Boehner To Silicon Valley: Will The GOP Embrace Innovation?

05/18/2011 12:07 am ET | Updated Jul 17, 2011

With local heroines including House Minority Leader Nancy Pelosi and Sen. Dianne Feinstein, Silicon Valley has long been perceived to be a stronghold of the country's Democratic elite. The affair between President Obama and denizens of Sand Hill Road has been a public romance: Throughout his political career, Obama has held fundraisers in the area, headlined town halls and touted local businesses like Google and Facebook as exemplars of American ingenuity.

But on Tuesday, Speaker of the House John Boehner went where few conservatives like him have gone before, taking to Palo Alto and holding forth at a fundraiser in the heart of the valley with some of the industry's leading lights.

Boehner's outreach to the tech sector may come as little surprise: A trek to northern California, with its deep coffers, carries with it the promise of campaign-building fortune. But Boehner's visit also represents a tactical shift by the tech community towards a strategy less partisan and more pragmatic than in years past.

Industry giants Facebook and Google have begun to invest significant funds toward lobbying efforts, and as companies grow older -- and more profitable -- the sector has become increasingly aware of the import of bipartisan outreach and a finer tuned political machine. Tuesday's event with Boehner was co-hosted by three leading industry figures: Michael Holsten, CEO of Hewlett-Packard; Michael Splinter, CEO of semiconductor and solar technology manufacturer Applied Materials; and Carl Guardino, President of the Silicon Valley Leadership Group (SVLG), an interest group representing over 300 local businesses, including Adobe, eBay, Dell, Netflix and Apple.

According to Steve Wright, SVLG's vice president for strategic communications, attendees likely took up three primary concerns with the speaker: corporate tax reform, repatriation of foreign funds and immigration.

While both Democrats and Republicans alike have promoted the idea of tax reform, little has been done to tackle the subject. Brendan Buck, Boehner's spokesperson, told HuffPost the speaker "supports comprehensive tax reform" at all levels "so we can lower rates and become more competitive with the rest of the world."

Buck pointed to the recently released Republican budget, which aims to lower the corporate tax rate from 35 percent to 25 percent and "remove distortions from the code by eliminating or modifying deductions, credits and special carve-outs that leave many companies paying no tax at all."

Drew Hamill, a spokesperson for Rep. Pelosi, reaffirmed her desire to close corporate loopholes and reform the tax code but questioned Republican commitment to the issue, said, "I think we know where [the GOP is] on closing the loopholes on big oil," referring to recent resistance to a Democratic proposal to end taxpayer subsidies to oil and gas companies. "I think that implies that Republicans are not serious about getting rid of loopholes and reforming the tax code," he added.

On the subject of repatriating foreign funds, SVLG's Wright noted that "almost trillion dollars were being held offshore." He explained that with some Silicon Valley companies, "up to 60 percent of their revenue may come from sales of products overseas." Calling this "a pretty significant amount," Wright said that participants in the meeting hoped to press Boehner to determine a way for companies to bring funds back into the U.S. without being subject to the current 35 percent tax.

But on the complex and controversial issue of immigration, the road ahead remained unclear. Calling immigration a "longtime issue" in the Valley, Wright said that current immigration policies were hampering innovation and expansion, explaining that many of the sector's "best brains," workers from overseas trained in the U.S., were at best being forced to leave the country, and at worst able to set up rival companies overseas.

Wright said his group was aiming to get "better flexibility" green cards and H1-B visas, those that grant temporary employment to skilled foreign workers.

Though the White House continues to hammer home the importance of immigration reform -- Obama himself recently spoke to the need to keep skilled workers in the U.S. -- Wright believes that given the current political climate, "comprehensive immigration reform will be almost impossible." Reforming certain aspects, including visas and greencards "is a slice that won't hurt American jobs, but will help grow American business."

Buck had little light to shed on Boehner's position on the subject, saying the speaker "hadn't addressed that issue recently."

Boehner's office would not comment on the Silicon Valley event or details surrounding it, but Wright, for his part, seemed bullish on the prospects for change. Politicians "used to come to Silicon Valley [and see it] more as an ATM machine," he said. "But we've noticed real interest to engage in the issues."

Fueling speculation that the relationship between the GOP and Silicon Valley may be even closer in the months to come, he pointed to a conference call held Monday between Majority Whip Kevin McCarthy (R-Calif). and 25 area CEOs.

In a statement to the HuffPost, Rep, McCarthy's spokeswoman Erica Elliot said McCarthy "is interested in fostering innovation and American competitiveness and is committed to listening to leaders within the business community and exploring their ideas."

But so far, GOP inroads in Silicon Valley have yet to become cause for concern among Democratic circles. Referring to the Tuesday meeting between Boehner and tech denizens, Hamill said, "I'd be interested in seeing the particulars before we say that Silicon Valley is being taken over by Republicans. When you look at what's been done, agenda-wise, you will see that Democrats have been the ones leading the way on competitiveness and innovation. Our record there is clear."