WASHINGTON — There was a time, with a Democrat in the White House and a red wave building ahead of midterm elections, when the U.S. Chamber of Commerce poured approximately $40 million exclusively into Republican campaigns. The year was 2014, and the granddaddy of corporate lobbying groups in the nation’s capital helped the GOP expand its hold on the House of Representatives by 13 seats and powered the party to majority control in the Senate through a massive gain of nine seats.
Corporate America and congressional Republicans, brothers in arms, as it were, against the scourge of higher taxes and thorny government regulations.
These days, in the age of cultural “woke-ism,” or enlightenment — take your pick, the chamber can be found making common cause with (some) Democrats. And just weeks ahead of Election Day, spending on Republican congressional candidates by this reliable cheerleader for conservative fiscal and regulatory policies, as well as from other organizations that exist to protect corporate America’s political and financial interests, is negligible.
The Republican Party is but one seat shy of capturing the Senate and virtually a lock to take the House, possibly by a lot. They’re fighting to win not just a majority, but a governing majority to maximize their negotiating leverage versus President Joe Biden. Yet many political action committees, run by some of the country’s most prominent and presumably influential corporations, are sitting on piles of cash for most of the year rather than greasing the wheels of the Republicans in line to wield enormous authority over big business — i.e. them — as chairmen of key policy committees and subcommittees.
This stinginess could be remembered as the final act in the GOP’s slow-motion breakup with corporate America, a relationship-unraveling years in the making. It’s a jarring split that stands to reshape American politics, furthering the realignment of the Democratic and Republican parties and upending policymaking on Capitol Hill.
Contra The Walker Brothers, who wailed in their memorable 1965 ballad that “breaking up is so very hard to do,” Republicans couldn’t be happier.
Representative Jim Banks, an Indiana Republican aligned with House Minority Leader Kevin McCarthy of California and running for majority whip in the next Congress, tells me recently the deepening GOP hostility toward big business — after a decades-old political bond that seemed unbreakable — is not “a matter of retribution.” Rather, Banks explains, it’s “a matter of representing the interests of our voters.”
Well, yes and no.
Like all relationships gone bad, this one is a tale of resentment, hurt feelings, and the not quite inconsequential matter of one spouse’s behavior embarrassing the other in front of the neighbors, so to speak. But it’s also true that corporate America and Republicans in Washington — especially Republicans in the House — have simply fallen out of love. Hey, it happens sometimes.
Republican resentment of corporate America, and the hurt feelings that typically accompany it, exploded into the open in the aftermath of the Jan. 6 ransacking of the U.S. Capitol. After grassroots supporters of former President Donald Trump, days away from his term expiring, violently overwhelmed the Capitol in a bid to stop Congress from certifying Biden’s Electoral College victory — in other words, overturn the 2020 election — a majority of House Republicans, led by their top leaders, McCarthy and Minority Whip Steve Scalise of Louisiana, went ahead and voted against certification anyway.
Many of the PACs run by big business responded by doing some halting of their own, as in, they very publicly announced an end to financial contributions to any of the 147 House Republicans (and seven Senate Republicans) who had voted against certifying electors from various states. Congressional Republicans, insisting then and now they were only doing the bidding of their constituents, were taken aback. Still are taken aback. The result? Simmering hostility toward corporate America poised to rear its head if (when) a new House GOP majority assumes power in January.
In other words, corporate execs should start preparing to be hauled up to Capitol Hill and grilled in committee by Republican chairmen. Tech firms should start looking over their shoulder at the possibility of House Republicans collaborating with the Biden administration on antitrust issues. Corporate America should think about looking elsewhere, wherever that might be, for a new political shield against Democratic and union attempts to further regulate their business practices. (No, Republicans, philosophically opposed to more regulation and higher taxes, won’t help Democrats and Labor in that effort, they just might do a whole lot less standing in their way.)
“A lot of companies are going to find themselves shut out from members who are incoming committee chairs, subcommittee chairs, and leaders,” warned Sam Geduldig, a Republican lobbyist in Washington and co-CEO of the K Street firm CGCN, when I spoke with him for a story on this topic for the Washington Examiner. “This is a new class of members that has no interest in building these relationships.”
But that’s only half the story.
For Republicans who have been in Congress for a while, this resentment was building long before that fateful January 6th.
The GOP has been running active interference for Corporate America for years, pushing back against Democratic presidents and Democratic majorities in Congress that sought more power for labor unions, more power for government regulators, and more in the way of taxes on their profits. It was a mutually beneficial relationship: Republicans did what they were philosophically inclined to do anyway, big business rewarded them with campaign contributions, and everybody was happy. But particularly in the wake of the death of George Floyd, a black man killed by white Minneapolis police officers, this blissful arrangement has been crumbling.
I say particularly because even before Floyd’s death, a new generation of young, politically active corporate employees were advocating internally for their executives to take public stands on polarizing cultural issues, be it racial justice, environmental justice, economic justice, voting rights, reproductive rights, gay rights, transgender rights — or against something Trump said or tweeted that day. Basically, all things very well-meaning but also very liberal, or “woke” if you will. And all things very much at odds with Republicans on these societally searing cultural issues.
