By Tory Newmyer, writer
FORTUNE -- Last week, right-leaning corporate powers were gnashing their teeth as the Republican-led House of Representatives they helped sponsor nearly pitched us into a debt default. That outcome averted, this week they're beginning to puzzle through how to translate their buyer's remorse into something constructive -- perhaps by investing in primary challenges to the most hardcore ideologues in Congress.
That the Republican Party is riven so fundamentally between its populist and establishment wings these days shouldn't be a great shock, considering the Tea Party tantrum that precipitated the shutdown and default brinkmanship was a sloppier rerun of the 2011 standoff.
But it does appear only now to be dawning on business leaders how little leverage they have with the band of stalwarts that out-maneuvered their own leaders in the Capitol to manufacture this last crisis. As Politico notes, the business groups that exist to channel the corporate agenda in Washington are being forced to reckon with the fact that they are badly outgunned out in the states by a new breed of conservative agitators -- groups like Heritage Action for America and the Senate Conservatives Fund, with deep pockets and no patience for compromise.
"Fundamentally, if the business community wants to be more engaged in the grass-roots politics, they have to have a permanent presence there," Heritage Action's Dan Holler told Politico.
But aren't these groups the newcomers to the grassroots? They're Washington creations, after all, while the nation's top corporations employ hundreds of thousands of people all across the country. The answer appears to be, "Yes, but ..."
Consider this: Only one company on the Fortune 100 is headquartered in the Congressional district of what the New York Times calls the "Tea Party core" -- the 38 most radical Republicans in the House (That company is ExxonMobil (XOM), No. 2 on the Fortune list, and its representative is Kenny Marchant, one of 144 House Republicans who voted against the package to reopen the government and lift the debt ceiling last week.)
Expand that universe to include the 42-member second tier of hardliners, and you capture three more Republicans representing top corporate headquarters: Ohio's Steve Chabot (Proctor & Gamble (PG) and Kroger (KR)); Illinois' Aaron Schock (State Farm and Caterpillar (CAT)); and from the same state, Rodney Davis (Archer Daniels Midland (ADM)). But both Davis and Schock voted for the compromise package, and I'd argue Schock for one does not rank among this faction.
Overall, House Republicans represent just 27 companies on the Fortune 100. These stats need a small constellation of asterisks. A member of Congress in a district without a major corporate headquarters may still represent an area where a company's top leadership lay their heads down at night. Or the district could be home to an operations center or some other outpost that would mean the company's employees make up a significant part of the district's economic base.
And geography is hardly destiny. Some of the companies on the roster are helmed by executives who have carved out publicly conservative profiles despite operating in bright blue Congressional districts. Meanwhile, Ted Cruz, the freshman Senator from Texas who arguably engineered the shutdown and debt ceiling fight, represents 10 companies on the list.
Nevertheless, the lack of overlap between the faction of House Republicans most averse to compromise and the home bases of companies most eager for a functioning government does signal the profound disconnect between the two.
The economic impact of America's biggest companies is undeniable: If the Fortune 500 were a country whose GDP represented sales, it'd be the second-largest economy on earth. And yet Tea Party Republicans representing largely rural districts sound proud not to be acquainted with those companies' leaders.
"I guess they have their connections, but we're not hearing directly from them at all," Rep. Tim Huelskamp, a Republican representing central and western Kansas, told me earlier this month amidst the debt ceiling standoff. "Maybe it's the big difference between corporate CEOs who worry about quarterly reports and my folks at small businesses who worry whether they're going to hire employee number 51. They're not worried about the debt ceiling issue."
Of the CEOs publicly warning about the consequences of a debt default (AT&T's Randall Stephenson and BlackRock's Larry Fink are among those most vocal), Huelskamp said, "I'll admit I have no idea who these folks are. They have nothing to do with my district. They aren't active and engaged in the political process other than when things like this come up, and they essentially love the status quo."
It goes both ways. On Monday morning, Tom Donohue, the top business lobbyist in Washington as president of the U.S. Chamber of Commerce, acknowledged he doesn't know Cruz.
