Crony capitalism — the highly profitable alliance between Big Business, K Street, and the federal government — is a frequent topic of scorn for Republican critics of President Obama. But while crony capitalism has certainly flourished under the Obama administration, the GOP hasn’t exactly gone out of its way to combat the trend.
Many have argued that taking on crony capitalism, and perhaps adopting a more populist tone that emphasizes the needs of working-class Americans, should be an important aspect of the GOP’s rebranded agenda. By advancing a message and a policy agenda that combat the stereotype of Republicans as beholden to Big Business, the party could go a long way toward regaining some lost trust with the American people.
But the party’s actions haven’t matched this desire to change tone. Entrenched special interests still hold political sway. The status quo, being the status quo, is hard to crack. Additionally, as Matt Continetti argued for The Weekly Standard in the wake of the 2012 election, Republican efforts to strike a more populist tone and reach out to target demographics of minorities, single women, and millennials run the risk of alienating the party’s traditional base. Old habits have been difficult to break.
Consider, for example, the recent bipartisan budget agreement to roll back sequester spending cuts in exchange for promised savings in 2023–24. Like most congressional products, the deal was supported by teams of lobbyists and opposed by conservative activist groups. Almost as notable as the deal itself were House speaker John Boehner’s public outbursts at these groups, which had business lobbyists “pumping their fists,” according to The Hill.
In many ways, the dust-up was merely the latest in a long line of intra-party skirmishes, the most recent outbreak of which began in 2010, when Republicans regained control of the House. But as the Washington Examiner’s Timothy Carney, a proponent of “libertarian populism,” argued, the backlash against tea-party groups may be explained by most lawmakers’ disdain for “being lobbied in public, in earshot of their constituents,” as opposed to the privacy of the proverbial back room.
Conservative groups viewed K Street’s rejoicing at Boehner’s putdown as a sign they were right to oppose the budget deal. Even critics of the groups’ strategy during the shutdown saw some truth in Senator Ted Cruz’s assessment that the deal “exemplifies what is wrong with Washington” — where celebration over the bipartisan accomplishment seemed to preempt any serious discussion about its substance. In typical fashion, lawmakers were given very little time to review the agreement and no chance to offer amendments.
The budget deal may clear a path for the House to move on immigration reform, an issue some conservatives have argued is a perfect opportunity for the GOP to buck Big Business and K Street, which overwhelmingly support the Gang of Eight legislation that passed the Senate earlier this year. The Republican National Committee’s own post-2012 autopsy report suggested that the GOP embrace “comprehensive immigration reform” in an effort to appeal to Hispanic voters.
Senator Jeff Sessions (R., Ala.) and others have argued that opposing this effort would cast Republicans in the role of standing up for working Americans, who are likely to be the most harmed by the massive influx of low-skilled immigrants contemplated in the Gang of Eight proposal. The Congressional Budget Office estimates that the bill would have a negative impact on wages over the next decade. Big Business is eager to get its hands on cheap immigrant labor, never mind the still-high unemployment rate among native workers.
The fact that former governor Haley Barbour (R., Miss.) has been one of the most outspoken advocates of comprehensive immigration reform should raise suspicions about any professed opponent of crony capitalism who also likes the bill. Few can match Barbour’s zeal for the transactional (and decidedly anti-free-market) nexus of business and politics. His close friend and business partner Governor-elect Terry McAuliffe (D., Va.) is one of them; he also backs comprehensive reform. Opponents such as Sessions have cried foul.
“These business people do not get to set the [immigration] policy for the United States of America. They do not represent the United States of America, they represent their special interests,” Sessions said ahead of a San Francisco meeting between President Obama and CEOs in the technology industry to discuss the push for immigration reform. Sessions may be one of the few lawmakers aggressively making this case, but his effort to erode political support for comprehensive reform has been remarkably successful nonetheless, despite almost no support from prominent conservative interest groups. (Heritage Action is the only one actively lobbying against comprehensive reform.)
As John Fonte of the Hudson Institute recently argued at National Review Online: “Immigration politics is at the heart of the divide between conservative populist groups, on one side, and corporate elites within the GOP on the other,” and it presents a golden opportunity to “seize the moral high ground” from Democrats, whose efforts to cast Republicans as the party of corporate interests have not been unsuccessful. The prospect of the Democrats’ nominating Hillary Clinton, who embodies the corporate-political nexus as much as anyone, could provide even greater impetus for the GOP to take this route.
Republicans concerned about crony capitalism and corporate influence will have a chance to work against them in earnest early next year, when Senator Mike Lee (R., Utah) plans to unveil a series of reform proposals designed to level the playing field between big corporations and small businesses by reforming the tax code, the federal regulatory system, and intellectual-property laws. Lee will also take aim at “corporate welfare” — government subsidies, whether direct or indirect, that typically accrue to powerful business interests that can afford to pay armies of lawyers and lobbyists to help secure them.
Earlier this year, Lee offered an outline of what a conservative reform agenda might look like, the first step being “to end this kind of preferential policymaking. Beyond simply being the right thing to do, it is a pre-requisite for earning the moral authority and political credibility to do anything else.” In September, Lee put forward an ambitious tax-reform proposal, targeted at the middle class, that was widely praised on the right.
The senator is uniquely positioned to advance a conservative reform agenda, given his tea-party credentials and, perhaps most significant, his lack of interest in running for higher office. But it remains to be seen how many allies Lee will be able to recruit as he aims to build a policy agenda for Republicans to run on, and hopefully enact, in the coming years.
“Republicans need to start addressing the insecurities of the poor and middle-class, and convince them that conservatism holds the solutions,” says a senior GOP aide. “We can win specific battles like Obamacare when the other side messes up, but that doesn’t mean we’ve won the trust of the American people to run the government. Even if they like what we’re saying, they’ll never trust us if our policies don’t match the rhetoric.”
This is especially important for a Republican party whose ultimate goal should be not only to win elections, but to enact conservative policies, says longtime GOP strategist Pat Shortridge. “It’s wrong to think if we get a Republican president, that solves all our problems,” he says. “A lot of people believe that we want to win elections, but aren’t sure that we want to accomplish things that will help them.”
— Andrew Stiles is a political reporter for National Review Online.