The historically close relationship between business and the Republican Party is not what it was.
The historically close relationship between business and the Republican Party is not what it was.
I t was 1993, and Bill Clinton’s health-care plan was the issue of the day. The Democratic governor of Arkansas had just won the White House for his party for the first time in twelve years, with health-care reform as a centerpiece of his campaign. Universal coverage was the top item on the Clinton administration’s ambitious first-term legislative agenda, and opinion polls showed that two-thirds of Americans supported the initiative. By the time the 1,368-page Health Care Security Act was introduced to a Democrat-controlled Congress in November, many commentators were already calling it a shoo-in.
In the midst of all this, the oldest and largest trade association in the United States was hedging its bets. In March 1993, the Chamber of Commerce surprised many of its allies by coming out in favor of Clinton’s plan for universal coverage with an employer mandate, reversing its earlier opposition to both proposals. That signaled more good news for the Clinton plan — and bad news for its conservative opponents. “Advocates of change believe that this [would be] a fundamental part of the political equation for passing reform this year: Big business would not be a hurdle, but a happy beneficiary of a vast new social program,” the New York Times reported. “CEOs would link arms with labor and consumer groups and a Democratic President.”
The Chamber, intended as a “central organization in touch with associations and chambers of commerce throughout the country,” was founded in 1912 in response to the growing power of the labor movement and progressivism. Naturally, it tended to find more sympathetic allies in the party of business owners than it did in the party of blue-collar union workers. Still, Chamber leaders traditionally styled themselves as pragmatic and bipartisan, working with Republicans and Democrats alike to advance the interests of American industry. When necessary, this meant compromise and concession: Alongside Republican-backed tax cuts and deregulation, the organization supported aspects of FDR’s National Recovery Administration and even some collective-bargaining reforms in the Progressive Era.
But the Clinton health-care fight was a turning point. The Chamber’s attempt to curry favor with the new administration provoked a furious conservative backlash. Congressional Republicans — led by John Boehner of Ohio, then the head of the 75-member House Conservative Opportunity Society — organized a mass boycott of the Chamber, urging local and state chapters to disaffiliate in protest. The campaign was devastatingly effective: By the time the dust had settled, the Chamber had lost one-fifth of its membership.
In the face of all this, the Chamber’s leadership reneged. Robert Patricelli, the chairman of the Chamber’s Health and Employee Benefits Committee, hastily rewrote the congressional testimony that he had planned to give in support of government-run health care, instead telling lawmakers that “the definitive, current position of the Chamber on health care reform” was that “we cannot support any of the mandate proposals that have been advanced in legislation by President Clinton or members of Congress.” Chamber lobbyists were sent to the Hill to deliver a mea culpa to Boehner in person. By 1995, when the Newt Gingrich–led Republican Revolution swept the House, the Chamber was staunchly opposed to the entire Clinton agenda.
More than a matter of one policy battle, though, the saga had longer-term effects on the group. The GOP had forced the Chamber to choose sides. After the hard-charging Tom Donahue took the reins of the organization in 1997 — a change in leadership largely motivated by the Clintoncare debacle — the Chamber became a loyal mainstay of Republican politics. No more dating around; American business and the GOP were going to go steady.
The Chamber Turns Purple
For a time, the Chamber’s partisan loyalties seemed to have solidified. When health-care reform came up again during Obama’s first term, the group spent more than $100 million to oppose the Affordable Care Act. Chamber coffers poured money into supporting Republican candidates up and down the ballot. (Democratic endorsements, on the other hand, were far rarer.) In 2014, Chamber political director Rob Engstrom said that making Mitch McConnell the Senate majority leader was the group’s “No. 1 priority.”
