Republican Business Lobbies and Tea Party Disagree On Debt Plan

The debt ceiling debate continues to reveal a deep rift in the the Republican Party between the business elite (including former Bush Administration officials who raised the ceiling without controversy or chaos) and the grassroots, anti-establishment Tea Party base. The split — which pits a single-minded focus on keeping business running smoothly against a single-minded focus on bringing the federal government to its knees — was previously masked by a unified front of opposition to Democratic policies such as health care reform and stricter environmental regulations.

On Tuesday, the Chamber of Commerce sent a letter to Congress encouraging them to vote for Speaker of the House John Boehner’s plan to raise the debt ceiling for six months. But the Republican Study Committee, a group of over 170 conservative members of the House, announced that they opposed the bill. Rep. Jim Jordan (R-OH), chairman of the Republican Study Committee, doubted that Republicans would accept the plan. “We think there are real problems with this plan,” he told the AP. Michele Bachmann, presidential candidate and chairman of the Tea Party Caucus in the House, continues to oppose all attempts to raise the debt ceiling.

Instead of Boehner’s plan, the Republican Study Committee supports the Cut, Cap, and Balance Act, which has already passed the Republican-dominated House but has no chance of passing the Senate. The Cut, Cap, and Balance Act is a darling of ultra-conservatives and Tea Party lawmakers because it forces Congress to pass the Balanced Budget Amendment — an amendment to the U.S. Constitution that would require massive cuts to entitlements and social welfare programs like Medicare and Social Security — before raising the debt ceiling. Boehner’s plan requires a vote on the Balanced Budget Amendment after the debt ceiling has been raised, but does not require Congress to pass the amendment first. This does not satisfy conservatives in the House, who prefer the pure vision of the Cut, Cap, and Balance Act. “The Senate should resume debate on the Cut, Cap, and Balance Act, amend it if necessary, and pass it, so we can provide the American people a real solution,” Rep. Jordan said in a statement

The Chamber of Commerce, on the other hand, is more concerned with protecting the interests of Big Business than fidelity to ultra-conservative ideology. In 2008, they supported Obama’s stimulus package, which most grassroots conservatives fiercely opposed. And now they support Boehner’s plan to raise the debt ceiling and avoid the government defaulting on its debt. In a letter sent to Congressmen on Monday, they underlined the severe risks to the economy of such a default. “A default on the obligations of the United States,” the letter reads, “would most assuredly cause severe, immediate, and pervasive economic harm ” and “political brinksmanship is no longer an acceptable strategy for either the White House or congressional leaders.” The Chamber may not be thrilled with Boehner’s plan, but they are not willing to oppose it and risk default.

It may turn out that none of this matters. Obama has already promised to veto the Boehner plan since it only raises the debt ceiling until December, which would force put the government into the same situation it’s in now — legislative gridlock and a real threat of default — in six months. Obama has pushed instead for Senate Majority Leader Harry Reid’s plan, which raises the debt ceiling through 2013.

Meanwhile, the latest polls show that most voters (86%) are worried about the consequences of default, and a majority (56%) believe that a plan to reduce the deficit should include some spending cuts and some revenue increases — which both business-friendly and Tea Party Republicans strongly oppose.


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