WASHINGTON (AP) – For more than half a century, the voice emanating from the Beaux Arts-style monolithic building of the US Chamber of Commerce near the White House was predictable: it was the epitome of corporate America and, more specifically, a shared set of interests with the Republican Party.
However, the party’s link with corporate America is fraying.
Rifts have broken open over the GOP’s embrace of conspiracy theories and rejection of mainstream climate science, as well as the rejection of the 2020 election results. The most recent flashpoint was in Georgia, where a new Republican-backed law restricting the right to vote, was harshly criticized from Delta Air Lines and Coca Cola, which is headquartered in the state, and resulted in Major League Baseball pulling the 2021 All-Star Game out of Atlanta.
Republicans were outraged. Senate Minority Leader Mitch McConnell of Kentucky warned that their actions were “pretty stupid,” alienating “many Republican fans.” GOP strategists argued that they no longer needed corporate America money to win elections as they try to form a new brand name as a workers’ party.
That offers President Joe Biden and Congressional Democrats the chance to find an ally in an unlikely place when the party unites control of the federal government for the first time in a decade. Biden is pushing for an ambitious $ 2.3 trillion infrastructure package that includes corporate tax increases – which the White House for CEOs characterizes as upfront investments that will ultimately make companies more profitable.
“It’s important to make the country more competitive,” said Cedric Richmond, the White House’s director of public engagement. “We think the plan is so important to the country that we are advocating for it and all businesses praise it.”
Commerce Secretary Gina Raimondo estimates she has spoken to more than 50 business leaders about the plan, including a series of phone calls over the Easter weekend. She encourages companies to focus on the whole package rather than the tax increases.
“You can’t look at part of it and say you’re walking away through that number,” she said. ‘They say,’ That’s fair. Let me think about it. ‘ That’s how they run their business. “
Whether the company’s split with the GOP grows further could help answer questions about the country’s political direction and the extent to which business can continue to influence Washington.
“No one in the corporate world wants hostile communities, angry finger points, and turbulent shareholder files,” said Jeffrey A. Sonnenfeld, a senior associate dean at the Yale School of Management. “It makes your job so much more difficult to make each constituency go to war within itself, which has become the hallmark of the GOP.”
American marriage to the Republicans has long been a marriage of convenience, united by a belief in low taxes and the need to repeal regulations. But the relationship, already tense during Donald Trump’s presidency, has come under increasing pressure as companies take cultural stances.
That Republicans and companies are reporting to increasingly clear-cut constituencies helps to explain the tension.
A solid majority of Republican voters are white (86%) and over 50 (62%), according to APVoteCast, a 2020 national poll of the electorate. Still, figures from the Bureau of Labor Statistics show that workers are more racially diverse and younger are then the Republican base.
James Bailey, a management professor at George Washington University, published an analysis last year suggesting that people who identified as Democrats cared more about a company’s political activities than Republicans. Of business people, he said that the uproar over Georgia’s voting law “is a great opportunity for them to get on board with the young socially active consumer at low cost.”
Equally important, democratic countries have become the main drivers of growth. The counties that supported Biden last year account for 71% of all economic activity in the US, according to the Brookings Institution.
Democrats say business is comfortable working with them to tackle long-standing issues like infrastructure after a decade of congressional jam, even though businesses don’t like the ability to pay the bill.
“Responsible business leaders want economic growth and predictable, competent policies – that’s what Democrats provide.” said Rep. Sean Patrick Maloney of New York, who leads the House Democrats’ campaign weapon for the 2022 midterm elections.
Many Republicans have been annoyed by the corporate efforts to persuade consumers through liberal social politics.
“They will never meet the demands of the left,” said Steven Law, a former House attorney who now manages the Senate Leadership Fund, a large-spending outside group aligned with McConnell. In the meantime, “they run the risk of alienating their natural allies in the Republican Party.”
Still, the Republicans were a major driver of the divide, seeking to capitalize on the cultural clash to become the party base in the next election. Early indicators suggest that business could face backlash.
The Republican-controlled House of Georgia voted to strip Delta of a tax break of tens of millions of dollars a year for its criticism of the new restrictive law, which voting rights groups have denounced as an attack on democracy. The intended sentence was disputed after the GOP senate failed to accept it before the term was adjourned.
Campaign finance revelations suggest that corporate America’s money isn’t buying as much influence as it once did.
About a decade ago, donations from company-sponsored political action committees were a major part of the fundraising pie. But it is stagnating as a source of campaign money, as court rulings allowed wealthy GOP activists to pour money into the political system.
Just 10 GOP mega donors account for half of the donations to major super-political action committees controlled by Republican congressional leaders since 2012, who have collectively deposited $ 541 million into the committees, according to The Associated Press analysis of donors raising more than $ 1,000 gifts. The mega donors also contributed twice as much as conventional PACs and other groups representing a wide variety of business interests.
The political expenditure of the House has also dropped suddenly. After spending $ 29 million in 2016 primarily in support of Republicans and attacking Democrats, the group’s contributions dropped to $ 10.9 million in 2018, according to data from the non-partisan Center for Responsive Politics. In 2020 the group supported 23 Democrats, which Republicans saw as treason.
That diminished the group’s once untouchable status among the leaders of the GOP congress.
“Absolutely no love is lost for companies, especially when they consistently weigh up on things they don’t understand,” said Josh Holmes, a political advisor to McConnell. “There is no sympathy.”
There is still agreement between Republicans and the business community on the value of tax cuts. The Chamber and the Business Roundtable are against an increase in the corporate rate to 28% from the level of 21% set in 2017, as well as an increased global minimum tax. Still, both groups want government spending on infrastructure.
Neil Bradley, the Chamber’s chief policy officer, said the wider business community is not fully aligned with either side. But the hyper-partisan nature of current politics is creating pressure to take one side.
“It really makes people want to sort everything into a red camp or a blue camp,” he said. “Companies are not biased. They are not Republicans or Democrats. They have to operate and function in divided governments, operate in states that are solid blue and solid red. “
Republicans, however, warn that the business community faces significant risks weighing on hot-button disputes.
“They must proceed with caution because they risk being in the middle of a culture war that will not bring them friends and many enemies,” said McConnell’s ally Law.