For one, they lost a major defender of their favored policies--from the beneficial tax treatment of private equity income to immigration reforms favored by the country's biggest tech companies. But even worse for their prospects, Cantor lost to a challenger who specifically attacked him for his close ties to big business -- going so far as to single out the BRT and the Chamber.
"The central theme of Brat’s campaign is that Cantor is beholden to business — specifically the U.S. Chamber of Commerce and the Business Roundtable," wrote Politico in April.
“If you’re in big business, Eric’s been very good to you, and he gets a lot of donations because of that, right?” Brat said at a local meeting of Republicans in Virginia, according to Politico. “Very powerful. Very good at fundraising because he favors big business. But when you’re favoring artificially big business, someone’s paying the tab for that. Someone’s paying the price for that, and guess who that is? You.”
While everyone is focused on Brat's critique of Cantor's immigration stance, that attack came in the broader context of the increasingly potent "crony capitalism" theme. Brat went after Cantor specifically for his support of strengthening the H1B visa program, a policy especially favored by tech companies such as Facebook since it allows them to hire more engineers from overseas. Critics have said that the program allows firms to seek cheaper labor to maximize profits and puts foreign workers ahead of Americans.
Here's how Brat attacked Cantor for it on Twitter: with a photo of him standing right next to Mark Zuckerberg.
It's true that Cantor enjoyed a strong relationship with business, and it went far beyond tech to Wall Street especially. The industry that gave him the most campaign contributions was the securities and investment sector. Individuals from the private equity firm Blackstone were his biggest financial supporters. Cantor went to bat for the industry repeatedly over politically unpopular issues, including the taxation of income at private equity firms at the lower capital gains rate.
That's no surprise: for decades, the GOP and big business have worked closely together to build a political alliance that until recently appeared airtight. But now with Tea Party activist groups charging the traditional wing of the GOP with "crony capitalism"--and Cantor's loss--the balance of power is creeping away from the pro-business faction of the Republican Party.
The business lobbying groups can sense this, and they've made no secret of their intense dislike of the Tea Party wing, as Tom Hamburger and I reported last year. Dirk Van Dongen, the longtime chief lobbyist for the National Association of Wholesaler-Distributors, called Tea Party lawmakers and their activist supporters "the Taliban minority."
That enmity can only now be escalating, with people like Brat going directly after the lobbying crowd. “Cantor is following the agenda of the Business Roundtable and the Chamber of Commerce — pursuing policies that are good for big business, but come at the exclusion of the American people,” said Brat earlier this year according to the conservative website Watchdog.org.
His win signals that it's not just the policies supported by the BRT and the Chamber that are under threat. The business lobby groups and big firms themselves have increasingly become political targets--along with any lawmakers who are seen as working closely with them.
Update: Wall Street seems already to have reacted to Cantor's loss by sending stocks of Boeing down more than two percent. The company relies heavily on support from the Export-Import Bank, a government credit agency that helps finance sales to overseas buyers of U.S. goods, including Boeing's planes. Cantor was a supporter of the Export-Import Bank, which conservative groups including the Club for Growth want to abolish since they view it as more "crony capitalism." Cantor's loss paves the way for more Tea Party lawmakers to take shots at the agency; a fight over the bank is already shaping up for this fall, when its authorization expires.