Business Tries to Tame Tea-Party Conservatives It Helped Elect

Gridlock, shutdown threats, and default are on the table this fall as weapons in the spending wars.

Tea Party protest against healthcare
National Journal
Jill Lawrence
Aug. 19, 2013, 5:21 a.m.

The non­par­tis­an Na­tion­al Small Busi­ness As­so­ci­ation ad­ded a new ques­tion this sum­mer to its sur­vey of more than 1,100 small-busi­ness own­ers, and it vaul­ted im­me­di­ately to the top of the group’s To Do list for Con­gress and the Obama ad­min­is­tra­tion. “The No. 1 thing small busi­nesses want poli­cy­makers to do is end the par­tis­an grid­lock and work to­geth­er,” the NS­BA found.

Good luck with that.

As Wash­ing­ton heads to­ward an au­tumn of fisc­al dead­lines, gov­ern­ment-shut­down threats, and the specter of de­fault, the busi­ness com­munity is reap­ing the whirl­wind. Dozens of House and Sen­ate con­ser­vat­ives, many of them tea-party pop­u­lists, have been elec­ted since 2010 with help from the U.S. Cham­ber of Com­merce, the Na­tion­al Fed­er­a­tion of In­de­pend­ent Busi­ness, and oth­er busi­ness in­terests.

Now these same law­makers — de­scribed by one busi­ness lob­by­ist as “eco­nom­ic fun­da­ment­al­ists” for their aver­sion to com­prom­ise — are a chief reas­on for hol­dups and break­downs on bills that tra­di­tion­ally are bi­par­tis­an, as well as on big is­sues where deals may be with­in reach. All of which puts the busi­ness sec­tor in an in­ter­est­ing squeeze: fight­ing many Obama policies tooth and nail, but also be­mused and in some cases frus­trated by the way some pre­sumed con­gres­sion­al al­lies are hand­ling their jobs.

“You don’t really know what they’re go­ing to do or why,” says NS­BA Pres­id­ent Todd Mc­Crack­en, a 20-year Wash­ing­ton vet­er­an. “It used to be there were not many re­wards for ob­struc­tion. Now there are no con­sequences.”

Susan Eck­erly, seni­or vice pres­id­ent of fed­er­al pub­lic policy at the NFIB, says House Speak­er John Boehner “has his hands full” with some 60 re­bel­li­ous tea-party Re­pub­lic­ans. “They are really buck­ing Boehner,” she says. “It’s go­ing to be really hard for him to con­trol them. That’s a new phe­nomen­on in Con­gress.” And not one her group could do much about, if it came to the point of want­ing to do something. Some of the tea-party law­makers are NFIB mem­bers, Eck­erly says, and in­cum­bents win auto­mat­ic sup­port for reelec­tion if they score 70 per­cent or bet­ter in NFIB vote rat­ings.

For busi­nesses, the stakes amid all this dis­rup­tion are enorm­ous. They are keenly in­ter­ested in tax re­form and im­mig­ra­tion re­form. They would like to see more fed­er­al spend­ing on in­fra­struc­ture and less on en­ti­tle­ments, and less fed­er­al reg­u­la­tion across the board. They don’t like brink­man­ship on budget and debt is­sues, or the more routine dys­func­tion that has stalled trans­port­a­tion and ag­ri­cul­ture le­gis­la­tion im­port­ant to both parties and much of the private sec­tor. And as most busi­ness groups have made crys­tal clear, they really, really don’t like the Af­ford­able Care Act, bet­ter known as Obama­care.

Yet there is little to no busi­ness sup­port for the latest tea-party-driv­en cru­sade to block any fund­ing bill that in­cludes money for the health care law, even if it means the gov­ern­ment would shut down when the fisc­al year ends Sept. 30. Bruce Jos­ten, ex­ec­ut­ive vice pres­id­ent for gov­ern­ment af­fairs at the U.S. Cham­ber of Com­merce, calls that “not the polit­ic­ally as­tute thing to do.” Bill Miller, seni­or vice pres­id­ent in charge of out­reach to Con­gress and the ad­min­is­tra­tion at the policy-ori­ented Busi­ness Roundtable, says his group con­siders that strategy un­real­ist­ic and is now fo­cused on try­ing to shape ACA reg­u­la­tions.

The NS­BA and the more con­ser­vat­ive NFIB, the only busi­ness group to join a multistate law­suit against the ACA, would prefer that Con­gress ad­dress in­di­vidu­al pro­vi­sions that are prob­lem­at­ic for their small-busi­ness con­stitu­ents. “We’d love to see re­peal, ob­vi­ously. But giv­en the le­gis­lat­ive arith­met­ic, it would be bet­ter to fo­cus on the most oner­ous parts for small busi­ness,” says Eck­erly. As for the de­fund fac­tion, “It’s a great way for them to raise money, but it’s not go­ing to hap­pen.”

