The Washington Post had a terrific story yesterday that examines which companies funded the campaigns of Ted Cruz and other Republicans who supported shutting down the government and fueled the debt ceiling brinksmanship. It turns out that a lot of major banks and firms gave big to those candidates:
The American Bankers Association gave more money over the past two election cycles to GOP lawmakers who in effect voted to allow the United States to default on its debt than those who voted against that scenario.
The ABA contributed $2.2 million to lawmakers who ultimately ignored the group’s warnings
The story reveals that Ted Cruz and other lawmakers who voted against the final debt ceiling deal received substantial donations from financial services companies. Yet, big business was adamant that the debt ceiling had to be raised. The Chamber of Commerce urged lawmakers to vote yes on the final deal, even making it a “key vote.” A number of CEOs took to the media to warn of the consequences of breaching the debt ceiling. They had no interest in messing around with it. Now that the business community has seen the willingness of Tea Party congressmen to cause an international financial crisis, will they begin funding the campaigns of moderate Republicans or even Democrats? It’s unlikely.
Big business shouldn’t be surprised by the debt ceiling brinkmanship. Many candidates ran on a commitment not to raise the debt limit. No one was surprised that Cruz and Tea Party conservatives were willing to let us default. Why did the Chamber and other large companies support these candidates if they knew that they were willing to cause an international financial crisis? The answer is that there are many other issues that big business cares about. They want fewer regulations and lower taxes, both policies that Republicans favor. On organized labor, big business and the Republican party have never been far apart.
As Alex Pareene notes, where the Republican Party and business community actually differ is on tactics, not policy (except immigration). The Chamber wants Obamacare repealed just like the Tea Party does. They differ on how to accomplish that. That’s why big business is so supportive of the Republican Party, Tea Partier or not.
The Tea Party has also proven to be a terrific vehicle for the business community to advance its agenda. It provides grassroots organizing and a vocal base that forces lawmakers to stick to an ultra-conservative platform. Then, the lobbyists come in and use that anger to push for ideas popular amongst big business. Look at how the debt ceiling deal unfolded. The policy concession the Republicans were pushing for on Obamacare was the repeal of the medical device tax, a huge win for that industry. Remember when Congress was fighting over the sequester and its immediate harmful effects? The Tea Party jumped on the flight delays as an area where the Obama administration was intentionally inconveniencing travellers to draw attention to sequestration. Eventually, Congress approved a bill to give the Department of Transportation more flexibility with its funding to alleviate the delays. Who would benefit most from that relief? Business travellers jetting around the country each week. It all began with Tea Party anger.
In addition, the Tea Party has dragged the policy conversation to the right. Despite its harm to the economy, spending cuts have been a prime goal of the Tea Party and big business. The Chamber knows that if it the government doesn’t cut spending significantly, it will be forced to raise taxes on the rich. Even if the austerity hurts the economy in the short-term, it’s an acceptable cost in order to keep taxes low in the long-term. More than any other constituency, the Tea Party is responsible for the laser-like focus on deficit reduction. The members most committed to cutting spending are the ones who are most conservative.
This gives Republicans little reason to challenge or turn against the Tea Party. But this alliance is not unbreakable. If the Tea Party begins pursuing strategies that actively harm and set back the goals of big business, it could cause them to rethink their support of conservative candidates. The main way this happens is if the Tea Party’s tactics endanger the GOP’s majority in the House. The government shutdown and debt ceiling brinksmanship have sent approval of the Republican Party to historic lows. Yet, thanks to gerrymandering, Republican districts are mostly safe. It’s still highly unlikely that Democrats take back the House. But if that becomes more likely, big business could start pushing for more mainstream Republican candidates, especially in competitive districts where a Tea Partier faces a moderate challenger in the primary,
It’s tough to imagine a situation where the Tea Party’s tactics become so extreme so as to directly put the business community’s goals at risk. Is there anything the Tea Party could do that would result in higher taxes or increased regulation? The debt ceiling is the one area where the Tea Party could put the economy at risk, but Boehner was never going to allow us to default. It wasn’t going to happen and big business knew it. They weren’t scared of Cruz and Co.’s tactics, because they always knew that Boehner was bluffing. Indeed, the only risk the business community sees in the Tea Party is that its radical stances could alienate so much of the electorate that Democrats take back the House and enact a string of liberal policies. Until that becomes a real possibility though, don’t expect big business to break off from the Tea Party. It’s way too valuable a partnership for them.