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Republicans vs. the Business Community


We're seeing something very interesting right now. A Republican Party unmoored from its traditional supporters in the business community. A conservative base that wants something that the health care industry doesn't want. For those whose mental model of the Republican Party is that it's essentially a vessel for corporate interests, that model is about to receive a dramatic test.

In March of 2008, I attended the national policy conference put on by America's Health Insurance Plans. Dave Camp, the ranking Republican on the House Ways and Means Committee, was one of the featured speakers, and he gave the shpiel you'd expect. "We don't want a government controlled, bureaucratically regulated health care system where only those with the money to fly to other countries will be able to get life-saving treatments, and you all will be out of business," he told the insurers. Silence. "We have to start defining this debate, we have to start defining what Obama-Clinton-Stark-Dingell will be." Silence. The rest of his standard applause lines were met with similar diffidence.

Then came questions from the assembled insurers. The first asked why politicians talked so much about reform but never did anything. The next accused Camp of being exactly as extreme as Pete Stark. Then came a questioner saying: "Put your personal preferences aside for a minute. What chance do you think the Wyden bill has?"

Till that point, my mental model had been that Republican positions rested atop a bedrock of industry support. If industry moved, so too would Republicans. But that day, at least, it wasn't true. Dave Camp was considerably more conservative than the insurance industry executives. He fell flat. Andy Stern got a better reception than he did. And it's a strange day when the insurers prefer the directness of a union firebrand who tells them they have a "target" on their backs to the pandering of a Republican legislator who tells them his party will protect their industry from change.

One difference between 1994 and 2009 is that the health-care industry and the business community range from neutral to supportive of the White House. The Chamber of Commerce, in fact, is running ads against Republicans who are opposing health-care reform. AHIP wants a deal. So does Pharma. They may not want the deal that liberals want. The deal they want may, in fact, be bad. But their preferred outcome is a lot closer to the White House's vision of success than it is to Mitch McConnell's vision of success.

Republicans, however, are no more supportive of health-care reform than they were in 1994. Conservatives are exactly as angry. The town halls are, if anything, louder and more brutal. Talk radio is up in arms. The controversy and chaos are scaring the broader public. No one wants a health care bill that might contain a euthanasia provision.

We're about to see a very interesting test case: Can the business community and the health care industry deliver Republican votes? Will their presence on the side of reform -- even if only nominally so -- change the outcome? Or has the opposition of industry been an excuse for past failures, and it's in fact the minority party's incentive to kill reform that's foiled each and every attempt?

Photo credit: AP Photo/Hans Pennink

By Ezra Klein  |  August 11, 2009; 3:02 PM ET
Categories:  Health Reform  
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Next: A Bit More on Madness


Very similiar to the situation Frank describes in What's the Matter with Kansas with the business-friendly Republican moderates (some of whom would become business-friendly Democrats) vs. the populist Republican crazies. Is it possible that Republicans elites have aided and abetted the creation of a populist movement motivated by cultural resentments and standard rightwing tropes about eivls of government that they can't actually control?

Posted by: Castorp1 | August 11, 2009 3:33 PM | Report abuse

This is a very interesting post. I've felt for a long time that much of the business community does want reform, because they see how the current system adversely affects them. Business does have some ability to influence the debate through their contacts with media moguls and their advertising on Fox and elsewhere, should they want to exercise that. They must also have ties to at least some in the GOP leadership. They must see how poisoned the debate is getting, and how we may end up with nothing.

Maybe they think they can control this thing, that Baucus will give them what they want. And they may be right. But will something that can pass the Senate be acceptable to the House?

I suspect that reform has been killed by the opposition of the Gingriches and Kristols, who see it as a key to Dem success for a generation.

It really is kind of a conundrum, because the GOP obstinance seems just strong enough to defeat anything good, and business backing for a deal might make the deal just too unpalatable for progressives. But as you have said before, we need to think of it as a continuum, as a first step, in what will be a long process of reform.

