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Tuesday, November 25, 2014         

NEW YORK TIMES


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For 'party of business,' allegiances are shifting

By Jackie Calmes

New York Times

POSTED:



WASHINGTON » Not for the first time, the White House made known Monday that top administration officials had reached out to corporate executives for their help in getting Republicans in Congress to compromise on pending budget issues. But as both President Barack Obama and America's chief executives are finding, today's Republican Party is hardly so quick to bow to big business.

Corporate chiefs in recent months have pleaded publicly with Republicans to raise their taxes for the sake of deficit reduction and to raise the nation's debt limit without a fight lest another confrontation like that in 2011 wallop the economy. But the lobbying has been to no avail. This is not their parents' Republican Party.

In a shift over a half-century, the party base has been transplanted from the industrial Northeast and urban centers to become rooted in the South and West, in towns and rural areas. In turn, Republicans are electing more populist, anti-tax and anti-government conservatives who are less supportive — and even suspicious — of appeals from big business.

Big business, many Republicans believe, is often complicit with big government on taxes, spending and even regulations, to protect industry tax breaks and subsidies — "corporate welfare," in their view.

"One of the biggest lies in politics is the lie that Republicans are the party of big business," Ted Cruz, a new senator from Texas and a Tea Party favorite, told The Wall Street Journal during his 2012 campaign. "Big business does great with big government. Big business is very happy to climb in bed with big government. Republicans are and should be the party of small business and of entrepreneurs."

The tension, so evident last month in the tax fight over the fiscal deadline, is apparent again as Obama and a new Congress contend over the even more pressing need to increase the nation's debt limit next month.

Big business is so fearful of economic peril if Congress does not allow the government to keep borrowing — to pay creditors, contractors, program beneficiaries and many others — that it is nearly united in skepticism of, or outright opposition to, House Republicans' demand that Obama first agree to equal spending cuts in benefit programs like Medicare and Medicaid.

That explains the administration's outreach to corporate chiefs, like Monday's conference call. Obama wants business' support to buttress his vow that he will never again negotiate over so essential an action like he did in 2011, when the nation flirted with default and the economy suffered. Vexing Republicans, many business leaders are siding with him.

"I'm agreeing with the president — you should not be using the debt limit as a bargaining chip when it comes to how you run the country," said David M. Cote, chief executive of Honeywell, and a Republican. "You don't put the full faith and credit of the United States at risk."

As a new warning was issued Tuesday about a possible credit downgrade, even the hard-line conservative group Americans for Prosperity, financed by the billionaire Koch family, urged Republicans not to use the debt limit as leverage for deep spending cuts.

Another flash point between Republicans and corporate America: Even as they pocket big campaign contributions from business, many Republicans resent that the donors play both sides of the political fence. A senior aide to a House Republican leader summed up the feeling: "Corporate America isn't the friend to Republicans that most people assume. So I think there is a healthier sort of skepticism that is brought into those meetings" with business leaders. (Chief executives still have some sway; no critics wanted to be identified slamming them.)

Some of the Republicans' distancing from big business is a matter of political tactics — to alter their image as the party of wealth and corporate power. A writer for the conservative Weekly Standard said of the fiscal fight last month, "While big business cozies up to Obama once again, Republicans have an opportunity to enhance their reputation as the party of Main Street."

A news release emailed in late December from the office of Speaker John A. Boehner captured the changed dynamic. On a day when Obama met executives from the Business Roundtable, a group that for decades was close to Congressional Republicans, the subject line on the Boehner email, abbreviating "President of the United States," read: "GOP to Meet With Small Biz While POTUS Meets With Big CEOs."

Courtship of business has been central to the president's postelection legislative strategy, both to repair relations strained in his first term and to gain allies who might influence Republican lawmakers in the second. Yet Republicans on Capitol Hill profess bemusement, saying that administration officials misread their party.

"They trot out these big business executives and just assume, ‘Well, these guys are big business — if they just go tell Republicans what to do, they'll do it.' That's just a cartoon version of how things work," said a House Republican adviser.

But the White House was not alone late last year in believing that a group called Campaign to Fix the Debt — the biggest and best-financed mobilization of corporate clout in lawmakers' memory, with more than 150 chief executives and $46 million — could create pressure for a bipartisan grand bargain of tax increases and entitlement program reductions to stabilize the federal debt.

There was no such deal in December, and people in both parties agree that Fix the Debt has had no impact so far. Yet the coalition is back.

"I definitely think this is a marathon, not a race, so it's not going to all happen when we want it to happen," said Mark T. Bertolini, chief executive of Aetna and a leader in the coalition.

Privately, however, some Republicans in the group concede their advocacy has limits among the new breed of Republican lawmakers.

With each year, "you're getting even further away from the big-city, corporate domination of the Republican Party," said Merle Black, a scholar of Southern politics at Emory University. And if a Republican in a conservative district did back a deal with Obama, Black added, "It won't get you very far if you say, ‘Well, I talked to the corporate guys and they're all for this."'






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