CEOs and busi­ness lob­by­ists have sat down with law­makers to ex­plain what it means to them — and the eco­nomy writ large — for Con­gress to be so po­lar­ized and para­lyzed. Miller says it’s been use­ful for new law­makers who ran against “crony cap­it­al­ism and bad gov­ern­ment” to get “the per­spect­ive of people who make big bets on Amer­ica.”

Jos­ten re­counts his talks with new­bie con­ser­vat­ive mem­bers who prom­ised in their cam­paigns to re­duce the size, cost, and reach of the fed­er­al gov­ern­ment, and also prom­ised not to com­prom­ise their prin­ciples. He brings up the idea that “Pledge No. 2 may be sab­ot­aging your abil­ity to achieve Pledge No. 1.” Their re­sponse? “Some people get it, and some people don’t,” he says, and some people don’t care, be­cause their top goal is main­tain­ing an iden­tity sep­ar­ate from the bi­par­tis­an es­tab­lish­ment that in­creased the size of gov­ern­ment and the na­tion­al debt.

Some seasoned busi­ness lob­by­ists say most law­makers who ar­rive clutch­ing pitch­forks phase out of firebrand mode over time. But that shift could take a while, es­pe­cially among Re­pub­lic­ans, be­cause dozens of House dis­tricts re­main over­whelm­ingly con­ser­vat­ive, and more than a few sen­at­ors fear primary chal­lenges from the right. For now, Jos­ten says, “you’ve got a bunch of people who don’t even know what a con­fer­ence com­mit­tee is.” In some cases, that’s be­cause they are block­ing those com­mit­tees, where House and Sen­ate dif­fer­ences are hashed out.

If there’s a per­son who em­bod­ies the polit­ic­al evol­u­tion of the cap­it­al, it’s the Roundtable’s Miller. He spent the 1990s as chief of staff to then-Rep. Con­nie Mo­rella, a mod­er­ate Re­pub­lic­an from a Mary­land sub­urb. The U.S. Cham­ber of Com­merce then hired him to lobby the Tues­day Group, at the time a re­l­at­ively large and in­flu­en­tial group of House GOP mod­er­ates. Miller later built the cham­ber’s polit­ic­al op­er­a­tion and ul­ti­mately played a cent­ral role in elect­ing tea-party con­ser­vat­ives in 2010. When the res­ults were in, he re­calls warn­ing more than once that based on the anti-es­tab­lish­ment, an­ti­gov­ern­ment cam­paign rhet­or­ic he had heard, “the re­la­tion­ships are go­ing to be­come much more com­plic­ated and com­plex” between law­makers and the busi­ness com­munity.

If there’s an is­sue that sym­bol­izes those com­plic­a­tions, it’s in­fra­struc­ture. Roads, rail, ports, bridges, air­ports, broad­band — who doesn’t love in­fra­struc­ture? Es­pe­cially in a time of high un­em­ploy­ment, low in­terest rates, and reg­u­lar re­ports about how our in­fra­struc­ture is “crum­bling.” Yet, des­pite sup­port­ers ran­ging from Obama and the AFL-CIO to the Cham­ber of Com­merce, there has been no in­fra­struc­ture in­fu­sion in the past few years. Miller was par­tial to an in­fra­struc­ture bank pro­posed by then-Sen. John Kerry, D-Mass., that would have lever­aged private funds, but it lan­guished with only Demo­crat­ic back­ing. Did Miller try to get some Re­pub­lic­an co­spon­sors? “Yes. And we were nev­er able to.”

Since then, Re­pub­lic­ans have re­acted neg­at­ively to a new Obama pro­pos­al to cut cor­por­ate taxes and use a one­time “trans­ition fee” on re­pat­ri­ated cor­por­ate earn­ings for in­fra­struc­ture pro­jects. Miller, mean­while, is now in­ter­ested in a House in­fra­struc­ture bill in­tro­duced with bi­par­tis­an sup­port. But busi­ness groups did not mount a full-court press on earli­er meas­ures — far from it — and there is no con­cer­ted cam­paign for this one as yet.

Mc­Crack­en says busi­nesses have wound up “get­ting caught up in the cul­ture of Wash­ing­ton, set­ting aside those things that seem to be polit­ic­ally dif­fi­cult.” Even in­fra­struc­ture falls in­to the dif­fi­cult cat­egory be­cause it’s viewed in fed­er­al budget­ary terms as in­cur­ring an ex­pense rather than as cre­at­ing an as­set. Mc­Crack­en says that avoid­ance syn­drome must end, and he thinks it just might. The pre­ced­ent he cites is Fix the Debt, a bi­par­tis­an debt-re­duc­tion ad­vocacy group backed by scores of cor­por­ate lead­ers.

“There was a sense that this is a weird polit­ic­al time and we’ll get past it,” he says. “Now, there’s the real­iz­a­tion that maybe this is the new nor­mal, and we should do something to shake it up.” The next few months will of­fer many tests of his the­ory — and his op­tim­ism.

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