Wednesday, 05 November 2014

GOP Midterm Victories: The GOP's Plan and Path

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Thanks to a groundswell of unhappiness over the economy, healthcare, a porous southern border, and increasing distrust of government in general, Republicans who were swept into office run the risk of thinking that Tuesday’s nearly complete sweep was a vote for them and their policies. As the Wall Street Journal noted, “Many voters said they cast [their] ballots more in opposition to one candidate than [in] support for the other.” New Jersey Governor Chris Christie, chairman of the Republican Governors Association, got it right: “The president took a beating last night!”

Republicans used the president’s increasing unpopularity to connect their opponents’ support for his policies like a millstone, dragging them down to defeat. This marks two mid-term defeats that, according to the Journal, “rank among the worst for any president in modern times,” leaving the Democrats without a majority in either the House or the Senate for the first time since 2006.

Kentucky Republican Senator Mitch McConnell, now in line to replace Harry Reid as Senate Majority leader, earlier issued a wish list that included resolving favorably the stalled Keystone XL pipeline — stalled by the president — as well as holding more hearings on the IRS scandal and the mess at the Veterans Administration. In addition, the Republicans’ tentative wish list, which was floated before Tuesday’s outcome became certain, included reopening the case of Sgt. Bowe Bergdahl (who despite likely abandoning his Army post prior to his capture by terrorists, was exchanged for five Gitmo detainees), examining the Fast and Furious gun-walking scandal initiated by the Department of Justice, and investigating environmental regulations being issued willy-nilly by the Environmental Protection Agency.

Now that Republicans will take control of the Senate, McConnell’s wish list has evaporated, replaced with pleasantries about “compromise” and “coming together” and “finding common ground,” etc. Declared McConnell:

We do have an obligation to work together on the issues where we agree. Just because we have a two-party system doesn’t mean we have to be in perpetual conflict.

That might just turn out to be the mantra of the 114th Congress that will be sworn in come January: go along to get along, major in minors, ignore the big issues, and prepare for battle in 2016.

Limited government advocates in the House will find their influence diminished, despite the larger Republican majority, as it gives Speaker John Boehner more wiggle room when negotiating deals. He can lose the support of the Tea Party caucus and still move ahead with the GOP’s agenda.

That agenda is likely to be shaped by a group that wasn’t elected into office on Tuesday, but which has such influence that its agenda will largely be controlling: the Business Roundtable. Founded in 1972 by the heads of ALCOA Aluminum and General Electric, the roundtable of top executives of America’s largest companies — i.e., AT&T, Xerox, Honeywell International, Dow Chemical, etc. — is, according to investigative journalist David DeGraw,

the most powerful activist organization in the United States. Their leaders regularly lobby members of Congress behind closed doors and often meet privately with the President and his administration.

Any legislation that affects Roundtable members has almost zero possibility of passing without their support….

The Roundtable tells politicians what they want done, and the politicians do it. At times, Roundtable members even write the laws themselves….

The [former] president of the Business Roundtable [was] John J. Castellani … [who] met with [President Obama] … at the White House more than any other person, with the exception of [Roundtable member] Chamber of Commerce CEO Tom Donohue.

That agenda includes enacting a tax overhaul and reworking trade policy or, as current Business Roundtable President John Engler expressed it: “Tax reform, tax reform, tax reform!” Because of high marginal tax rates, large companies have to hire highly paid tax advisors to milk the tax code for every benefit and deduction, with some moving to tax inversions — buying an overseas company and transfering tax liabilities from this country to the overseas one — which the government is dead-set against. If McConnell and the newly minted liberal Republicans in the Senate have their way (along with their newly elected liberal Republican friends in the House), the corporate tax code will be revised to the benefit of the members of the Business Roundtable.

The next item on the agenda for the GOP, thanks to the Business Roundtable, is immigration “reform,” including a path to citizenship for illegals living in the United States. This is an issue the House has refused to address until now, clamoring for putting border security first before amnesty. But, as Tom Eddlem noted in his review in The New American of Tuesday’s elections, that priority might change owing to the ideological makeup of the new House, which appears to be much more willing now to go along with McConnell in the Senate.

In other words, little attention will be paid by freshly reinforced establishment Republicans to the major issues of the day: threats to national sovereignty by international groups, such as the United Nations; an incomprehensibly large national debt whose interest payments continue to eat up larger and larger portions of the national budget; unfunded liabilities under Social Security, Medicare, and Medicaid; and the open-ended and accelerating costs of implementing the president’s signature legislation, the Affordable Care Act.

As Eddlem noted:

Though advocates of less government should find encouragement in the shift in public sentiment … they should also be realistic regarding the extent to which this shift … may translate into [any significant positive] change in Washington.

A graduate of Cornell University and a former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at www.LightFromTheRight.com, primarily on economics and politics.

Related article:

GOP Election Rout, But How Much Will Change?

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