So it came as a surprise to many in 2020 when the Chamber endorsed 23 vulnerable House Democrats for reelection. In prior years, the group had endorsed handfuls of Democrats (it backed seven in the 2018 midterms, for example); but the past election cycle saw a marked change in its approach. Over the course of a four-year period, the business association’s PAC ramped up donations to Democrats: Whereas just $9,000 (less than 5 percent) of its spending went to Democrats in 2016, it rose to $63,500 (about 18 percent) in 2018, and again to $160,000 (more than 23 percent) by 2020. In a staff call, the group’s senior vice president of congressional and public affairs called for an “all-hands-on-deck, . . . serious, sustained” effort to “normalize our relationships” with Democrats in the Senate. This shift went above and beyond endorsements: The Chamber actually changed the criteria for its congressional ratings to make the process more favorable to Democrats, adding subjective metrics like “bipartisanship” and “leadership” to its traditional “How They Voted” scores.
Why the change of heart? The Democratic endorsements certainly didn’t win any points with the Chamber’s former conservative allies. Local affiliates threatened to revolt, and some of the Chamber’s top donors and board members raised the prospect of pulling funding. Republican politicians, too, were less than pleased. “The U.S. Chamber of Commerce has become a self-licking ice cream cone,” Senator Tom Cotton said on an episode of The Hugh Hewitt Show. “As far as I can tell, it mostly just exists to continue to pay the lavish salaries of its executives and give them expense accounts for fancy meals and fund their private jet travel to their luxury condos in South Florida.” Representatives Scott Perry and Chip Roy wrote an op-ed in the Hill pillorying the Chamber’s “crony capitalism” and “craven self-serving, woke advocacy,” and Representative Kevin McCarthy claimed he no longer wanted the group’s endorsement. “They have sold out,” he told Lou Dobbs.
The Chamber, for its part, maintains that its actions are consistent with its traditional advocacy on behalf of business and free enterprise. “We have, for decades, endorsed members on both sides of the aisle based on the votes that they passed in the preceding session of Congress,” Neil Bradley, the Chamber’s executive vice president, chief policy officer, and head of strategic advocacy, told National Review. “And it just happened to be that a few more than the cycle before on the Democratic side voted . . . with the Chamber. So I guess the question is, what’s the role of the Chamber? And what’s the truth behind the Chamber’s endorsements and its record?”
He continued: “I think it’s really important for advocates of free markets — and the Chamber, at the end of the day, is an advocate for free markets — to actually want to grow champions in both parties.”
The Corporate Shift to the Left
But critics say the group’s increasing friendliness to Democrats is a symptom of corporate America’s broader shift to the left. Particularly on cultural issues, today’s titans of industry are far more liberal than their predecessors. By the numbers, the businessmen who staff large corporations on Wall Street and in Silicon Valley are decisively Democratic: 97 percent of donations from employees of Google and Facebook went to Biden’s 2020 campaign, as did 90 percent of donations from Capital One employees, 83 percent of JPMorgan employees, 80 percent of Amazon employees, and 79 percent of Bank of America employees.
“As big-business interests have changed over the last 20 or 30 years, they have become more globalist economically, and more liberal socially,” Senator Josh Hawley, a leading Republican critic of big business, told National Review. “It’s really pulled them away from Republican voters and frankly, from the middle of this country. And I think that’s what really accounts here for the shift that you’re seeing.”
From large businesses bankrolling Black Lives Matter to sanctioning red states for pro-life and religious-liberty laws, corporate America’s embrace of left-wing cultural activism has been documented at length. The Chamber has tried to distance itself from some of these trends: In a strongly worded April 2021 statement, the group came out hard against the Senate Democrats’ push to federalize elections, slamming the “disingenuously named ‘For the People Act of 2021’” for attempting to “regulate and ultimately silence Americans who choose to petition their government or participate in the political process.”
But its political positions and public-facing statements have also reflected a shift in its own outlook on controversial social issues: In 2019, the Chamber joined more than 60 business groups in endorsing the left-wing Equality Act, which would make sexual orientation and gender identity the basis for a federally protected class. Its website now includes a section on “Diversity, Equity and Inclusion,” and the organization launched its “Equality of Opportunity Initiative” in June 2020, purporting to “turn national dialogue into nationwide action” via — among other things — corporate diversity quotas and “tracking demographics related to candidate applications.” Acting independently of national leadership, Chamber affiliates in red states have fought aggressively against social-conservative legislation, from North Carolina’s ban on transgender women using women’s bathrooms to South Dakota’s push to protect women’s sports from biological male competitors and ban gender-transition surgery for children under the age of 16.
