Business groups and corporate interests are quietly weighing whether they should invest their lobbying capital to urge Senate Republicans to end the standoff with Democrats and pass an increase or suspension of the debt limit.
The discussions come as the U.S. Chamber of Commerce — an obvious group to take the lead on such an effort — finds itself on the outs with key congressional Republicans.
Senate Majority Leader Charles E. Schumer plans to try Wednesday to limit debate on a House-passed measure to suspend the debt ceiling, an effort that would require at least 10 GOP votes. Senate Republicans have said Democrats will have to go it alone on raising or suspending the debt limit, and they have the backing of conservative groups.
Treasury Secretary Janet L. Yellen says breaching the debt limit, which could happen as soon as Oct. 18, would have disastrous economic consequences since the U.S. wouldn’t be able to pay all its bills on time.
“I don’t believe Republicans will be irresponsible enough to stand in the way,” President Joe Biden told reporters Tuesday in Michigan, where he pitched his economic agenda.
That’s a scenario most companies see as catastrophic, lobbyists said, but not one unique to any one company or industry. And K Street tends to focus its influence on matters that affect particular clients, such as lobbying for the infrastructure package that already passed the Senate with bipartisan support or lobbying against Biden’s proposed multitrillion-dollar reconciliation package and higher corporate tax rates to pay for part of it.
The debt ceiling fight has also become a partisan battleground, and companies and trade groups do not want to be seen as picking a side, even as numerous organizations have said that default shouldn’t be an option.
Encouragement, no action
“I do have clients and knowledge of efforts being made to encourage people to get out there and push folks on the Hill to resolve this amicably and in a bipartisan, efficient manner. I don’t have anybody that is actually actively getting engaged,” said lobbyist Ivan Zapien, a partner at Hogan Lovells.
Zapien, a former Democratic chief of staff in the Senate and House, added that it’s not just the debt ceiling that is rattling business interests. There’s also the uncertainty surrounding the infrastructure measure: Biden reaffirmed last week that it is tied to passage of the broader reconciliation effort, which would expand social programs and raise taxes.
“Until you see a path, people are rattled,” Zapien said. “Everyone’s on their last nerve right now.”
Republicans have argued that Democrats should deal with the debt limit through the reconciliation process, which requires only a simple majority in the Senate. Schumer has said that is a time-consuming process and could not be completed before the debt limit is hit. Some Senate Republicans said Tuesday they might be open to removing some of those speed bumps, but Democrats did not seem interested.
“We’re not doing it on reconciliation,” Virginia Sen. Tim Kaine, said after his party’s policy lunch Tuesday.
The conservative group Heritage Action for America agreed with Senate Republicans.
“Democrats should just raise it on their own,” said Garrett Bess, the group’s vice president. “At this point in time, we’re urging Republicans to not go along with Democrats’ spending spree and would encourage conservatives to vote against the debt limit without reforms.”
‘Cannot get worse’
Lobbyist Sam Geduldig, a Republican, said individual companies aren’t investing much in lobbying on the debt ceiling because the economic consequences of breaching the limit would be global and not specific to any one company. Fighting those kinds of outcomes is usually a role for big business organizations, such as the Chamber of Commerce.
But the relationship between the chamber and Republicans is “as bad as it could ever be,” according to Geduldig.
“It cannot get worse,” he said. “For 20 years, the narrative has been that Wall Street and the business community has been in lockstep with Republicans and that it’s this very healthy relationship. And for a period of time that was true. … But it’s not been true since at least the entire Trump presidency, and it’s trending worse.”
That rift came into public display last week as the chamber ramped up a last-minute effort to press the House to pass the infrastructure bill that had already passed the Senate with bipartisan support, even if the House could not reach a deal on the broader reconciliation package. The chamber criticized House Republicans who said they wouldn’t vote for the infrastructure bill because congressional Democrats had linked it to the reconciliation package, leading House Minority Leader Kevin McCarthy to question whether the “chamber’s an ally.”
McCarthy referred to the chamber’s 2020 endorsement of a slate of House Democrats, many of whom lost. That came after the business group said in 2019 that it would factor in bipartisanship and a lawmaker’s ability to govern when determining its political endorsements.
Both the chamber and the Business Roundtable have urged lawmakers to deal with the debt ceiling, but they have not leaned on one party or the other or specified a particular preferred strategy.
“The United States of America defaulting on its obligations is not an option; we are counting on Congress to take the necessary steps to address the debt limit,” a chamber spokesman said in an email.
Joshua Bolten, the president of the Business Roundtable and a former White House chief of staff under President George W. Bush, told reporters last week that his group’s position is that Congress needs to move swiftly.
“It’s unacceptable to risk a default and however they need to get it done is what we’ll support,” he said, according to transcripts provided by the roundtable. “From our standpoint, it’s not any more complicated than that. Just get it done.”
Lindsey McPherson contributed to this report.