The havoc in the Republican House caucus has finally ended, with the election of the Ayn Rand-reading, Medicare-privatizing “moderate” Paul Ryan as the new Speaker of the House. But a closer look at the recent leadership shakeup reveals the degree to which Congress has become a ruling-class plaything.
The abrupt resignation of Speaker John Boehner was met with shock but not much sentiment. He was the face of the 2013 government shutdown, demanding aggressive spending cuts, and the congressional Republicans’ aggressive efforts to undo Obamacare. But while the possible breakup of the Republicans’ “Southern strategy” has been much discussed, less attention has gone to the crucial and shifting role in these developments of corporate America, to which the GOP owes its current majorities.
Tea Party Poopers
The Tea Party was founded by Koch-brother money and Fox News free publicity. The conservative Wall Street Journal reports, “Business groups spent millions of dollars on the  mid-term elections to help secure a GOP majority in Congress,” while the liberal Washington Post’s rendering was that “business groups have helped Boehner and his counterparts in the Senate raise millions of dollars to put Republicans in office, including the 2010 election of tea party lawmakers who have now roiled the GOP.”
Since its origin, the Tea Party’s backers hoped to use an aggressive, talk-radio fed constituency and rowdy House members as momentum to overturn the remains of the New Deal and Great Society programs, like progressive taxation on the rich, Social Security, Medicare and industrial regulation.
The Freedom Caucus’ “anti-elitism” is running up against business priorities in a way corporate megadonors hadn’t expected.
But it’s not easy being a political puppeteer; business thought it could control the Tea Party, but it turned out it can’t. The Journal observes that “the rebellious wing” of the party has refused to carry out even basic legislative functions, which meant that not only were the New Deal programs and tax levels under the ax, but also “the top legislative priorities of large American companies were thrown into deeper disarray.” This was not the plan. Increasingly rabid GOP primary elections, fed by paranoid right-wing media, usually happen prior to the giant corporate funding that seals the deal in the general elections. This resulted in a growing “Freedom Caucus” – the current Tea Party-derived wing of GOP representatives. While this wing is ultraconservative, its “anti-elitism” is running up against business priorities in a way corporate megadonors hadn’t expected.
Beside a willingness to repeatedly flirt with government shutdowns and even debt defaults – which horrify business and most especially Wall Street – the caucus’ free market ideology has led to business defeats like defunding the Export-Import Bank. The Bank extends credit to foreign purchasers of US-made products and services, serving to boost exports and corporate sales. Corporate America doesn’t take such misbehavior lying down, no more from Republicans it paid to elect than from Democrats it also paid to elect. In a political system where lobbyists openly refer to “investing in” candidates and having “buyer’s remorse” when they sometimes disobey, resources will be put into action.
And so it was that in Alabama in October 2013, the US Chamber of Commerce and other business firms started spending to defeat Tea Party candidates, after having spent so much to create and install them. In a special primary runoff pitting a Chamber-backed business candidate against a shutdown-supporting incumbent, the Chamber’s “post-government-shutdown effort to derail Tea Party candidates” kicked into high gear. Giant corporations like Caterpillar, Pfizer, BASF and AT&T, along with large industry groups like the National Retail Federation (which includes Walmart), all essentially conceded they made a mistake with the 2010 crop of candidates and pushed back toward more traditional pro-corporate conservatism.
Corporate America succeeded in some House races and failed in others, as business funding competed with the extreme “libertarian ideology” a Chamber sympathizer complained of, along with the fact that “extreme conservatives tend to be more reliable voters,” as The New York Times suggested. This mixed record isn’t expected to deter the Chamber and other business groups. As Bloomberg Businessweek reported, “The chamber’s goal is to send a message to House Republicans that those who oppose its agenda will face political consequences.”
All this meant that the 2014 “midterm elections were billed as a resurrection of sorts for the party establishment after the Chamber of Commerce and other groups, aligned with the business wing of the party, repelled conservative challenges,” as The Wall Street Journal put it. The Chamber of Commerce spent over $35 million, a gigantic amount for a congressional election year.
The Tortured Chamber
Through this whole period of major swings in the political investments of the business world, Speaker Boehner “was seen by many in the business community as a bulwark against tea-party excesses,” as the business press reports. So the speaker’s departure, lamented by hugely powerful business groups like the Chamber of Commerce and the National Association of Manufacturers, throws a wrench into elite efforts to control the representative bodies of the country. The business world observes that in the “very near term,” Boehner’s resignation is actually helpful, since with his announced departure, he no longer has to fear the Freedom Caucus calling a vote on his leadership and stripping him of his speaker’s gavel. With his departure from the House imminent, Boehner has said, “I don’t want to leave my successor a dirty barn,” widely interpreted to mean passing legislation derided by the Tea Party purists.
