Business leaders rethink relationship with GOP

They aren't exactly siding with Democrats. Instead, executives are looking to support challengers to the Tea Party.

By MSN Money Partner Oct 17, 2013 1:32PM
Image: Businessman reading newspaper © A. Chederros/ONOKY/Getty ImagesBy Laura Meckler, The Wall Street Journal

The budget stalemate that had the U.S. flirting with default has left business and the Republican Party, longtime political allies, at a crossroads.

In interviews with representatives of companies large and small, executives predicted a change in how business would approach politics. They didn't foresee a new alignment with Democrats but forecast backing challengers to Tea Party conservatives in GOP primaries, increasing political engagement with centrist Republicans and, for some, disengaging with politics altogether.

Many business executives say they were dismayed that some Republicans didn't heed their warnings that closing the government and risking default would hurt the U.S. economy. Others expressed disgust with Washington politics in general. All said the crisis could have been averted with a more pragmatic approach.

The decadeslong relationship between American business and the GOP is certainly likely to endure, with business still feeling a kinship and shared goals with many in the party, including a push for lower taxes and lighter regulation.

But the conversation among businesses is "characterized by tremendous frustration and angst," said Dirk Van Dongen, president of the National Association of Wholesaler-Distributors, a trade group. "Because at the end of the day, the system is supposed to produce results, and the failure to produce results has consequences."

The episode has prompted top business lobby groups, including the U.S. Chamber of Commerce, to consider taking sides in Republican primaries next year in hopes of replacing Tea Party conservatives with more business-friendly pragmatists.

Mark Thierer, chairman and CEO of Catamaran Corp., a major pharmacy-benefit manager, said business's relationship with the GOP "is going to need a retooling," adding that he would continue to make modest contributions to centrists. "I am not going to give up on the Republican Party -- I am going to encourage moderation," he said.

This kind of reaction challenges the long-standing relationship. Tensions emerged after the GOP takeover of the House in 2010, fostered by an empowered group of conservatives who saw companies seeking tax breaks and government grants as an embodiment of a traditional mode of politics they wanted to break.

The Chamber of Commerce, which has given tens of millions of dollars to Republican candidates, is researching what challengers might be viable next year. It urged House members to support the final compromise by including Wednesday's vote in the scorecard it uses when weighing possible endorsement of members of Congress. By contrast, FreedomWorks, which backs Tea Party candidates, urged a "no."

Bruce Josten, the Chamber's top lobbyist, said he has pushed members of Congress to keep the government open and to understand that flirting with default is "just plain stupid." To Republicans who tried to use the budget battle to unravel the health care law, he said: "They've accomplished nothing."

Russ Walker, national political director for FreedomWorks, said any effort to displace Tea Party candidates will fail. "The grass roots is going to choose those people who will speak up for them," he said.

For the Tea Party bloc of the GOP, the priority has been trying to stop implementation of the new health-care law, which its members strongly oppose, even if it meant closing the government. They dismissed warnings of economic peril, saying it is more crucial to curb spending.

"A fight on principle is always worth it," said Rep. Scott Garrett, R-N.J., who backed the Tea Party effort, while heading into a House GOP strategy session Wednesday.

The group's goals are shared by many executives, business lobby groups and other Republicans, but many criticize the tactics, saying they could never succeed given Democratic control of the Senate and the White House.

Maurice Taylor, chairman and CEO of off-road tire maker Titan International of Quincy, Ill., was one business leader who supported the tactics of Tea Party-backed Republicans in the budget fight. For his taste, Republicans in Congress aren't focused enough on controlling the federal bureaucracy. "It's like a cancer it just keeps growing," he said. "The House is doing a pretty good job. I hope they stick to their guns. . . The Tea Party in 2014 is going to be stronger than they've ever been."

Businesses worry that Congress will now be unable to tackle other big issues on their agenda, including immigration policy and overhauls to the tax code and entitlements. Success in any of these areas will require compromise, something business lobbyists and leaders say has been sorely lacking.

John Engler, the former Republican governor of Michigan who now heads the Business Roundtable, a trade group, said the normal legislative process -- where bills are debated and passed by each house of Congress, and then married together -- encourages compromise. "Today we have a significant number of people who don't want to compromise because they think they can win something that's been unwinnable," he said.

David French, top lobbyist at the National Retail Federation, guesses that business lobbies will back somewhere between 12 and 25 business-friendly Republicans in primaries next year. "We don't like having a very high stakes poker game where we're dealt out and nobody's going to win," he said.

Even before the partial shutdown two weeks ago, Republican executives pressing for an immigration overhaul were venting frustration that the full House has been unwilling to consider any immigration legislation, including a bipartisan Senate bill, in the face of opposition from one wing of the party.

