THE BIG IDEA: The U.S. Chamber of Commerce, navigating dramatic cultural change that’s transforming the worlds of politics and business, plans to become less aligned with the Republican Party than it has been for decades.
The largest and most powerful corporate lobbying group in Washington is changing the way it evaluates lawmakers for the first time in 40 years, launching a $250 million capital campaign to remodel its headquarters and even rethinking its approach to regulation.
Several dues-paying companies have balked as the Chamber endorsed fewer and fewer Democrats over the past several election cycles. The GOP’s drift toward protectionism, nativism and isolationism since Donald Trump took over the party in 2016 is also at odds with the Chamber’s longtime support for expanding free trade, growing legal immigration and investing in infrastructure.
The Chamber’s major strategic shift, outlined here for the first time based on a series of exclusive interviews with its leaders, grew out of more than two years of intensive conversations. The deliberations began in earnest shortly after Trump became president but long before the Democratic takeover of the House in the midterms ushered in divided government.
Tom Donahue, the Chamber’s longtime president and chief executive, compares it to making substitutions during a basketball game. “It's very unfortunate that the far right has gone very far right, and the far left has gone very far left. If you think about this, there is a hole in the middle,” he said. “So what we’re doing – and this is critical – is adjusting and responding to the new politics. We're adjusting and responding to the new Congress and the way the administration operates. The people that win in sports and in politics and in business are the people that are not so focused on one approach but are ready to adjust.”
The Democratic establishment soured on the Chamber as the group came to more reliably support GOP candidates. Democrat Evan Bayh even worked for the Chamber for five years after leaving the Senate, for example, but the group spent $1.4 million on television ads against him when he ran unsuccessfully to get his old seat back in 2016.
“It's not just about telling a different story. We have to fundamentally act differently, too,” said Tom Wilson, the chairman of the Chamber’s board of directors and the CEO of Allstate Corp. “We cannot just single-source our politics through one party. We need to be more accessible and more bipartisan than we were. You can decide how much we were, and everyone’s got their own views on that, but we just need to reach across the aisle to more Democrats.”
-- Senior Chamber officials have launched a charm offensive on Capitol Hill, reaching out to freshman Democrats from swing districts whom they perceive as reasonable to set up meetings and highlight areas of common ground.
During the sit-downs with Democratic members, Chamber leaders are explaining how they will change the scorecard this year to incentivize Democrats to work with them. The Chamber has historically relied solely on a handful of key votes, but the polarization of Congress and the rise of party-line voting has skewed the ratings so that it’s hard for Democrats to get good numbers. This year the Chamber is adding two other components. One relates to sponsoring something the business community supports. The other relates to sponsoring bills across party lines, even if the Chamber doesn’t support them.
“If anybody here ever thought of themselves as working for a partisan place, they should stop,” said Suzanne Clark, the senior executive vice president of the Chamber. “Because if we are for free trade, we have to be for whoever wants to work with us on that. … We complained all the time that there was no middle ... and then some people started pushing back and saying well you're not supporting the middle. Everybody keeps worrying about the majority in any one moment, so who is creating the middle?”
Chamber leaders say they hope these changes lead to more Democratic congressional endorsements in 2020 and beyond. “If you're a Democrat and you think, ‘Well, I'm never going to be aligned with the Chamber on 70 to 80 percent of their stuff, so I'm not even going to try,’ that's not their fault,” added Wilson. “The Republican-sponsored legislation was more in line with the Chamber's positions … than the Democratic-sponsored legislation was. It wasn't that everything Democrats did we didn't like, but as a result of that natural inclination, what happened was relationships deteriorated. They deteriorated in little ways, like a day at a time. … We need to change the way we go to market here and the way we build our relationships.”
-- The Chamber’s quarter-billion-dollar capital campaign will retrofit its century-old building. The group’s iconic limestone headquarters, directly across Lafayette Square from the White House and lined with Corinthian columns, will be surrounded with scaffolding by July as part of the renovation. They’re planning to add a roof deck, among other major additions.
Part of the rehab is going retro. They’re pulling back ugly teal carpet to restore herringboned wood floors that have been hidden since the 1980s and restoring some of the grandeur envisioned by architect Cass Gilbert, who also designed the Supreme Court building. The headquarters was constructed from 1922 to 1925.
“This is kind of back to the future. The idea is coming back to our roots,” said Clark. “We do 2,000 events a year, with some 65,000 people. In the last two weeks, 17 finance ministers were here just during the IMF World Bank meetings. You can't do that and then have your building be all teal and ugly.”
-- The Chamber, which has 499 full-time employees, reports a 95 percent renewal rate among member companies that pay $100,000 or more in annual dues. The U.S. Chamber is a federation of local chambers of commerce that operate largely independently. The group does not publish a membership list. But officials said some companies have dropped out in recent years, opting to invest the money in their own Washington operations, but other new businesses have joined.
-- Last year, the Chamber reports taking in $233 million of revenue and ending the year with no debt. Donahue, who is in his early 80s, has led the group since 1997. The year he took over, the Chamber reported $68 million in revenue, $11 million of debt, and 279 employees. Audited revenue numbers provided by the group for the past 15 years show that annual revenue has fluctuated in a band between $202 million and $270 million over the past decade.
