Major corporations speaking out, and sometimes voting with their pocketbooks, against Georgia’s new election law is the latest example of a growing rift between the Republican Party and its traditional support base in the business community.
Big businesses are no longer seen as reliable allies on conservative policy priorities that do not protect their bottom lines, party operatives say. Now, some Republicans are considering policies that will punish corporations ranging from Big Tech to so-called “woke capitalists.”
The split was heightened under former President Donald Trump, who supported higher tariffs and trade policies that were heavily opposed by big business. Georgia’s new election law was passed after Trump narrowly lost the state to President Joe Biden.
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Since then, Republicans have discussed taking a harder line on antitrust laws in a departure from party orthodoxy that dates back to Ronald Reagan. A trio of GOP senators sent a letter to the Federal Trade Commission arguing the agency took too light a regulatory approach to Google during the last Democratic administration.
“The FTC’s failure to enforce the nation’s antitrust laws signaled to similarly dominant market participants, in tech or elsewhere, that compliance is optional,” they wrote. “In other words, lax enforcement of our laws encourages lawlessness.” One of the signatories, Missouri Republican Sen. Josh Hawley, has proposed a $15 an hour minimum wage for big companies with revenues in excess of $1 billion. This is the same rate socialist Sen. Bernie Sanders of Vermont would like to impose nationally.”
“For decades, the wages of everyday working Ameircans have remained stagnant while monopoly corporations have consolidated industry after industry, securing record profits for CEOS and investment bankers,” Hawley said in a statement at the time. “Mega-corporations can afford to pay their workers $15 an hour, and it’s long past the time they do so, but this should not come at the expense of small businesses already struggling to make it.”
But the GOP criticism of corporate America is not confined to populists like Hawley. No less a champion of corporate political speech than Senate Minority Leader Mitch McConnell has raised the issue. “Parts of the private sector keep dabbling in behaving like a woke parallel government,” the Kentucky Republican said. “Corporations will invite serious consequences if they become a vehicle for far-left mobs to hijack our country from outside the constitutional order.”
Some of those consequences could include seeing their antitrust exemptions yanked, as some Republican senators have floated doing to Major League Baseball after the All-Star Game was moved out of Atlanta in protest of the Georgia election law. “This could be a real game changer for the party,” said a Republican strategist.
Other Republicans have faced a political backlash for being seen as willing to side with business interests over conservative values. This happened when South Dakota Gov. Kristi Noem opposed a bill blocking transgender athletes from competing against biological females in girls sports, in part citing concerns about corporate boycotts of her state. “She wasn’t elected governor of the Right,” a veteran Republican operative said.
Former Vice President Mike Pence had a similar experience when he was governor of Indiana, having to back down from his support for a religious liberty law modeled on the 1993 Religious Freedom Restoration Act. Businesses had threatened boycotts on the grounds that the legislation was intended to allow companies to discriminate on the basis of sexual orientation for religious reasons. The controversy did not prevent Pence from joining the 2016 Republican ticket to shore up evangelical voters for Trump.
One Republican consultant pointed out that the rift is only likely to get worse for two reasons. “No. 1, China,” the consultant said. “No. 2, growing support for Republicans from voters without college degrees.”
Still, this would be a major shift for Republicans. It would potentially leave the party without a counterweight organized labor’s support for Democrats. While some would like to see the GOP become more of a working-class party, Democrats still received 86% of the more than $67 million that unions gave to candidates and parties last year. The left-leaning Services Employees International Union has eclipsed some older-line labor organizations in influence.
Trump made inroads with organized blue-collar voters in 2016, holding Hillary Clinton to a Democratic low of 51% of union households. Biden rebounded to 56% but still underperformed former President Barack Obama.
Republican campaign arms saw a large drop in financial support from corporate PACs last year, but so did their Democratic counterparts. The pandemic appears to be a bigger reason for the downturn than politics. But many corporations were put on the defensive about giving to congressional Republicans who contested the Electoral College results after the Jan. 6 riot at the Capitol.
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Nevertheless, Republicans are likely to resist Biden’s proposal to raise the corporate income tax rate to 28%. It was cut to 21% from 35% under Trump in a bid to boost American competitiveness.
The U.S. Chamber of Commerce still endorsed every Republican incumbent seeking reelection to the House last year plus 17 incumbent GOP senators despite strained relations with the party. Still, White House press secretary Jen Psaki quoted the chamber’s praise for the Biden infrastructure package from the podium.
