Correction: An earlier version of this column incorrectly said that the Club for Growth is run by Grover Norquist. It is run by former congressman Chris Chocola (R-Ind.) . Norquist’s group is Americans for Tax Reform. This version has been updated.
Holy Solyndra, Batman. It turns out businessmen are even worse at making political investments than politicians are in making business investments.
That’s right. After spending hundreds of millions of their own and shareholder dollars to knock off a tax-and-regulate administration and deliver a permanent Republican majority in Congress, business leaders now face the prospect of at least four years dealing with a president and lawmakers who won’t soon forget the nasty, misleading ads run against them. At the same time, the business community has succeeded in uniting the citizenry around the idea that something should be done to prevent monied interests from spending unlimited sums of secret cash to buy elections.
The poster boy for this stunning miscalculation and misallocation of shareholder funds is Thomas Donohue, the longtime president of the U.S. Chamber of Commerce who has turned the once-venerable business organization into a political money-laundering operation on behalf of the Republican Party.
As the election cycle began, Donohue vowed to spend $100 million on a positive national advertising campaign to educate the public on the benefits of free enterprise. If you go to the Chamber’s Web site, however, what you’ll find is a reel of unrelentingly negative and partisan TV attack ads aimed at Tim Kaine of Virginia, Sherrod Brown of Ohio, Bill Nelson of Florida, Tammy Baldwin of Wisconsin, Jon Tester of Montana, Angus King of Maine, Chris Murphy of Connecticut and Heidi Heitkamp of North Dakota, all of whom will be part of the newly enlarged and energized Democratic majority in the Senate. Data compiled by the Center for Responsive Politics show that the Chamber spent at least $32 million on 15 Senate races, 13 of which went the other way.
Never one to apologize, Donohue was out with a news release the day after the election declaring that the Chamber’s “principal goal” all along had been “to defend the pro-business gains we made in Congress in 2010 and ensure balance in the federal government when it comes to policies affecting business. That goal was achieved.” Thank Heaven for that, because it would otherwise raise questions about why the Chamber’s dues-paying job creators are paying Donohue nearly $5 million a year.
It is fortunate for the Republic that the Chamber no longer represents American business, and that there are genuine business leaders prepared to play a more constructive role in getting Washington to yes on a grand budget bargain before the country heads over a fiscal cliff. A group of 80 chief executives of the some of the country’s largest corporations have committed personal time and corporate money — $40 million so far — to provide political cover to politicians willing to move toward the “radical center,” as Honeywell’s Dave Cote put it, by backing a budget plan like that proposed by the bipartisan Simpson-Bowles commission.
The momentum generated by “Fix the Debt” already has triggered some quiet but unmistakable pushback from the Chamber, the National Federation of Independent Businesses, the National Association of Manufacturers (NAM) and Chris Chocola’s Club for Growth, which despite the election results continue to wage political jihad against anything that might involve higher taxes on the wealthy, businesses or investors.
Up to now, the corporate executives behind “Fix the Debt” have been reluctant to take on their own business lobby, at least in public, downplaying these differences. They also have not made it clear to business organizations such as the Chamber or NAM, to which they pay significant dues, that their continued participation is contingent on getting behind a grand bargain that balances spending cuts with tax increases. Without such a strong and unified push from business, the Republican right will remain intransigent and no deal will be struck.
Part of the challenge confronting the corporate chief executives is that they are being subtly undercut here in Washington by their own lobbyists, whose primary focus remains on preserving existing tax breaks, winning new subsidies and reducing the impact of new laws and regulations. Their personal success depends not on whether the nation’s long-term fiscal problem is fixed but whether they are successful in protecting the narrow short-term interests of their companies. And that is not easily accomplished by jeopardizing long-standing relationships with allies in Washington or Republicans on Capitol Hill.
I don’t mean to suggest that the only thing standing in the way of a budget deal is the intransigence of Republicans and their enablers in the business community. Right now, any bipartisan compromise will involve sizable cuts to Social Security, Medicare or Medicaid that would be unacceptable to Democratic leaders of the House and Senate, along with sizable contingents in their caucuses. Only President Obama has the incentive, the instinct and the freedom to negotiate such entitlement cuts and only he has the political standing to get a sufficient number of Democrats to follow.
How might he negotiate such a deal? Surely not by inviting leaders of both houses and both parties for a meeting at the White House, as is scheduled for next week. Not only will nothing be accomplished, but also to the degree that it results in a replay of the usual posturing, such a meeting will be detrimental.
The negotiations that need to happen are between the president and Republicans leaders in Congress. That means Speaker John Boehner and Senate Republican leader Mitch McConnell, both of whom are practical pols who enjoy deep respect in their caucuses. It also means Paul Ryan, who knows budget issues cold, is now a national figure and can lend legitimacy to any deal in the eyes of die-hard conservatives. For his part, the president should bring along his chief of staff and top budget expert, Jack Lew, along with Bruce Reed, the vice president’s chief of staff who headed up the Simpson-Bowles commission staff.
This small crew should meet privately at different locations at least three times a week between now and the end of the year. The early emphasis should be on building mutual trust and personal relationships, the missing ingredients in the failed negotiations last summer between the president and Boehner. They should agree that nothing is decided until everything is decided, and to say nothing in public until a deal has been struck, even as they consult privately with key allies. Their aim should be to lay a budget resolution before the new Congress when it convenes Jan. 2, with final votes prior to the inauguration.
The process won’t be pretty, the final votes will be close. If it succeeds — and I think it will — one factor will be the strong support from a business community that finally comes to understand that what’s good for America is also good for business — and not the other way around.