How the Tea Party May Hurt Business

Washington Matters

How the Tea Party May Hurt Business

They are working for a common goal now, but their interests will likely diverge after Nov. 3.

Big business and the Tea Party movement both have their shoulders to the wheel, pushing in the same direction for the same goal: the election of a lot more Republicans to the next Congress. Both groups are highly critical of President Obama and the Democratic leaders in Congress. They share strong opposition to government regulation, the health care law and any climate change legislation.

But scratch beneath the surface and the differences between the long-term interests of the Tea Party and business leaders quickly emerge. The truth is, most in the loosely defined Tea Party have no love for big business -- they just happen to dislike Obama and the Democrats more. And most in the business community opposed Tea Party candidates in the GOP primaries. The U.S. Chamber of Commerce, for example, backed GOP establishment candidates in Kentucky, Colorado and Alaska, and came to the support of Tea Party candidates who won only because defeating Democrats was a higher priority.

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But opposition to Democrats won’t keep the two groups together after the election. Consider that the Tea Party hated the 2008 bank bailout and the 2009 stimulus plan. Big business supported both as necessary to bring the economy back from the brink. While there are hundreds of Tea Party groups with somewhat different agendas, they share a desire to seal the borders and eliminate special-interest spending and targeted tax breaks. Businesses, especially those with multinational operations, want access to immigrant labor, favored tax treatment for overseas earnings and spending on programs that can help companies. Business also wants education reform, while most Tea Partyers want the federal government to leave education in the hands of local officials.

Tea Party activists tend to take a more doctrinaire ideological position, while business is more pragmatic. Tea Party sympathizers oppose government in most forms; some even want to abolish the Federal Reserve, eliminate entire government agencies and generally force the federal government into a less intrusive role. Business, on the other hand, wants limited government, but it prefers and needs some help from Washington. Small businesses want the Small Business Administration to do more, not less. Tech firms want incentives like the research and development tax credit, and there are business constituencies for a range of other tax breaks targeted by the Tea Party -- ranging from subsidies to help the timber industry to protections for NASCAR racing.


Once the election is over, the clashes will become evident: Business thinks a major transportation and infrastructure bill is important, while Tea Partyers are likely to regard it as unaffordable. Trade will be a sticking point, with businesses wanting more open markets and many Tea Party activists pushing protectionist agendas. And the scheduled rewrite of the farm bill will pit agricultural interests against deficit hawks determined to make major cutbacks.

These conflicts don’t matter much today, not with Republicans in the minority and all efforts going into the election. But come Nov. 3, GOP leaders will have their hands full trying to chart a path through these two interests, both of whom will be crucial to the future of Republican gains.