Norman Braman, a Miami businessman and GOP donor, said he is asking candidates who solicit campaign contributions for their position on immigration and will be reluctant to support those who don't back a revamp. "Those of us who have been active and supportive of the party have a duty to express our feelings," he said.

Several business executives said they were counting on establishment GOP leaders, including House Speaker John Boehner of Ohio and House Budget Committee Chairman Paul Ryan of Wisconsin, to move immigration and future fiscal legislation. But those same leaders struggled to steer the House toward a fiscal compromise and struggled to pass another business priority, the farm bill, amid conservative demands to curtail food stamps.

Some say the key will be engaging Main Street business leaders to press upon their representatives the need for compromise. Others predict business leaders outside Washington will disengage altogether, disgusted by the results.

Hal Sirkin, a senior partner with the Boston Consulting Group, said his conversations with executives in a range of industries suggest widespread frustration with the Republican party. The budget battle "is giving them pause to reconsider everything that they believed" about conservative support for business, he said. Some executives have told him they plan to pull back their support for the party "as a message to say, this is not acceptable. You can't trash the business community," he added.

"Right now, I'd have a hard time voting for any incumbent," said Kevin Hartford, president and co-owner of Alle-Kiski Industries, a Leechburg, Pa., maker of metal parts used in power generation and rail locomotives, among other things. Mr. Hartford said he typically supports Republican candidates but now believes the party "has become fractured, lacks vision, is leaderless and discombobulated."

-- Rachel Feintzeig, James R. Hagerty, Joann S. Lublin and Bob Tita contributed to this article.

More from The Wall Street Journal

Oct 17, 2013 2:24PM
A loyal opposition is a necessity.  A disloyal group of Tea Party fanatics only causes an equal and opposite reaction.  Look at the destruction and terrible loss of life in countries undergoing wars between the extremists.  The Palestinians and the West Bank settlers.  The recent Northern Ireland Troubles.  The current situation in Syria and Iraq and Afghanistan. Is that where we are headed?  Rigidity in thought and denial of reality are hallmarks of extremists.  I think we've seen enough of that in the Tea Party's blind hatred of Obama and the Affordable Care Act--and in the price paid by the economy and especially by the laid-off workers.
Oct 17, 2013 2:31PM
Well it is clear that the only thing the Republicans want to stop spending money on is SS, Medicaid, Medicare, education and food stamps. Just look at the perks they were willing to spend on even though they said we have to stop spending!
Oct 17, 2013 2:32PM
Does McConnell own stock in the company that he just got 2.5 billion for? We know it is an election year for him. Yet, you all think the Dems are the only ones that suck the system dry.
Oct 17, 2013 3:13PM
The fanatics known as the tea party along with that big as*hole Cruz needs to go. They don't care about anything but themselves. I just read the shutdown cost 24 billion dollars. They hate spending money they say, but they sure do love wasting it, beating a dead horse over and over again. I hear that they will try again and go after the ACA which really shows they have a big mental defect.
Oct 17, 2013 2:37PM
This is NOT the way to budget and run the country. This is not really negotiations it is bartering and bartering for each congressmen's  individual benefits. Doubt this is what our fore fathers had in mind and-- hey rest of the world, we just want to give you an example of democracy and by the way it can get messy... or crooked.
Oct 17, 2013 2:32PM
Hey, it will all happen again since it is the holiday season and Congress needs a break...
Oct 17, 2013 3:11PM

Probably the only time I agreed with Romney was when he said the Repubs spent too much

time sticking up for big business and not enough time helping small business.

Oct 17, 2013 3:28PM

business wants tax breaks and other stuff, geesh how do u balance a budget when you cut taxes loss of revenue isn't going to balance it.  How many of you think the ceo's of bank of america, gm, and general electric would go to the chairman of the board and say i need you to cut my wages so i can pay off my debts.


I bet you not one ceo would do that so why do they think the government can do it by cutting taxes and balance their budget.  We have one loop hole in our taxes that lets U.S. companies to buy a company in another country and not have to pay taxes.  You don't even have to close the tax loop hole to do that just say your going to tax every product that the foreign company is bringing into the United States.  Hell you can cut the pentagons budget by 50 or 60 billion a year.  Russia and China during the cold war found a arm race is to damn expensive especially since russia and the united states have enough nuclear bombs to destroy this world around 4 times. Russia and china have really slowed down on building war machines and are spending it on infrastructures which is what our country needs to do.  tens of thousand bridges need to be rebuilt, rail roads tracks need to be retailored to fit faster speeds, highways need to be fixed.  These build work and very high paying jobs also.  I don't know why the democrats and the republicans can't get together and see this and work out away to balance the budget and get our infrastructure fixed. Also why not stay out of other peoples troubles like iraq, afghanastan, syria, and quit giving money to other countries.  I am ashamed to be an american because our government only looks out for their selves not the people and our country.

