U.S. Chamber of Commerce lobbyist Bruce Josten wrote an alarming blog post recently arguing that Congress’s failure to raise the debt ceiling would have “calamitous,” “devastating,” and “potentially catastrophic” effects. It was the latest in a series of apocalyptic warnings that the National Association of Manufacturers, the Financial Services Forum, and other business players have been sounding for months about the risks of the United States defaulting on its debt.
So as negotiations on raising the debt ceiling went down to the wire this week, how much pressure did these K Street powerhouses exert on the Republican House majority that they helped create?
“I haven’t heard from them,” said Rep. Tim Huelskamp, R-Kan., referring to the chamber. Huelskamp, who was weighing a vote against House Speaker John Boehner’s debt-ceiling bill, had lots of company in not feeling lobbying pressure from the corporate sector.
Washington’s top business lobbyists aren’t knocking the heads or twisting the arms of debt-limit deniers. Instead, they’re counting on the Democrats whom they fought to put in the minority to help save the country from default. The lack of behind-the-scenes pressure from K Street is in stark contrast to the dire public warnings. Despite the high stakes, little, if any, smashmouth lobbying is going on. Here’s why:
1) The negotiations are too fluid and high-level to influence. If the president and congressional leaders don’t know what the deal looks like, the thinking goes, how could business lobbyists possibly move the needle?
2) Nobody’s getting paid. While corporations generally support raising the debt ceiling, they are sitting on their hands until they know whether, and how much, their industries stand to lose in budget cuts. “I can’t think of anyone who’s lobbying for the debt-ceiling increase, since there isn’t a dedicated constituency for it,” Republican consultant Rob Collins said. “It’s like power lines. Nobody wants them in their neighborhood, but everybody wants to be able to turn their TV on. And when they can’t, they flip out.”
3) It’ll get done. Many business insiders still think that Congress will pass some kind of debt-ceiling increase in time to avoid a default or a downgrade in the country’s credit rating. The lobbying so far has been more about “education” than persuasion. That education goes both ways, as the business community learns how to talk to the tea party. Business officials are crafting broader arguments, focusing less on how proposals would affect their bottom lines and explaining more about how they would affect the broader economy.
4) The business community wants to stay on the good side of House Republicans. At most, business leaders are a little peeved at GOP members who are willing to risk default. But, they say, dealing with the occasionally difficult Republican is better than another two years of apoplexy under a Washington run by Democrats. “Business invested in an emergency brake on the Obama administration, and they got it,” said Collins, who ran the American Action Network, which spent $26 million largely helping to elect House Republicans. “They don’t want to see that go away.”
How do chamber officials respond when asked to reconcile their support of increasing the debt limit with their backing of tea party Republicans wary of making the compromises that may be necessary to get a debt-ceiling deal through Congress?
“The way I square that tension is, the chamber is actively trying to change the trajectory of spending and trying to educate members about how important the debt-limit increase is,” said Bill Miller, the group’s senior vice president of political affairs. “We had some great successes in the election. We helped a lot of really good people. We backed a lot of people that came in, but these are going to be complicated relationships.”
After the election, Miller said, he explained the new GOP dynamics to chamber President and horse lover Tom Donohue by comparing the difference between establishment and tea party Republicans to “the difference between riding a bucking bronco and riding a bull.” Neither is easy, but the bull is much harder to stay atop.
“These are going to be complicated relationships.” —Bill Miller, U.S. Chamber of Commerce
The chamber announced on Tuesday that it supports Boehner’s proposal to raise the debt limit and cut the deficit and is making the vote part of the overall business-friendly score that it uses to rank lawmakers. Such scores matter greatly to some voters (a low score from the National Rifle Association, for instance, can damage a member hoping to win support from gun enthusiasts). But one “wrong” vote on the chamber’s scorecard is unlikely to keep Republican members upat night.
Business lobbyists say they understand that they can’t win every GOP vote. But some Democrats see the corporate sector’s laissez-faire approach toward freshman tea partiers and other conservatives as part of a more insidious calculus.
“It’s a shortsighted strategy because the economy will suffer, but it’s a long-term strategy because these new Republican members will feel beholden to Big Business because they were given a pass on the debt ceiling,” a senior House Democratic aide said.
However, if Congress doesn’t push through a debt-limit increase and the country defaults, the business community will likely be rethinking its relationship with the House’s newest conservative faction. Or, as one senior Republican business leader put it, “If it did fail because of a certain element within the party, then those that have been generally supportive of the tea party” would be second-guessing themselves.
In other words, there’s still plenty of time for buyer’s remorse.
Jim O’Sullivan contributed
This article appears in the July 30, 2011, edition of National Journal.