How a MAGA Split With Big Business Chamber of Commerce Could Break the Economy and Debt Limit

When Washington was on the brink of careening off the so-called fiscal cliff in 2011, recalcitrant congressional Republicans were facing pressure from a crucial ally.

The U.S. Chamber of Commerce, the country’s most powerful business lobby, had a clear message to GOP lawmakers who wanted to take the debt limit hostage in order to force spending cuts: quit messing around.

They urged Republicans to extend the federal government’s borrowing authority—and in doing so helped to soothe the U.S. and global economy.

More than a decade ago, Republicans were skeptical of that message—but they were friendly with the messenger. Now, with another debt limit crisis looming, Republicans are increasingly hostile to both.

After decades of having every GOP decisionmaker on speed-dial, “the Chamber”—as it’s simply known in Washington—now finds its former relationships with the party frayed.

Some Republicans never quite forgave the Chamber’s decision to back a slate of Democratic candidates in 2020, while the party’s more socially conservative and economically populist drift has made the business lobby a useful target for politicians seeking to decry “woke capital” and economic globalization.

Last year, Speaker Kevin McCarthy (R-CA), never before known as an enemy of big business, publicly called for the ouster of the Chamber’s CEO. His deputy, Majority Leader Steve Scalise (R-LA), has said he won’t even take a meeting with the group.

With the GOP again seeking deep spending cuts in exchange for voting to avert a catastrophic default on the debt later this year, the Chamber again plans to play a key role advocating on behalf of corporate America. It’s warning policymakers to avoid getting near a default at all costs—while at the same time castigating President Joe Biden for saying he won’t negotiate with Republicans on the issue. And they’re also expressing openness to using the debt limit mechanism to force the spending cuts that Republicans are demanding.

Still, a survey of some key Republican lawmakers found that only a few are eager to hear out the case of their formerly close ally.

When asked by The Daily Beast if the Chamber has influence with the GOP on the debt limit, Rep. Kevin Hern (R-OK)—chairman of the House’s influential Republican Study Committee—had a flat answer: “No.”

“I know business people have to make the decision they have to make—I don’t represent those, I represent American people, constituents, 800,000,” said Hern. “I know what they’re asking me: why can’t you all sit down and have an adult conversation about how we bend our spending in America?”

Asked the same question, Sen. John Barrasso (R-WY), the third-ranking Senate Republican, had a similar answer. “Probably not,” he said. “We’re going to do what we’re going to do as a Republican conference regardless of what the Chamber thinks.”

There are, of course, some Republicans who still tout their Chamber credentials. Rep. Don Bacon (R-NE), a leader of the GOP’s more moderate wing, proudly noted that he was the group’s highest-rated member of Congress the last two years.

Bacon told The Daily Beast that the Chamber remains influential, but he added that he didn’t know “if that impacts everybody.”

“I like listening to them,” he said. “I think they’ve been a good advocate.”

The strained ties between Republicans and the Chamber raise the prospect that the congressional GOP may be far more immune than it was a decade ago to any tempering influence from the national business community, which is desperate to avoid an economy-destroying event.

More than ever, party leaders in the House are responsive to the views and demands of a hard-right wing that abhors compromise. With a razor-thin majority in that chamber, only a few lawmakers could veto any debt limit solution, just as they paralyzed McCarthy’s bid for the speakership. And some of those who led that revolt feel as stridently about this issue: Rep. Andy Biggs (R-AZ) has explicitly said the government cannot lift the debt ceiling.

In an interview with The Daily Beast, Neil Bradley—the Chamber’s executive vice president and a former top aide to McCarthy—stressed they share a belief with GOP leaders and members that avoiding a default is a unifying goal. “Default can never be an option,” he said. “That’s similar to what Leader McConnell and Speaker McCarthy are saying.”

While Bradley allowed that “in general, relationships are varied” between the Chamber and GOP lawmakers, he argued there is not anyone who “refuses to believe the facts you’re presenting about the impact on the economy” because they “dislike some position you took on some other issue.”

Asked whether the Chamber disagreed with the Republican strategy of leveraging the debt limit to demand spending cuts, Bradley validated the maneuver, saying past debt limit increases have included “really important” measures to address the deficit.

