Business And The GOP

Dec. 21, 2004
Is the party over?

These should be heady days for business interests on Capitol Hill. For the first time in 66 years, the Republican party---traditionally the "party of business"--controls Congress for a fourth consecutive year. Strangely, though, as the 105th Congress lurches through its second session, business lobbyists are having a tough time getting their legislative way. And some of their strongest opposition is coming from--who'd have guessed it a few years ago?--Republicans. There hasn't been a total split yet. Business isn't about to join organized labor, the environmental movement, and the consumer lobby as an ally of the Democratic party. Undeniably, though, business' once-cozy relationship with the GOP is showing serious strain. The falling-out, which began to surface in the 104th Congress, exploded into the open just after the 1996 election when then-Republican Party chairman Haley Barber chastised large companies in the Business Roundtable for insufficient financial backing of GOP candidates. Since then---all last year and so far this year--a surprising number of Republican lawmakers have failed to support such business-backed legislation as fast-track trade negotiating authority for the White House, funding of the Overseas Private Investment Corporation, Most Favored Nation trading status for China, and currently, increased appropriations for the International Monetary Fund. On these issues business' biggest ally has been a Democrat--President Clinton. To be sure, all these issues are related to international trade. But on domestic issues, too, many Republican legislators---especially in the House--are defecting from the business position. Last year, notably, unusual GOP support helped enact a minimum-wage increase that was anathema to companies. Another boost in the wage seems likely this year. And then there's PARCA (full name: the Patient Access to Responsible Care Act), a bill that would clamp sweeping mandates on company-provided health-care plans and boost premiums by nearly a quarter. Business groups revile the measure. It's something you'd expect liberal Democrats to sponsor. Yet, the bill's chief authors are two Republicans--Sen. Alphonse D'Amato (N.Y.) and Rep. Charlie Norwood (Ga.), the latter a legislator with a 97% favorable lifetime pro-business voting record as scored by the U.S. Chamber of Commerce. Eighty-eight other Republicans signed on as cosponsors. As evidence of the widening GOP-business rift, Norwood recently wrote in the Washington Post: "The Republican leadership has to recognize that 'life, liberty, and the pursuit of happiness" applies to all Americans, not just the business community. If they don't, these folks may find that their hold on the majority in Congress may be the next victim of managed care." Observing all these goings-on is the Business-Industry Political Action Committee (BIPAC), a business-sponsored Washington organization that advises corporate political action committees (PACs) on candidates that merit support. In a memo to BIPAC members, its top two executives, Charles S. Mack and Bernadette A. Budde, write: "How ironic that, after decades of GOP rhetoric pledging fealty to free enterprise, global competition, and less government interference, business cannot rely on a Republican Congress to advance these principles....Business, not unreasonably given historic GOP positions, has expected Republicans to be, vote, and speak pro-business on all major economic issues." Instead, say Mack and Budde, "Communications between the business community and Republicans have become a dialog of the deaf. Both sides are talking past each other, and seem to have lost their common language and shared points of view." As part of the reason for what they call the "growing disconnect between business and the GOP," Mack and Budde point to Congress' expanded agenda. "When the turf was the familiar mantra of balancing the budget and cutting taxes, everyone was comfortable," they explain. But once Congress moved into such areas as health care and the environment, legislators started going their own ways. "When Congress regulated only the domestic marketplace, it was easier to know where everyone stood," they say. To be sure, the fracture with the GOP makes life more difficult for business, complicating both lobbying and decisions about corporate political-action committee (PAC) contributions to political candidates. In the long run, however, the trend could be healthy. For too long, the Republican party has had the reputation of being a toady for business. And business has had the reputation of espousing right-wing positions often at odds with the mainstream public opinion. The reputation hurts both.

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