Of the few clear truths in Washington’s nearly resolved debt debate, there is this: House Republican freshmen made good on their promise to vigorously push President Obama, and Democrats, toward fiscal austerity. They were elected to Congress last November with the help of some $34 million in campaign advertising from the U.S. Chamber of Commerce, the big business lobby that wields more wealth and influence than just about any other group in Washington. But no one could have predicted how much the freshmen – “hobbits,” as the Wall Street Journal called them last week – would challenge the Republican Establishment, notably House Speaker John Boehner, a longtime business ally whose proposal to raise the debt ceiling spectacularly failed last Thursday at the Tea Party’s hand.
Let’s call it a case of buyer’s remorse. For months, the business community has consistently argued that the nation’s $14 trillion debt limit must be raised to protect the federal government’s credit rating and avoid rattling the global financial system, which some analysts feared would upend a fragile economic recovery. House Republican freshmen, particularly members of the Tea Party caucus, unapologetically rebuffed such ideas. At an Atlanta Rotary Club event in June, Chamber of Commerce CEO Tom Donohue ominously said of the freshman resistance, “We’ve got a lot of new people pounding their chest.” And, he added, “We’ll get rid of you.”
Last week, the Chamber praised Boehner’s proposal as “responsible.” On Sunday, of course, the President and Senate leaders from both political parties crafted a proposal that would raise the debt ceiling by $2.1 trillion, and over the next decade make at least $2.4 trillion in spending cuts. The Chamber joined other business groups, such as the Business Roundtable, which represents CEOs, in supporting the agreement. “This agreement,” Donohue said in a Monday statement, will “provide a workable, enforceable mechanism to ensure that the cuts actually take place.” The Chamber has sent sent an electronic alert to its extensive grassroots network urging them to contact some of the same Republican freshmen it helped elect in order to tell them to support the “key vote,” a designation used to assess an elected official’s commitment to business interests.
Speaker Boehner must now sell this new agreement to his fractured caucus. If he falters and the Tea Party freshmen endanger the deal, the Chamber of Commerce will be faced with something every business hates: bearing the cost of a bad investment.