GOP’s political alliance with corporate America on the rocks
Accelerating the House Republicans’ divorce from corporate America is an eagerness among party officials to sign the papers in the belief that the dissolution of this decades-old political marriage will consummate their budding relationship with working-class voters and ensure dominance over the Democrats.
This split is poised to have consequential ramifications in Congress beginning in January, when a new Republican House majority, filled with members borderline hostile to big business, could assume power. Rather than shield corporations from excessive regulations and invasive committee hearings, as in past years, any new GOP House majority is expected to rake executives over the coals. There’s even the possibility they could make common cause with President Joe Biden on certain topics, such as antitrust.
“The Republican Party is so much healthier now that we’ve divorced ourselves from corporate America,” Rep. Jim Banks (R-IN) told the Washington Examiner. Banks, the chairman of the Republican Study Committee, a caucus of conservatives, is a close ally of House Minority Leader Kevin McCarthy (R-CA), who is likely the next speaker, and is running for majority whip in the next Congress, presuming the GOP captures the gavel.
Multiple factors are driving this astonishing political separation, including the inroads former President Donald Trump made with blue-collar voters now spilling over into gains with Hispanics, and the rise of politically active corporations siding with Democrats on cultural issues. But the key development in the breakdown was the decision many corporate political action committees made to cut off donations to congressional Republicans who voted against certifying Biden’s Electoral College victory on Jan. 6, 2021.
Led by McCarthy and House Minority Whip Steve Scalise (R-LA), 147 House Republicans voted, essentially, to overturn an election even after Trump’s grassroots supporters ransacked the Capitol. Republicans insist they were simply honoring the wishes of their constituents who believed the 45th president’s stolen election claims.
They took offense to being blacklisted by corporate PACs after years of running interference for big business on Capitol Hill against Democratic tax and regulatory policies.
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Beyond hurt feelings, there were two significant repercussions that resulted from the move by corporate PACs, under immense public pressure at the time, to halt donations to more than half of the House Republican conference. First, House Republicans discovered they did not need contributions from the business community to keep their campaigns afloat — not by any stretch. Second, and perhaps more importantly, some of them stopped interacting with corporate lobbyists altogether.
For House Republicans on Capitol Hill only since Trump was elected in 2016, that has meant relationships with the business community that are superficial to nonexistent. For Republican candidates seeking the House in the midterm elections, that has translated into zero relationships with corporations whose lobbyists are going to be knocking on their office doors next year and, in many instances, outright suspicion of those corporations.
“A lot of companies are going to find themselves shut out from members who are incoming committee chairs, subcommittee chairs, and leaders,” said Sam Geduldig, a Republican lobbyist in Washington and co-CEO of the K Street firm CGCN. “This is a new class of members that has no interest in building these relationships.”
Federal contribution limits ($5,000 to primary campaigns, $5,000 to general election campaigns) prevent any single donation, or lack thereof, from affecting a candidate’s or rank-and-file member’s congressional bid. Indeed, many Republicans believe avoiding ties to corporate America boosts them politically in key battleground states and traditionally Democratic House districts. But giving by corporate PACs, and the social events hosted to facilitate and encourage that financial support, are invaluable for relationship-building.
Most lobbyists understand this. Geduldig, who worked as a House GOP leadership aide before heading downtown to lobby, certainly does.
He has made nearly $85,000 in personal donations to House Republicans since the start of the 2022 election cycle. (Republican lobbyist Jeff Miller, a close friend and adviser to McCarthy, tops in this category, having given almost $193,000 to House Republicans this cycle.) Geduldig and other GOP lobbyists who spoke with the Washington Examiner for this story have been urging corporate clients to open the PAC spigot before Election Day to preserve, or build, relationships.
Some lobbyists, granted anonymity to speak candidly, say their pleas have fallen on deaf ears. Some corporations are reluctant to donate for fear of public, consumer, or internal employee pressure. Others plan to resume contributions next year, after which they assume Republicans, who are just a handful of seats shy of the House majority, will be in charge. Next year could be too late.
“The main issue is that a majority of the caucus will have been here less than six years and are all ‘MAGA,’” a veteran GOP lobbyist said, referring to the “Make America Great Again” slogan used to identify Republicans as pro-Trump populists. “They will definitely not be as reliable on corporate issues as past Republican caucuses.”
Added a second experienced Republican lobbyist: “We’ve advised those clients that it’s going to be a tougher path for them because no question a new majority is going to keep score on that.” Corporate PACs are due to file their third-quarter contribution disclosures with the Federal Election Commission no later than Saturday. Those documents should offer a window into the business community’s relationship with House Republicans and which corporations are working to preserve connections.
To be sure, there are plenty of Republican lobbyists, at least, who will continue to be welcomed by Republican members for meetings, if for no other reason than their personal giving was robust. Additionally, there are some corporate PACs that might have maintained their good relations with House GOP leadership by donating to the National Republican Congressional Committee, the conference’s campaign arm.
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Meanwhile, the friction between Republicans and corporate America does not mean the party is now anti-business.
The more populist House GOP conference expected in Washington next year will no doubt oppose tax increases and increased levels of government regulation, believing such policies put downward pressure on economic growth and workers’ wages. And Republicans who are suddenly admonishing corporate America for adopting and advocating “woke” social policies and vowing retribution emphasize the GOP is a big supporter of small businesses — which, with up to 500 employees, can run large.
“While most small- and medium-sized businesses continue to be run by people with common sense and patriotism, that is largely untrue of our large corporations,” a Republican Senate aide said, signaling the possibility of some rough sailing for big business on the north side of the Capitol if the GOP wins the majority.
Of course, the oil and gas industry, and others prioritized by congressional Republicans and their constituents, can rest assured they are safe no matter how much House Republicans are interested in picking a fight with big business. This sector, under regular attack from Biden and congressional Democrats, and a few others did not sever ties with the GOP after Jan. 6.