Government Affairs recruiter Ivan Adler discusses the House GOP turmoil and its adverse reaction on business.
By Eliza Newlin Carney and Andrew Siddons | Oct. 9, 2015
California Republican Kevin McCarthy’s decision to drop out of the race to replace Ohio’s John A. Boehner as speaker intensifies the ideological warfare between pro-business Republicans on K Street and tea party activists.
In the short term, McCarthy’s abrupt move may actually brighten the outlook for business leaders bracing for battles over the budget, the debt ceiling and the Export-Import Bank. That’s because Boehner, who planned to retire at the end of month, said Thursday he would stay until Republicans tap a new speaker, freeing him to settle some unfinished business.
But in the long term, GOP disarray and the growing clout of conservatives in the House suggest a dramatic shift within the Republican Party that could weaken the party’s business allies. Tea party activists on and off Capitol Hill are agitating for an agenda that is anathema to the K Street crowd, including the shuttering of the Export-Import Bank and direct confrontations with the White House that could lead to a government shutdown.
“There was this incredible iron grip between the appropriators, leaders, K Street — think how busted up that is,” declared Adam Brandon, CEO of the tea party group FreedomWorks. “The next speaker is going to be much more interested in keeping grassroots Americans happy than keeping K Street happy.”
FreedomWorks ginned up more than 11,000 messages to Capitol Hill in the 48 hours prior to McCarthy’s announcement, urging Republicans not to vote for the Californian on the grounds he is “John Boehner lite,” and that Boehner’s opponents “cannot allow his favorite crony to replace him.”
At a Manhattan dinner on Wednesday night with the free market Committee to Unleash Prosperity, “I bombastically said Kevin McCarthy will not be the next Speaker of the House,” recalled Brandon. “Everybody laughed at me.”
The next obvious question, acknowledged Brandon, was tougher to answer: If McCarthy won’t be speaker, then who will? Brandon said he would be calling Jeb Hensarling, R-Texas, a strong Ex-Im Bank foe, to try to convince him to get into the race. Brandon said he would be happy to see any member of the conservative House Freedom Caucus, including its chairman, Ohio’s Jim Jordan, in the speaker’s shoes. Jordan has said he has no interest in the speakership.
“If nothing else, these guys have really, really helped gain leverage for the House Freedom Caucus and the more conservative members of the House,” said Brandon, referring to Boehner and McCarthy. He added: “I would expect a much more muscular and assertive leadership team coming together.”
GOP consultant Sal Russo, founder of the Tea Party Express, said the transition might ultimately clarify where the GOP stands on policy issues.
“You’ll probably see, no matter who is the leader, Republicans in the House making more clear where they stand on issues,” said Russo.
Of course, no Freedom Caucus member has yet demonstrated the ability to muster enough votes to be speaker — something that gives Republican allies on K Street some comfort as they reel over the departure of Boehner, their leading champion, and over the ensuing chaos in the House Republican Conference.
“The direction of the House Republicans will be dictated by who sits in the speaker’s chair,” said Ron Bonjean, a former senior GOP aide in both the House and Senate, who heads the consulting firm the Bonjean Company. “At this point, the House Freedom Caucus has not yet been able to provide a person who can get 218 votes. If they are able to produce someone who can get those votes across the spectrum, then you would see the House going in a much more conservative, right-leaning direction.”
Bonjean acknowledged that “the mood is one of severe concern” among GOP advocacy professionals. It’s anyone’s guess who the next speaker will be, in the absence of any one Republican who can demonstrate a strong vote count, at least at this point.
At the same time, noted Bonjean, “the fact that Speaker Boehner remains in office until the next speaker is chosen means the House will be under good stewardship.”
Boehner’s decision to stay on “benefits those who would like to see some of this must-do legislation get done,” said Bonjean.
“I’m certain Boehner will not allow the government to shut down,” said Republican lobbyist Sam Geduldig, a partner at CGCN Group. “I’m certain Boehner will not allow us to default on our debt.”
But the House GOP turmoil is bad for business, said consultant and business lobbyist Ivan Adler, a principal at the McCormick Group.
“The higher level of drama that goes on here has an adverse effect on the amount of business for K Street,” said Adler. He noted that corporations “feel no need to pay lobbyists if they feel nothing is going to get done.”
Adler said the turmoil puts pressure on House Ways and Means Chairman Paul D. Ryan, of Wisconsin, to step forward. But Ryan, despite being one of the few House Republicans who could match Boehner in political experience and fundraising, has said he’s not interested in running