Stitching the GOP back together calls for finding a way to bridge that divide -- or for one side to categorically vanquish the other -- because the current state of the party can't abide.
Neither the domestic nor international financial systems are prepared for the most powerful economy in the world to become irrational in how it runs its finances.
By Mohamed A. El-Erian
FORTUNE -- Given the rather muted market response to the government shutdown, some Republican lawmakers may be tempted to take the debt ceiling hostage next. That would be a tragedy for America. The damage would be a multiple of anything that MOREOct 3, 2013 9:03 AM ET
Health insurers were ready for the Affordable Care Act and left the Tea Party in the dust.
By Tory Newmyer, writer
FORTUNE -- On the day Congressional Republicans shut down the federal government to protest the rollout of the Affordable Care Act, the health insurers that once bankrolled GOP opposition to the reform law were doing something very different: watching as their stock prices enjoyed healthy bumps that outpaced an across-the-board MOREOct 2, 2013 10:39 AM ET
There will be a compromise on this issue, and after some horse trading the debt ceiling will be raised, yet again. Investors know better this time.
By Cyrus Sanati
FORTUNE -- Wall Street does not seem worried about all the nonsense going on in Washington these days, and rightly so. The recent debates in Congress over the budget and the debt ceiling don't appear to be serious enough to warrant any MORESep 26, 2013 11:23 AM ET
A debt ceiling fight could cool the IPO boom.
FORTUNE -- Twitter is expected to publicly file its IPO registration within the next couple of weeks, meaning that it would list shares at the end of October or the beginning of November. The company's timing couldn't be worse.
The U.S. government is scheduled to shut down on October 1, unless enough House Republicans drop their insistence that Obamacare funding be stripped. And that's MOREDan Primack - Sep 26, 2013 10:35 AM ET
The corporate sector overwhelmingly backed Republicans in the last election, yet they can't seem to get them to back down on their debt limit demands.
By Tory Newmyer, writer
FORTUNE -- As Washington backslides toward yet another man-made fiscal crisis, the group representing the nation's top CEOs is sending a new and suddenly urgent plea to Members of Congress: Fund the government and raise the debt limit, now.
The appeal comes in MORESep 24, 2013 8:42 AM ET
Future Republican presidential candidates need to hold on to the party's conservative base while appealing to moderates.
By Nina Easton
FORTUNE -- Don't be fooled by the fire spewing out of the dragon that was last week's annual CPAC confab. Beneath the barbed infighting and insistence that the GOP needs to double down on its lean to the right, there were important signs that the defeated Republican Party is stumbling toward MOREMar 19, 2013 9:15 AM ET
A little Democratic idealism mixed with some old-fashioned fiscal discipline could be what Republicans need to get Americans back on their side.
By Sheila Bair, contributor
FORTUNE -- Over the past four years income inequality has worsened, particularly among minority groups. Continuing a long-term trend, the gap between rich and poor is the widest it has been in 40 years. Wealth inequality is even more skewed, with the upper classes enjoying MOREDec 19, 2012 5:00 AM ET
Elite money manager Paul Singer is a passionate defender of the 1% and a rising Republican power broker. He's determined to put a candidate who shares his views back in the White House.
By Michelle Celarier, contributor
FORTUNE -- As he gears up for the final stretch in the marathon that is the Republican nomination campaign, Mitt Romney has no shortage of eminent financiers to call on -- for advice or money. MOREMar 26, 2012 5:00 AM ET
The GOP front-runner appears to have forgotten almost all the lessons he learned at Bain Capital.
FORTUNE -- Mitt Romney is straight out of GOP central casting for presidential candidates: a tall, confident family man whose greatest professional accomplishments were in the private sector rather than in government. Too bad he keeps flubbing his lines.
Romney comes from the world of private equity, where investors are expected to develop investment theses -- MOREDan Primack - Feb 13, 2012 5:00 AM ET
|2 million Facebook, Gmail and Twitter passwords stolen in massive hack|
|Fast food worker: Protest didn't cost me pay|
|China's central bank bans some Bitcoin transactions|
|Ron Paul: Bitcoin could 'destroy the dollar'|
|GM to discontinue Chevrolet brand in Europe|