s done:

The Blue Dog PAC raises money mostly from other PACs and automatically disburses the maximum possible contribution to each of its members for their re-election campaigns. This helps preserve their ranks, especially since many of them represent swing districts and are among the most targeted incumbents at election time.

The PAC also helps expand their coalition. By a two-thirds vote of the Blue Dog Coalition, their PAC can endorse and contribute to like-minded Congressional hopefuls. When successful, these freshmen often become Blue Dogs, growing the membership. In the 2006 cycle, the Blue Dog PAC gave a total of $70,000 to help nine Democratic candidates win seats, eight in Republican-held districts. All nine joined the Blue Dog Coalition. In addition to expanding the group, these new members provided half of the 16 seats the Democrats needed to control the chamber. With a Democratic majority, Blue Dog Collin Peterson of Minnesota became chairman of the House Agriculture Committee, while more than a dozen other coalition members became subcommittee chairs. Then the money really started rolling in. And more money to spread around meant another round of funding and recruiting for the 2008 elections.

If the PAC itself doesn’t raise money, individual Blue Dogs could be swayed in quite another direction – the largest source of donations for them as individuals comes from organized labor. If these Blue Dogs decide to vote against health care reform, that money will be likely to dry up as well, and Blue Dogs in swing districts during a traditional down year for the party in power will have less funds than they might need to stay in office.

The diminishing of the Blue Dog funding power is in direct proportion to the newfound muscle of the Progressive Caucus in Congress. It will be interesting to see what successive quarters yield.