In budget and debt fight, White House finds unlikely alliance in business community

Amid signs of movement, White House spokesman Jay Carney says he doesn't know "if and when the House is going to act" to end the government shutdown.

The White House has enlisted the business community to pressure GOP lawmakers to reopen the government and raise the debt ceiling, forging an unlikely alliance with traditionally Republican-leaning groups in response to growing fear that the country could default on its debt.

President Obama, Treasury Secretary Jack Lew and senior adviser Valerie Jarrett spoke to nearly 150 business executives on a conference call Friday with an update on their efforts to avoid a default, according to a White House summary of the call.

When the call ended, Jarrett entered the Roosevelt Room of the White House to meet with lobbyists for the U.S. Chamber of Commerce, the National Association of Manufacturers, the Financial Services Roundtable and other business groups representing aerospace and technology companies. During the meeting, Jarrett and Brian Deese, deputy director of the Office of Management and Budget, asked the business groups to encourage their member companies to communicate with lawmakers on the urgency of finding a negotiated solution, according to a person at the meeting who spoke on the condition of anonymity because the conversation was private.

Many firms have already begun such efforts. Alarmed by the standoff in Washington, companies such as Caterpillar are encouraging their employees to call and write lawmakers to reopen the government and raise the debt ceiling.

Trade groups such as the U.S. Chamber are also discussing an unprecedented step: supporting more moderate candidates in primaries. In the past, the groups have gone to enormous lengths to support mostly Republican campaigns — but only to beat Democrats, not other Republicans.

Until this week, many in the business community have been standing on the sidelines, trusting that the GOP, to which it has been allied for decades, would work out its internal squabbling. But with some companies already seeing a drag on their businesses from the shutdown, executives are getting involved far beyond the usual menu of interests such as taxes and regulations.

Eaton Corp., an energy management firm with 30,000 employees and $22 billion in annual sales, invited its workers Friday to contact members of Congress on the budget impasse and the need for bipartisan compromise and cooperation.

Caterpillar chief executive Doug Oberhelman wrote a letter to employees this week encouraging them to sign a petition asking Congress to raise the debt ceiling.

And the U.S. Chamber is doing research on key states where it can battle back against tea party candidates willing to use the country’s debt repayments as a bargaining chip.

“I do think we need to act. We need to combine and concentrate our efforts to succeed,” said Bruce Josten, the U.S. Chamber’s executive vice president for government affairs, noting the interest he and others have in exploring primary challenges of tea party candidates. “But the equation is complicated and requires very good information.”

Relations between the Obama administration and U.S. Chamber have been testy, with the trade group giving the vast majority of its contributions to Republican candidates in recent election cycles. But on the potential failure to raise the debt ceiling — which some House Republicans insist would be harmless — the White House and the U.S. Chamber are in solid agreement that the results would be catastrophic.

The business community is hardly monolithic. Companies and industries frequently face off against one another on pieces of legislation. But the specter of default has united various interest groups concerned about their inability to sway a certain set of Republicans on the issue of the shutdown and the debt ceiling.

Since the 1970s, when large businesses began getting involved in Washington, the playbook has been fairly standard: Stick to specific issues that affect your company. Pay dues to trade groups that can represent your interests with more aggressive tactics. Identify largely with the Republican Party.

Ultra-conservative lawmakers and groups are now rewriting the script. Forged in the aftermath of the bank bailouts, tea party Republicans such as Sen. Ted Cruz (Tex.) are often hostile or indifferent to business interests, a fact that trade groups and businesses are now fully grasping.

“Generally you could elect a Republican . . . and you could kind of trust where they would be on the issues,” said John Motley, a longtime lobbyist and former vice president of legislative affairs at the National Federation of Independent Business. “We vetted people on the business issues. We didn’t vet them on the debt ceiling.”

Dirk Van Dongen, head of the National Association of Wholesaler-Distributors, said the impasse has motivated many of the business owners in his organization to engage immediately with Congress members to discuss ways to end the impasse. He said he and others are considering ways to counter the impact of “far right groups” that threaten Republican members and their leaders in the House and Senate.

These groups, he said, “severely handicap leadership’s ability to be an intelligent firewall against Obama liberalism.”

Van Dongen is an avowed conservative who backs Republicans. But like other business leaders, he is upset about the brinksmanship strategy of tea party Republicans.

“Leadership and rank-and-file Republicans are scared to death of far-right groups who threaten to challenge them in primaries because they are not 100 percent pure,” he said.

Van Dongen said that although the long-term goals of tea party candidates may sometimes align with his own, their tactics could disrupt the domestic and global economies.

Business leaders are now casting doubt on the strategy employed by tea party candidates and their backers, including the Club for Growth, Freedom Works and Heritage Action.

At the Washington offices of the International Franchise Association, president Steve Caldeira said his members are angered by the impasse in Washington, which has already proved costly. They are reaching out to members of Congress, urging an end to the current crisis, and are contemplating new activity in primaries as a way to rid Congress of extremist members.

“We will now place a premium on supporting Republicans who have consistently spoken out against the perils of a shutdown and default,” he said. “ . . . The franchise industry will become even more focused on identifying candidates who are not going to Washington just to be obstructionist or isolationist but will go to Washington to legislate and govern in a bipartisan manner, which is what they were elected to do.”

Jia Lynn Yang is a staff writer at The Washington Post who covers policy and business. Before joining the Post, she worked at Fortune magazine.
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