The recent fiscal crisis has opened a major rift between the tea party wing of the Republican Party and business groups that traditionally have backed Republicans, with many business leaders now vowing to get involved more in GOP primaries to try to counter insurgent candidates.
Tea party leaders are defiant, saying they will not change course despite criticism from the U.S. Chamber of Commerce, Business Roundtable and other top business groups.
But business leaders argue that the scorched-earth tactics used by tea party Republicans during the 16-day shutdown and debate over raising the federal government’s borrowing limit marked the fourth time since the GOP took control of the House in 2011 that tea party adherents precipitated a governmental crisis that zapped consumer and business confidence, raised uncertainty and exerted a major drag on economic growth.
Besides encouraging more business-friendly candidates in primary contests, business groups are rallying behind establishment Republicans such as Senate Minority Leader Mitch McConnell, the Kentucky Republican who is being targeted by tea party activists for brokering a deal to temporarily raise the debt ceiling and reopen the government, while launching a negotiation with Democrats over budget cuts and proposed tax and entitlement reforms.
Business executives agree with many tea party goals such as cutting the deficit and reforming entitlement spending, but they argue that conservative lawmakers have erred in their tactics and wounded the economy by driving the government with increasing frequency into states of crisis and dysfunction — this time for the ultimately unsuccessful cause of trying to force President Obama to cancel his health care law.
“There’s no question that this month’s government shutdown saga has been a spectacular failure,” said David French, senior vice president and lobbyist at the National Retail Federation, whose members constitute the nation’s largest group of employers.
Retailers were particularly frustrated that the long-running feud and standoff between the parties — which has been postponed until early next year — threatens for the second year in a row to spoil the critical Christmas shopping season, when one-quarter of all U.S. retail purchases are made and an even larger share of retail profits are made.
Besides the retail federation, the U.S. Chamber of Commerce, the largest U.S. business lobby, “will be getting more involved in primaries this cycle,” said Blair Latoff Holmes, the organization’s executive director for media relations.
He said the Chamber of Commerce has kept tabs on legislators’ votes on the debt ceiling and government shutdown as well as their positions on issues such as trade, immigration, and entitlement and tax reform, with an eye toward deciding which candidates to support.
Tea party independence?
Tea party leaders are defiant, threatening to run candidates as independents if business groups defeat them in next year’s Republican primaries. Already, conservative primary challengers have emerged to take on Republican Senate and House incumbents in states such as Kentucky, Tennessee, Idaho, Texas and South Carolina.
Judson Phillips, the founder of Tea Party Nation, called business leaders who oppose the tea party “RINOs” (Republicans in name only) and “crony capitalists” who are “feeding at the government trough” and are interested only in “making the trains run on time” rather than changing the unsustainable course of government spending.
“Business is overreaching,” he said of their plans to oppose insurgent candidates in Republican primaries.
“Business can bring a lot of money to the table, but they can’t bring boots on the ground” in a way that rouses public support for Republican candidates the way the tea party does, he said.
But from Wall Street to Main Street, all of the major business associations, including the Chamber of Commerce, the retailers, the Business Roundtable and the National Association of Manufacturers lobbied for quick passage of an increase in the nation’s debt limit and end to the shutdown to prevent another major economic slowdown at a time when many businesses hoped the economy would be picking up speed.