“It’s absolutely the case that equity issues and equality-of-opportunity issues . . . are of more prominence today in the minds of business leaders,” Chamber exec Bradley acknowledged. “And that includes the Chamber. So yes, absolutely — are we focusing on these problems and trying to identify ways to address them and putting more emphasis on . . . them than we have in the past? Yes. But we’re absolutely doing that [in a way that is] consistent with our core values of free enterprise and capitalism.”
A Coming Split?
In many ways, the divergence of at least parts of the Republican Party from corporate America has been a long time in the making. The business wing of the GOP has often enjoyed significant influence over the party’s political priorities. But as economic populism (especially on trade and antitrust), culture-war priorities (such as critical race theory and transgenderism), and immigration become more prominent as issues in the party, its relationship to traditional allies in the business community has weakened.
Conservative critics say that the rift between the GOP and big business has as much to do with the changing priorities of the business community as it does with a shift in Republican politics. Large multinational corporations “increasingly don’t really care much for the prosperity of American workers or American families,” Hawley told NR. “They’re much more globally focused. And if they have to choose between, say, the Chinese market and American workers, they’re going to choose the Chinese markets.”
But recent years have also seen a fair number of Republicans break with pro-business orthodoxy on a variety of issues. From Senator Marco Rubio backing a (failed) unionization push by Amazon warehouse workers in Alabama (“the conflict is between working Americans and a company whose leadership has decided to wage culture war against working-class values,” he wrote in USA Today) to the House GOP’s renewed interest in antitrust action against Silicon Valley behemoths, many of today’s Republicans sound more like Teddy Roosevelt than Ronald Reagan. Hawley, a proponent of nationalism, thinks the party needs to get back to its roots “in the 19th century and the turn of the 20th century” as the “party that was pro-industrialization, . . . pro–economic development, and . . . pro-worker.” He continued, “We should be pro-business to the extent that that’s good for American workers. . . . But what we’re not going to do is engage in a strip-mining of this nation, which is what many of these corporations want.”
This vision is not confined to nationalist politicians and intellectuals and party elites. The turn against big business is reflected in the Republican voter base: Gallup’s 2020 “confidence in institutions” poll showed just 20 percent of Republicans with a “great deal” or “quite a lot” of confidence in big business — a 12-point drop from the year before. That was the lowest level of Republican confidence in big business ever recorded by the pollster.
Of course, the relationship between more nationalist Republicans and the business-oriented wing of the GOP has been in tension in the past. On immigration, for example, the party’s border-security wing has often found itself at odds with groups like the Chamber. George W. Bush’s second-term push for mass amnesty was killed by immigration hawks in the party (with help from National Review), but not before the Chamber and other influential business groups spent heavily to support the bill. Between 2007 and 2012, the Chamber and other major lobbying groups spent $1.5 billion to influence immigration policy. “The Chamber has been such an absolute thorn in the side of any kind of rational conversation about actually securing our border rather than wanting cheap labor,” Chip Roy, the Texas Republican who is a vocal immigration hawk, told NR. “You got the Chamber of Commerce sitting down at the Rio Grande with a ‘no trespassing’ sign, kind of going ‘wink-wink,’ with a ‘help wanted’ sign on the other side.”
“That’s the Chamber of Commerce,” Roy said. “You know, that’s what they do. And that’s what they’ve been doing — I’ve been fighting the Chamber of Commerce for as long as I’ve been in Washington.”
The Trump era only exacerbated these divisions. The past five years saw the Chamber break more often and sharply with Republicans than it has in the past. Although the group did not throw its full financial and political weight behind Democrats until 2020, its effort to make a “strategic shift” away from the GOP took shape in 2017, beginning “in earnest shortly after Trump became president but long before the Democratic takeover of the House in the midterms ushered in divided government,” according to a Washington Post report. The Chamber supported the Trump administration’s traditional Republican business-friendly initiatives, such as tax cuts and deregulation, but slammed its protectionist trade policy. At the border, it went so far as to sue the White House, citing “job-killing immigration restrictions.”
