POLITICS
01/14/2015 08:39 pm ET Updated Jan 16, 2015

How The Chamber Became The Most Powerful Group That Each Party Kinda Hates

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WASHINGTON -- Forty-plus minutes into his annual press conference on the state of American business, U.S. Chamber of Commerce President and CEO Tom Donohue fielded a question from The Washington Post's Dana Milbank.

Known for his burlesque takes on insider-Washington events, Milbank asked if the current good economic news had made Donohue regret his prediction that President Barack Obama's policies would destroy the free enterprise system.

"You find one place that we projected the destruction of the free enterprise system, and I will buy you lunch," said a playfully indignant Donohue on Wednesday.

The contours of the bet established, Milbank left confident (see his post Wednesday evening) that he would soon be dining on the dime of a man who runs one of Washington's most powerful lobbies.

However apocalyptic the chamber's rhetoric proves to have been -- and regardless of how the two men settle their wager -- what is clear is that the Chamber of Commerce occupies a far different place in the political firmament than it did just a few years ago. That's not just true with respect to its relationship with the White House. It's also true within the Republican Party, which has grown more wary of the image the group projects and the policies it pushes.

"Cultural issues have taken a more prominent role than economic issues in the division of the parties, and some natural tensions have occurred," said former Rep. Tom Davis (R-Va.). "They are trying to both wrestle with it. The Republican Party in many ways has become a more populist, lower-middle-income, white party. On the Democratic side, [Massachusetts Sen.] Elizabeth Warren is trying to bring Dems back to their populist roots. The alignments now are racial, ethnic and cultural before they are economic."

In this new environment, the chamber has had to adjust. In his yearly address four years ago, Donohue argued that an oncoming "regulatory tsunami" from Democrats posed a significant threat to "the future of American enterprise" and pledged to support House Republican efforts to fully repeal the Affordable Care Act. On Wednesday, he still lamented various current regulations (and those to come) but implicitly conceded that his dire warnings hadn't materialized. "The state of American business is improving," Donohue said.

On health care reform, meanwhile, there was talk only of piecemeal alterations -- repeal of the employer mandate and medical device tax -- this time around.

"There aren't 60 votes in the Senate to pass a repeal bill," conceded Donohue's top lobbyist, R. Bruce Josten. "President Obama is still the president."

Were these the only two examples of the chamber fine-tuning its posture, then all Milbank would have is a clever gotcha story. But the evolution has been much more profound, and it has created some complex new legislative and political alliances. During his speech, Donohue made roughly 30 specific policy pronouncements. Sixteen of them could best be described as mirroring congressional Republican priorities. Many had bipartisan support. But on some of the most significant issues -- infrastructure spending, immigration reform, a new cyber security regime, charter extension for the Export-Import Bank -- the business lobby reflected the president's agenda.

"The Chamber isn’t going to agree with either party on every issue," said Blair Holmes, a spokeswoman for the group, in comments a day before the Donohue speech. But she added, "If you look at the Democrats’ position on issues such as tax rates, regulations, energy and the EPA, unions, free speech, and trial lawyers, you can see why the Chamber supports the members that we do."

The chamber certainly remains a Republican-leaning entity. One top Democratic strategist burst out in laughter when asked if he saw a future in which the group would split its support more evenly. This past election cycle, the chamber spent $33.3 million aiding Republicans and just $1.5 million helping Democrats.

But the money tilt obscures how much old tensions have eased, lawmakers and advocates say. In 2010, the White House readily made senior adviser Valerie Jarrett available to The Huffington Post to launch a public spat with the chamber over its opposition to the administration's policies. A year later, the president spoke before the group. This past week, the administration declined a request for a Jarrett interview to discuss the business lobby.

For many Democrats, this evolving relationship is a convenience more than a courtship. Led by the aforementioned Warren, they believe their party is already too comfortable accommodating the business community's agenda. In the early days of the current Congress, this faction has been a singular force on the Hill, tripping up efforts to further delay regulatory reform that seemed destined to pass.

But if an ascendant group of populist Democrats may keep the chamber firmly outside their party's tent, parallel developments within the Republican Party haven't exactly created a comfortable environment there. In recent years, a strand of conservative anger toward the chamber, fueled by its support of the big bank and auto bailout and its backing of government stimulus efforts, has morphed into a campaign weapon. Heading into the 2016 presidential election, the term "Chamber of Commerce Republican" has been wielded as an epithet.

At a conference hosted by the conservative group Heritage Action for America this week, the antipathy was evident. Attendees lamented the "crony capitalism" that they discerned at the forefront of the chamber's agenda, while Mike Needham, Heritage Action's CEO, declared that his group's priorities would differ from those "talked about in the halls of Congress, the pages of Politico or the scorecard of the Chamber of Commerce."

"But that's the point," he added.

And yet, for all this, the chamber remains perhaps the predominant political force within Republican ranks. It had an incredibly successful primary season in 2014, propping up Rep. Mike Simpson (R) in Idaho, aiding now-Senate Majority Leader Mitch McConnell (R) in Kentucky, and beating back a tea party challenge in Alabama as well as a more serious threat in the Senate race in Mississippi.

"Is there an example of a race the chamber was involved in and was vilified by a candidate who won?" asked Holmes, rhetorically.

The group's imprimatur was partially blamed for the shocking defeat of then-House Majority Leader Eric Cantor (R-Va.) in his primary election -- the prevailing critique being that he was too closely aligned with the chamber and too open to immigration reform. But veterans of that race scoff at this line of argument.

"I don’t think the chamber had anything to do with it. I think it was self-inflicted," said Doug Heye, Cantor's former communications director, arguing that any Republican and many Democrats would welcome the chamber's endorsement. If the campaign could be run again, Heye added, Cantor's team would try to be more closely associated with the group. "The chamber didn’t do an event with us. I wish they would have. But they didn’t."

In the end, the conservative operatives interviewed for this article said they couldn't envision a future in which the Chamber of Commerce shifted its allegiance in a serious way to Democrats, even if it does soften its rhetoric and explore areas of legislative commonality. As Heye's reflection underscores, the group is too much of a juggernaut for the GOP to simply ignore or annoy. And there is faith that, even in the worst of times, the chamber will see Republicans as the lesser of two evils.

"The business community still hates the Democrats far more than it minds having an occasional fight with conservative Republicans," said one Republican operative.

This article was updated after publication to clarify Doug Heye's remarks.

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