Posted by: Mimikatz | August 11, 2009 3:40 PM | Report abuse

"We're seeing something very interesting right now. A Republican Party unmoored from its traditional supporters in the business community."

While the potential for this change may have been there for a few years, it seems to me that McCain's nomination of Sarah Palin was the catalyst for what really is a sea change in the nature of the GOP. She became a rallying point for all the crazies out there, and made them feel strong. The loss in November didn't cause them to break their stride for very long. Right now, this is their party.

"Will their presence on the side of reform -- even if only nominally so -- change the outcome?"

No. The problem is that Big Business' support of health care reform is barely above nominal. While we've tended to view the influence of corporations in terms of how much they gave to this or that legislator, their real clout, when push came to shove, has always been their ability to finance 'issue ads' that wouldn't say 'vote against Congresscritter Smith' but would paint Congresscritter Smith as an absolutely reprehensible Congresscritter that nobody in their right mind would vote for.

Unless there's reason to believe they're going to run ads in 2010 against Congresscritters who vote against reform in 2009 - and I see no reason to believe that - then their nominal stance won't make much of a difference, and the GOP Congresscritters will vote so as not to offend the crazies.

Posted by: rt42 | August 11, 2009 3:43 PM | Report abuse

No, business community will not deliver votes of GOP.

At this point GOP senses a strong political headwind of 'fear' as your earlier post talked about. My contention is White House and Democrats have not made things easy and will continue to muddle their message as well as strategy. This means chances of people's doubts getting addressed are less. As a result Republicans can potentially harvest the larger discontent with voters regardless of business community comes on the board or not.

Posted by: umesh409 | August 11, 2009 3:46 PM | Report abuse

I can only imagine the deal the insurance companies want - a public plan that will take all the really sick people off their books...

And income rolling in from the young and healthy who now will be mandated to purchase insurance through these same for-profit companies.

I'm actually surprised we DON'T hear more from the large businesses who are today paying for the majority of health care. Their costs are skyrocketing - so I'd think they'd be more vocal in support of reform. Or maybe American capitalists are just not happy seeing the government do anything but bailout the banks?

Posted by: anne3 | August 11, 2009 3:49 PM | Report abuse

It might make sense for really big businesses that insure tens of thousands of people to opt entirely out and set up their own health care system.

Posted by: tl_houston | August 11, 2009 3:59 PM | Report abuse

Explain to me again why the Republicans even matter in this debate? The Democrats have solid majorities in both chambers; they can get this done on their own. If they fail, it's their fault, not the Republicans, who are an opposition party right now prone to fight anything... but they don't have the votes to matter.

Posted by: BeatKing11 | August 11, 2009 4:00 PM | Report abuse

I take issue with broad brush descriptions. The business community is not monolithic. There is a progressive and a reactionary business community. Progressive businesses, corporations or small business, want to provide good benefits, working conditions, and social responsibility to their communities. There are reactionary businesses who are right wing ideologues who don't understand that good business is good relationships and social harmony. They prefer slash and burn business practices and divisive and destructive politics.

Let's remember, this is not the Republican Party of Nelson Rockefeller, Richard Nixon, or Gerald Ford. This is the Republican Party of Newt Gingrich, Rush Limbaugh, Fox News, and Glen Beck.

Posted by: cmpnwtr | August 11, 2009 4:07 PM | Report abuse

I feel that this post blurs the distinction between the business community and private insurance industry. They really have two distinct interests in this health reform debate, even though the non-insurance business industry has not come out strongly for reform, yet. One political mistake made by the Democrats is not to ally themselves more strongly with non-insurance business interests.