After Floyd, it’s like a dam broke, and corporate CEOs acquiesced to their employees, or in some instances, to fears of a consumer backlash. Then, Jan. 6th happened. Then the money dried up. And Republicans took offense. Oh my, did they take offense. It’s like a spouse puts the other spouse through medical school, then the newly minted doctor, with a doctor’s salary, needs time apart and a new apartment and time to experience this new, wonderful life that’s suddenly for the taking. And the other spouse, naturally, finds the whole thing not just disappointing, but completely galling. That’s how Republicans tell their side of this political version of Kramer vs. Kramer.
But then something unexpected happened.
Many House Republicans discovered they didn’t need corporate America’s cash to get by. Their political operations were able to raise enough, online in small amounts from grassroots donors and from other sources, to take the sting out of the loss of PAC donations, which under federal election law, are limited to $5,000 per candidate per primary, and another $5,000 per candidate per general election campaign. This is sapping any motivation to repair relationships with big business and turn the contribution spigot back on for 2024.
Veteran Republican lawmakers, those around since before Trump began his wholesale renovation of the party in 2015, are in a slightly different camp. Their connections to corporate lobbyists and executives are managing to persevere. But for the increasing number of populist Republicans who came to Washington in the Trump era, ties to corporate America are thin, if that. And those elected in 2020? Those poised to advance to Congress this year? Try virtually nonexistent.
To some degree, this isn’t even a story about jilted lovers anymore; it’s a story about perfect strangers.
“Republicans in the past focused on corporate priorities. This majority is going to be focused on undoing woke’ism,” says a veteran Republican lobbyist who has House GOP leaders on speed dial, speaking on the condition of anonymity to speak candidly. “This is a caucus that will be very populist in nature. They’re not coming to Congress to bring home the bacon like members did in past.”
Trump tends to catch the blame for all of this. He’s taken a wrecking ball to the party, after all, and infused with his populist pugilism, inspiring conservative purists far more ideological than the transactional former president to run for office and make good on the “MAGA” vision he has popularized in his fiery campaign rallies and social media screeds. And Trump does deserve some credit. But plenty of responsibility, more so, in fact, lies with … the voters.
Politicians are just like you and me. They want to get a job and keep a job. In turning away from their longstanding alliance with corporate America, they are responding to incentives.
Over the years, the Republican Party has absorbed more and more voters, including from the lionized working class, who had typically voted for Democrats because of alignment on liberal fiscal and foreign policy issues. The motivating force in this realignment has been their growing differences with the Democratic Party over cultural issues — think abortion rights, gun rights, marriage equality. These voters looked at big business with suspicion. Corporate executives were the people who fired them or laid them off.
Understanding the voters who predominate in the Republican Party today, compared to even just a decade ago — it’s only natural GOP ties to corporate America would fray.
That the Republican Party is now more blue-collar Main Street and less white-collar Wall Street also explains why small businesses, which can actually be quite conglomerate-like, and classic corporate sectors like oil and gas, defense and a few others, are surviving the break-up. Even rather larger small businesses, the sort that employ hundreds of workers across multiple states and communities, are perceived as having local roots and operating in the national interest.
Meanwhile, many of the GOP’s former Democratic voters who don’t trust big business make a big exception for energy and defense-related industries, and a few others. Why? It’s where they work. There’s another aspect to this: The PACs controlled by corporations in these industries did not stop contributing to congressional Republicans after January 6, 2021.
“The Republican coalition is much larger than it used to be. It used to be a combination of the country club and the country church. Now it’s bigger, to include secular, blue-collar people who used to vote for Democrats even as the Democratic Party inched away from them,” says Brad Todd, a Republican media strategist and co-author of The Great Revolt; Inside the Populist Coalition Reshaping American Politics.
“Eventually, that led them to become Republicans, and in so doing, they changed Republican economic tenets,” he adds. “Every party is just the median opinion of the voters in it.”
For those Reagan-era Republicans out there yearning for some sense of normalcy, or for corporate executives looking for a reprieve: Congratulations, you have the U.S. Senate.
Now, there is a possibility some fresh populist blood is poised to shake up the staid Republican conference. Maybe J.D. Vance from Ohio, maybe Blake Masters from Arizona, maybe Don Bolduc from New Hampshire. They would join some existing populist agitators in the Senate GOP ranks — Senator Ted Cruz of Texas, Senator Josh Hawley of Missouri, and on matters relating to the business community, Senator Marco Rubio of Florida. Still, most Republicans serving in the Senate in the 118th Congress are going to be a lot more circumspect of calls from their GOP colleagues in the House, and a few other quarters of their party, to give corporate America the Heisman.
That’s especially true of a leadership team that will still be helmed by Minority Leader (possibly majority leader) Mitch McConnell of Kentucky, who, try as Trump might, isn’t going anywhere. There’s also the matter of the legislative filibuster, which Republicans have no intention of scrapping, and the utility of which Democrats are sure to rediscover if the GOP reacquires the power to set the floor agenda.
So don’t look for the same hostility from Republicans toward corporate America on the north side of Capitol Hill as on the south. In fact, look for more of the same.
“McConnell recognizes that he needs to be pro-business. It’s an important part of his coalition,” said Scott Reed, a Republican operative who used to run political operations for the U.S. Chamber of Commerce. “So, while some rhetoric on business community will be tough, the leader will steer the ship properly and you won’t see the schism you have in the House.”
David M. Drucker is a senior correspondent with the Washington Examiner and author of “In Trump’s Shadow; The Battle for 2024 and the Future of the GOP”
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