Oct 17, 2013 2:33PM
What ever happen to immigration and tax reform?
Oct 17, 2013 2:52PM
GOOD!  Elected representatives are suppose to represent the people that put them in office.  Not just big business.  That is one of the reasons things are so disconnected in DC.  Big business has the elected officiasl in their back pockets.  Its about time someone elected to office is going to bat for the people of their district! 
Oct 17, 2013 3:20PM
There are just too MANY special groups and even factions within groups, and individual lobbyists swaying the federal governments policies and actions, and then there are the contractors from all private industries with their hands in the federal government's pockets (aka tax payer pockets)

If voters wise up and demand that all the distractions and "noise" from everyone clamoring around D.C. to get attention and funds for their pet projects CEASE & BECOME ILLEGAL, the government can focus and do a better job around its core responsibilities and act on the basis of scientific and common sense consensus, and majority will.  

Oct 17, 2013 4:02PM
for any goverment to work there has to be compromise. neither party has all the answers. the problem with the tea party is they don't believe in compromise. well news flash, without compromise nothing gets done. they love to wrap themselves in one of the biggest compromises there ever was, the constitution. we would'nt have one today if people of diffferent minds had'nt come together and worked things out. no body got everything they wanted and thats the way our goverment is designed to work. but when you have extemist on either side goverment does'nt work and nothing gets done at all. i don't blame boner, no one can control the crazies in the tea party but the good news in many of them will be gone next year
Oct 17, 2013 4:21PM
This is what the Republicans demanded:
*Defund Obama Care
*Delay Obama Care
*Delay Individual Mandate
*Deny Coverage to the President 
*Deny Coverage to the Cabinet
*Deny Coverage to Congressional Staffers
*Deny Birth Control Coverage
*Approve Keystone Pipeline
*Means-Testing for Medicare
*Change Federal Employee Pensions
*Expand Oil Drilling
*Block Net Neutrality
*Tort Reform
*Weaken Regs for Coal-Fired Power Plants
*Tax Code Changes
*Thwart EPA Coal-ash Regulations 
*Repeal Medical Device Tax
*Change Rules on Dept Ceiling 
Oct 17, 2013 3:55PM

""Oh yeah, businesses that count on Capitalism and a free market are going to be rushing to join the progressive socialist party of share the wealth."""


And why not?  They seem to have no problem joining the Peoples Republic of COMMUNIST China.

Oct 17, 2013 4:31PM
Anyone who dares go against the status quo will pay dearly.  Could it be the extremists are those who prop up a system that will soon fail?
Oct 17, 2013 4:40PM
Opinions change dramatically over the course of time.  Decades from now, when America is working through its bankruptcy, Tea Party members may actually be viewed as a small holdout of rational individuals, even idealists or heroes, who were trying to institute policies that would divert the bankruptcy.  All Democrats have done is continue the status quo of deficit spending and eventual economic ruin by stealing more wealth from future generations to operate today's government.

In the future, the people who judge will be the people actually going through America's bankruptcy, not the weak-minded people of today, who found it easy to use government to steal from tomorrow's generations.  What will these future Americans have to say about the events of today?  And what will they say about YOU?  If you live long enough you'll have to meet them and face them.
Oct 17, 2013 2:20PM
The GOP has been out of power for 4.5 years.  They are not in a position to buy "big business."  It is the same parallel as the dims buying the welfare / food stamp queens.  Until, if ever, the GOP returns to power, business will follow the handouts.
Oct 17, 2013 3:39PM
Oh yeah, businesses that count on Capitalism and a free market are going to be rushing to join the progressive socialist party of share the wealth.
Oct 17, 2013 2:37PM

The most foolish myth in political circles is that the 1% are big republicans.   Look where the majority of the 1% live.  The New England corridor and Southern Cali are the home of the vast majority of these people.  Just look at the home prices in these areas for proof of where the big money is.  How many republican senators and reps are from these areas?  You can count them on one hand.  My days spent with the Private Equity people in New York and Conn. taught me these guys grease the pockets of the Democrats not the Republicans.

I have never understood the thought that the Republicans are the party of Rich.  Were Kennedy, Roosevelt republicans?  Are these not the two riches presidents of the past 100 years!!!

I like everybody else am not sure who the republicans represent but to link them with the 1% is totally unrealistic.

Oct 17, 2013 3:03PM
The lines or the "opposing forces" are getting more and more blurred . And the reins of power are more blurred .......Democrat or Republican  a Dictator is a Dictator It does not matter
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