GOP Moves to Mend Rift With Big Business

Confronted with a threat to spend campaign dollars elsewhere, lawmakers pledge to advance business agenda.

There's nothing like a screeching alarm from a powerful ally to get the attention of lawmakers.

That's been the strategy of one of the Republican Party's bulwark supporters, Big Business - as staunch a supporter of the GOP as Big Labor is of Democrats.

Big business, specifically, the Business-Industry PAC, an influential political-action committee in Washington, has publicly and loudly registered its unhappiness with Republican lawmakers.

On everything from free trade to health care to trade sanctions, the GOP isn't behaving as it historically has, says BIPAC, as the group is known. As a result, BIPAC told its corporate followers, it plans to reexamine who qualifies for its campaign donations.

After four months of public and private wrangling, including BIPAC's Internet posting of 21 House members on the "wrong" side of business issues, the GOP leadership is responding in a way Wall Street likes.

Last week, House Speaker Newt Gingrich announced he would bring fast-track trading authority for the president - which Congress rejected last year - back for a floor vote in September. Mr. Gingrich also said he would make funding for the International Monetary Fund a priority. Wall Street is eager for Congress to approve the funding to help stabilize Asia's financial crisis.

And on June 26, Senate majority leader Trent Lott said he is creating a bipartisan task force to examine US sanctions around the world and "determine their success and effectiveness."

A different Republican Party

One reason for the unusual tension between business and Republicans is that today's GOP is not your father's Republican Party. The rise of the religious right, and the growing power of small business, has made the old Wall Street-dominated party a thing of the past. The political dynamics have changed too. The GOP leadership is restricted by the party's thin majority and a Democrat in the White House.

But big business doesn't want to hear excuses. "How ironic that, after decades of GOP rhetoric pledging fealty to free enterprise, global competition, and less government interference, business cannot rely on a Republican Congress to advance these principles," wrote BIPAC's Charles Mack and Bernadette Budde in a March memo. BIPAC funds business-friendly congressional candidates and is a pacesetter for corporate political-action committees.

"Largely, the area where we've been disappointed is trade," says Paul Huard, senior vice president for policy with the National Association of Manufacturers here.

Sanctions everywhere

Beyond defeating fast-track last year, Congress has been sanctions happy this year. The House approved trade sanctions against nations that practice religious persecution and, fearing a breach of security, blocked exports of American satellites to China so that they can't be launched on Chinese rockets. These measures have not passed the Senate. Meanwhile, sanctions against India and Pakistan kicked in after those countries exploded nuclear devices.

GOP lawmakers argue they are not there just to serve big business, but small business as well.

The Republican Party argues it has done plenty for big business since it took over, especially in the area of taxes. It's passed welfare reform, cut capital gains taxes (Speaker Gingrich proposed another capital-gains tax cut last week), balanced the budget, and fended off an energy tax. More recently, it killed the tobacco bill, which some business leaders worried could set a precedent of Congress targeting and taxing industries it doesn't like.

Some analysts see the disagreements between business leaders and Republicans as overblown. They interpret BIPAC's threat to move campaign dollars from Republicans to Democrats as more a cry for attention than a serious switch in allegiance. Would big business be happier with a Democratically controlled Congress? they rhetorically ask.

BIPAC's Mr. Mack says the answer to this is no. "Candidly, I don't want that to happen," he says. Asked how many Democrats BIPAC now wants to support, he says the number is four - the same number it backed in 1996.

Lawmakers such as Rep. Philip Crane (R) of Illinois intimate that big business ought to start recognizing that it's part of the problem.

"While business can complain, it should analyze where it has been failing," says Representative Crane, chairman of the Ways and Means Subcommittee on Trade. In recalling the defeat of fast track, he says unions were out in full force, handing workers cell phones with pre-programmed numbers of their congressman so they could just push a button to voice their displeasure with fast track.

Business, he says, fails to effectively communicate with its workers and Congress about the importance of trade to the American economy.

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