For example, as the clock ran down before Ryan’s election the House voted to reauthorize the Export-Import Bank with support by both pro-business, moderate Republicans and House Democrats – exactly the kind of sensible bipartisanship on which the Tea Party heaps scorn. Expectations are for the liberated Boehner to also support a “clean” budget resolution, one without conditions demanded by the Tea Party, like cuts to Obamacare subsidies or a ban on funding Planned Parenthood, the women’s reproductive health-care provider. An increase in the borrowing limit will probably also take place before the conclusion of Boehner’s tenure.
The speaker’s departure throws a wrench into elite efforts to control the representative bodies of the country.
Even though Boehner’s replacement is the extreme anti-New Deal but pro-stability Rep. Paul Ryan, business media like the Journal are watching apprehensively the growing list of giant demands by the Freedom Caucus: “Conservatives haven’t settled on a single wish list. Many want incoming leadership to give legislation more time for a public airing, overhaul how committee chairpeople are selected, allow more floor votes on generally conservative amendments and generally create a more ‘bottom-up’ environment within the House GOP.” It’s amazing to hear demands for “bottom-up” governance from a group whose fortunes have come and gone with the Fortune 500’s whim. The caucus also wants “policy promises” from the future speaker, including guarantees not to raise spending above 2011 targets or the federal borrowing limit. And most interestingly from the point of view of business control, speaker candidate Kevin McCarthy, before his withdrawal, “pledged to defend any GOP incumbent against possible campaign attacks from outside groups, including the U.S. Chamber of Commerce.”
Government shutdowns are becoming part of our Tea Party era of governance, and arise each time a new funding bill or a debt ceiling increase are needed. Shutdowns are treated as theatre by the extreme GOP, with buffoons like Sen. Ted Cruz playing to TV audiences as standing on anti-government principle. Rep. Mick Mulvaney (R-South Carolina), a prominent Freedom Caucus member, had an exchange with McCarthy in 2013, where Mulvaney was cautioned that, “We don’t want to play chicken on this issue.” Mulvaney’s alleged reply was, “Put this issue aside, I’ll play chicken with you every time. You think I am crazy, and I know you are not.” This caricature of political brinkmanship plays well on right-wing media, where it comes off as rebellion against a power system, even if it’s the same one that bought their elections in the first place.
But shutdowns are enormously disruptive and expensive, and threats to allow a default on public debt are far worse. Fox News viewers are often unaware that US government bonds, which the Treasury Department issues to borrow money, are the cornerstone of the national – and indeed global – financial systems, due to their historically negligible risk of default. But in the 2013 shutdown, the rating agency Fitch put US bonds on “rating watch negative,” meaning they might be downgraded from their impeccable AAA status. Another main agency, Standard & Poor’s, actually downgraded US debt to AA after the 2011 crisis. These dramatic steps sent waves through the system, as the millions of transactions based on the bonds and related instruments abruptly seemed less safe. The broader effect is to inject new uncertainty into an already jittery global marketplace.
With Boehner washing his hands of the House, big business is in a sinking ship of its own making.
For this reason, The New York Times describes “fear” on Wall Street of another disruptive shutdown, while The Wall Street Journal reports that the 2013 shutdown “cut between two-tenths and six-tenths of a percentage point from real GDP in that year’s fourth quarter, according to government and private estimates.” But the right-wing no-brainers in the House are spoiling for another fight, both over the traditional demands to hack away at the New Deal, but also over Planned Parenthood, even though a Quinnipiac University poll in September 2015 found “American voters oppose 69-23 percent, including 56-36 percent among Republicans, shutting down the federal government in the dispute over funding Planned Parenthood.” But 3:1 opposition doesn’t slow down these characters, whose main constituency is the audience of the feverish reactionary echo chamber of right-wing radio.
The GOP’s relatively moderate membership had to badger Ways and Means Committee Chair and 2012 Republican vice presidential nominee Paul Ryan to take over, allowing Boehner to escape, and hopefully bridge the gap between the right and the far-right in the caucus. Ryan has a 93 percent legislation rating from the US Chamber of Commerce, which heartily approved his 2015 budget proposal, which would make over a trillion dollars in cuts from welfare, food stamps and other safety net programs, cut other domestic programs by a half-trillion dollars, repeal the Affordable Care Act and create a special “emergency” war fund to shield the Pentagon from spending caps. But Ryan’s history of advocating immigration reform still put him under a cloud with the Freedom Caucus, which couldn’t bring 80 percent of its membership to agree to vote for him.
With Boehner washing his hands of the House, big business is in a sinking ship of its own making. And Main Street USA is along for the ride!