In Washington lobbying circles, there’s not much heartburn over what the GOP’s anti-Chamber moment could mean for its posture on the debt limit.

“This GOP majority has a genuine populist streak that informs their pugilistic pose on the debt limit,” said Liam Donovan, a Republican lobbyist. “But even as they’re less receptive to the corporate community than ever, the bulk of the conference understands the grave economic consequences of a default scenario.”

Donovan argued that while the Chamber might be in the “political penalty box,” lawmakers will be moved by business owners in their districts, many of whom are involved in local chambers of commerce with links to the national organization.

“When it gets to be crunch time, you can bet Main Street will pick up the slack,” he said.

Some denizens of K Street also don’t exactly buy the tough talk from McCarthy and his leadership team when it comes to the Chamber.

“As much as Kevin McCarthy is pretending to be someone, at his core, he is a business-friendly Republican from California,” said one lobbyist. “The Chamber has lost some of its juice, but there’s no way these guys turn down a phone call from the head of the Chamber, or its board members.”

Doug Heye, a former top aide to former GOP Majority Leader Eric Cantor, also suggested that lawmakers willing to totally discount the Chamber’s arguments aren’t going to be part of any solution on the debt limit.

“The Chamber and other business groups are warning Congress not to jump off the cliff, because there are no wings and doing so could tank the economy,” Heye said. “Are members going to disregard that simply because they don’t like the source of the warnings? I suppose it’s possible, but any members doing so aren’t exactly at the forefront of rationality.”

What makes the rift between the Republican Party and the Chamber so potent, however, is that it encompasses more than issue-based disagreements.

While the leading business lobby is a nonpartisan organization, the GOP’s longtime alliance with big business gave it a most-favored status enjoyed by few other interest groups. Some would quip that the Chamber’s longtime former CEO, Tom Donohue, was the “101st Senator.”

But during the era of Donald Trump, Republicans developed pronounced differences with the Chamber on immigration and trade policy, and warred over corporate policies on the environment and social issues. Taken together, they amount to a divergence of values on the topics that most animate conservative voters.

The GOP’s increased reliance on small-dollar grassroots campaign donations has also diminished the influence of groups like the Chamber, which long was the party’s most essential big-money electoral player.

During the 2011 standoff, Donohue joked “we’ll get rid of you” to the tea partiers holding the debt limit hostage—and had the Beltway wondering how much he was actually joking. Today, those same lawmakers might not spend much time wondering at all.

The right-wing populist Sen. Josh Hawley (R-MO), who did not hesitate to say he is not the Chamber’s “favorite senator,” believes the group has left American business and the working class behind.

“They’re far less influential among Republicans, my observation is, than they were in years past,” Hawley told The Daily Beast. “I haven’t been here very long, but I don’t hear a lot of Republicans in both chambers saying, ‘Oh, the Chamber said XYZ.’”

While there have been more recent debt ceiling standoffs, the upcoming battle mirrors the explosive situation from 2011, when Democrats controlled the White House and Senate while a new lot of Republicans had just handed the GOP control of the House.

At the time, the Chamber had a friendly audience for its case to handle the debt limit responsibly. Many GOP lawmakers weighing their debt ceiling votes had just been elected in a red wave election in which the business lobbying group spent some $75 million, largely to benefit Republicans.

Still, the Chamber struggled to win over the same Republicans they’d boosted. Three months after its policy head urged Congress to raise the debt limit “as expeditiously as possible,” congressional Republicans finally got a deal with President Obama, which paired a debt limit increase with the decade-long set of spending cuts known as “sequestration.”

In the process, they’d spooked financial markets and prompted the ratings agency Standard & Poor to downgrade the creditworthiness of the U.S. federal government—not the outcome the Chamber and business leaders had wanted. Such an outcome seems possible again, with months to go until the true fiscal cliff arrives.

Bradley, the Chamber’s executive vice president, worked for McCarthy at the time. To this day, he has a copy of the Budget Control Act—the legislation that codified the sequester and ended the 2011 standoff—on his wall.

“There wasn’t a situation,” Bradley said, “in which I was talking to the U.S. Chamber every day about how we got the debt limit done.”

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