Posted by: michaelterra | August 11, 2009 4:09 PM | Report abuse

The people doing the screaming and shouting for the most part are screaming and shouting abou the very things they're already enjoying like social security and medicaid. Are they really all so dumb that they believe the likes of Lou Dobbs who has more money than god and will never have to worry about how to pay for insurance or medical costs? Some of these people I see are overweight and older than I am, sooner than later they will need medical services because of their age and inability to stop eating like pigs but they're out there shouting and screaming like idiots at the behest of the rich folks like Dobbs and Limbaugh (Rush never had to have health insurance to pay for his illegal drugs). They are not patriots they're only zealots for the ideology that they are blind to. If we don't get health reform and health insurance reform this time around the Republicans can kiss their big fat lilly white and rich butts good bye, eventually the robots that are doing the screaming at these town halls will need medical attention but won't be able to afford it, who will they blame then? I hope the Dems just take advantage of being in the majority as the GOP did when Bush shoved Iraq down our throats and referring the tax payers who objected as focus groups. I'm proud to be American but so many of my country men are just blithering racist uninformed idiots. The GOP version of everything is to do nothing at all that benefits the general public, this has been going on since Reagan's "trickle down" nonsense which led financial chaos as did Bush's economic and "war" policies but there's zombies out there who don't seem to know they've been duped. These people can't think for themselves they're letting the right wing talk show hosts and the GOP do it for them without knowing what they are talking about. If this reform doesn't go through I hope all of the people pictured in protest end up needing the very things they're protesting. Stupidity is obviously not a disease you can cure like Republicanism.

Posted by: davidbronx | August 11, 2009 4:15 PM | Report abuse

The answer here is "it depends".

By "business" I assume we're talking about the health care industry and not private industry generally. I suspect most businesses would want to see more reform than is currently being proposed (e.g. a genuine public option or single-payer could reduce their expenses).

As far as the health insurance industry goes, "reform" could net them new profits -- and that is pretty much the only thing that matters to them. If we have expanded coverage, no competition from a public plan, and subsidies galore, it means that the industry will have a new revenue stream. Even if the industry ends up losing some revenue in one area, the "reform" could be tailored in such a way that they end up with an even large revenue stream and with even larger net profits.

The main industry fence sitter seems to be Well-Point which could potentially lose out in the individual market. However, even in the case of Well-Point, it seems a critical mass of Senators seem inclined to protect Well-Point's turf too by eliminating any possibility of ANY public option (no matter how severely curtailed).

The co-op option too presents absolutely no threat to any of the big insurers.

In terms of giving though; while the Dems finally surpassed the GOP in donations from the health insurance lobby in 2008; the GOP is still receiving a lot of money. If it comes down to needing a few GOP votes, I'm sure the industry can call in a few chits from some members of the GOP.

Most members of the GOP though seem to have made a political calculation that no degree of compromise is likely to earn them points with their base.

Posted by: JPRS | August 11, 2009 4:19 PM | Report abuse

Clarification: When I say the GOP "base" I'm referring to its "political base".

In reference to the donor base; as stated in my previous comment, I suspect, if there is a deal on the table that the industry likes, McConnell will find a way to give the industry enough votes to get things over the hump -- provided he's able to give the overwhelming majority of his caucus members political cover for a "no" vote. This is one reason I suspect that there's so much emphasis being put on the Finance Committee's proposed legislation.

Posted by: JPRS | August 11, 2009 4:25 PM | Report abuse

If this is the case, it is a very interesting flare up of a political dynamic that Steven Teles in a book chapter titled "Conservative Mobilization against Entrenched Liberalism" [the book is The Transformation of American Politics, edited by Paul Pierson and Theda Skocpol].

Teles notes that conservative organizations were having a tough time succeeding in the 1960s and early 70s. Why?

"Conservatives were slowly recognizing that business could not be counted on to protect the free market; they would always take advantage of short term opportunities, even when this expanded government control. Ultimately, conservatives needed to find nonbusiness constituencies to defend, ones that would allow them to claim the mantle of the public interest from the left" (177).

Businesses, beholden to things like profit, wouldn't mind taking the burden of health care off their shoulders. Conservative ideologues, not beholden to short-term incentives like the market, but only to their own ideological purity, can afford to grind the nation to a halt over a political point.

Posted by: y2josh_us | August 11, 2009 4:29 PM | Report abuse

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