“We are concerned about both the rise of progressivism in the Democratic Party and the rise of populism in the Republican Party,” said Bradley. “I think both of those things are ultimately a negative for the defense of free enterprise.”
Another point of friction was some Republicans’ behavior after Trump lost his bid for reelection. In the wake of the Capitol riot, the Chamber threatened to pull financial support from certain Republicans implicated in the certification chaos. (That particular pledge did not last, however: The Chamber backed down two months later, clarifying its position on how it would evaluate donations.)
All this comes amid a decline in the GOP’s reliance on financial backing from large business interests. The political realignment that is reshaping both of America’s major political parties is also reshaping the economic landscape underpinning their campaigns. On the 2020 campaign trail, Wall Street backed Biden over Trump by more than two to one and spent $13 million more on House Democrats than on House Republicans. Commercial banks spent more than double on Biden than on Trump. Wall Street employees donated more to Biden’s 2020 campaign than they did to both of Obama’s campaigns combined.
At the same time, Republicans have become increasingly adept at small-dollar grassroots fundraising. And amid the party’s broader alienation from big business, big-name Republicans such as Hawley and Ted Cruz have sworn off corporate PAC money altogether — a move traditionally associated with progressives like Bernie Sanders and Elizabeth Warren. Hawley and Cruz cited the raft of corporate action against Georgia following the passage of its voting-reform bill last March. The move also came “after nearly 100 corporations announced plans to sever PAC support for the pair of lawmakers following their objections to the legitimacy of November’s presidential election,” according to campaign-finance and lobbying tracker OpenSecrets.org. (Many, though not all, of those corporations have since softened their stances.)
Ironically, however, the GOP’s populist shift does not make the Democratic Party any friendlier to the kind of free-market economic policies that the Chamber has traditionally supported. The same poll that recorded a record-low confidence of Republicans in big business found an even lower figure for Democrats, 16 percent of whom have a great deal or quite a lot of confidence in big business. Very few of the Democrats the Chamber endorsed in 2020 have supported the group’s fight against the Biden administration’s economic agenda. And every single one of the Chamber-endorsed House Democrats voted for the pro-union PRO Act — a top priority on the group’s kill list. They also voted unanimously to extend boosted unemployment benefits, which the Chamber staunchly opposed.
So what now? In the face of rising inflation, flailing job numbers, and a White House in lockstep with powerful public- and private-sector unions, the Chamber’s “strategic” shift away from the GOP looks unlikely to bear fruit for its members. Bradley emphasizes that bipartisanship is an important long-term goal in and of itself: Support from both parties is crucial “if we’re going to get trade deals and have durable tax policy that just doesn’t flip back and forth every time there’s a change in control of government,” he said. “The corporate tax rate increases that President Biden championed, the capital gains tax increases that he championed — the reason that none of those things are law isn’t because Republicans control the House or the Senate. They’re not law because there are some Democrats who don’t buy into that agenda.”
“We want more people on each side of the aisle to be aligned with us on those positions,” he added.
But there are costs to this strategy, too. If the group attempts to move back into the Republican fold, they may find a party that is less reflexively sympathetic to their demands than it once was. Roy was blunt: “The last thing I give two sh**s about is worrying about the earnings reports for big corporations in America.”
For some Republicans, the Chamber’s shift is confirmation of their suspicions about big business. “They really are attempting to have it both ways,” Hawley said — the Chamber will “endorse these far-left social policies, they will try to blackmail [red] states, . . . but then they will turn around and come to Republicans” asking for tax breaks, tax credits, and trade deals.
The Chamber’s long and close relationship with the Republican Party has had its ups and downs, but today the divisions are only hardening.
Editor’s Note: An earlier version of this report overstated the percentage of Chamber PAC donations that went toward Democrats in 2020. The report has been updated to reflect more recent data.