“I've now been here 22 years, and we have gone through stages, like any company or any organization,” Donahue said. “In the beginning, it was trying to stabilize the organization that had gone through some challenges. Then we went through a period where we began vigorous growth. Now we're going into the next period where we’re looking to the future. … Unfortunately, we don't win all of the time. But we sure as hell win most of the time. … And we've got to put money together to assure ourselves of having the reserves for when the economy slows, which it does from time to time.”
-- Part of the shift stems from the reality that advancing the Chamber’s biggest priorities will require forging bipartisan coalitions to get 60 votes in the Senate. “There could be some realignment going on with the parties. That's something we're obviously watching. But with respect to trade, immigration and infrastructure, those are policies that you're never going to advance unless you have buy-in from both parties,” said Neil Bradley, the U.S. Chamber’s chief policy officer.
“On big complicated issues, you're not going to get there with a single-party solution,” said Bradley, a former House GOP leadership aide who held senior jobs under Kevin McCarthy, Eric Cantor, Roy Blunt and Tom Coburn during two decades on the Hill. “One of the things we've been talking to members of Congress about is that durable policy has a long tradition of being bipartisan. Policies and laws that were enacted with bipartisan support have a tendency to be a lot more durable than something that passed along party lines. That's true whether it's the Affordable Care Act, which is something we oppose, or the tax bill. We like that policy, but there’s no question it's more susceptible to attack because it was enacted without buy-in from both parties.”
-- Companies crave consistency and certainty from Washington, but they’ve been getting the opposite. “It used to be when presidential control floated back and forth, there was a handful of policies that would go back and forth with the change,” said Bradley. “So the business community actually had a fair amount of predictability. ... Now we’re entering a dynamic where you may have huge swings in regulatory policy, for example, based on which party has the White House. Part of that is because we can't get Congress to function and the parties to come together. Then so much is being left to administrations. That's something that, increasingly, the business community is looking at and saying, 'Listen, we need predictable rules of the road. We can't go through massive swings back and forth every four years.’”
The Chamber sees technology policy as the best example of where corporations need rules of the road, and its lobbyists can help write them. Members of the federation increasingly prefer national regulations on data privacy, for instance, to preempt a patchwork from the states. “Because Congress isn't providing them, we have states providing them in often contradictory ways,” said Bradley. “Compare California to Washington, Illinois and other states. When Congress couldn't figure out the rules of the road for regulating Internet broadband and net neutrality, one FCC did it under Barack Obama and the next FCC undid it under Trump. You end up in this situation where you don't get predictability.”
-- Wilson, the chairman of the board, likens the Chamber to Tiger Woods, who won his fifth green jacket at the Masters this month at age 43. “You know how when you meet somebody at some point in their life and you kind of always know them that way? It's kind of hard to change your view,” he said. “Everybody used to say: Who is the new Tiger? Then we figured out that the new Tiger is the old Tiger. That's sort of like what the Chamber is. The business community needs somebody on its behalf in Washington to represent us. ... If the new Tiger is the old Tiger, the new Chamber is the old Chamber. We just have to get people to recognize that we're different. Everybody changes over time, and we just want people to see it, that we're not who they thought we were … and to see us for who we are in toto.”
He said business leaders need to be more thoughtful about how they can keep up with the rise of technologies like artificial intelligence, which will disrupt even the service industry. “Businesses need to take this role seriously because a guaranteed minimum income is not the answer,” said Wilson. “We need to take seriously our responsibility to create more jobs. To make sure we have a contemporary model.”
-- Corporate cultures are also changing as employees become more engaged with social activism, something the Chamber is trying to be responsive to. CEOs are now expected to weigh in on issues they would have never touched a few years ago.
“You're hearing more and more stories, particularly on the West Coast, of corporate employees calling out a company PAC for supporting a member of Congress because that member of Congress is doing something really important for the country or for the company on X, Y, Z issue. But the employees don't like their social stance on something,” said Clark. “So I do think it's making government affairs harder. I had a person say to me, 'But it's my job to get this done. I have to get this singular thing done.' … We're lucky in a way because we get to be the beneficiary of that. More people turn to us to speak for them or to talk to them or to create cover."
-- The Koch political network, perhaps the biggest benefactor of the GOP takeover of the House in 2010 and the Senate in 2014, has similarly distanced itself from the Republican Party during the Trump era, even as officials use their relationships to score wins. For their part, Koch-backed groups are mobilizing to fight the Chamber’s proposal to raise the gas tax to fund infrastructure.
-- To be sure, the Chamber still has many areas of common ground with Trump and congressional Republicans. They’re very happy with the president’s judicial nominees and the tax cuts, and officials have good relationships with many people inside the administration.
-- And they’re still looking to work with Trump even on areas where they’re not really in agreement, such as immigration. The Chamber advocates for protecting the “dreamers” from deportation and expanding rates of legal immigration. “The fundamental issue is that the United States of America is out of people,” said Donahue. “We have the lowest unemployment we've had in 65 years. We have brought more people back into the workforce and still have the lowest unemployment.”
I asked Donahue whether the perception that the Chamber is tied to the GOP has made it harder to build coalitions and work with Democrats. “Of course it has,” he replied.
But he quickly added that the problem is bigger than partisanship.“One of the things that made this more difficult is all the rules,” Donahue explained. “The House, the Senate and the White House all have 300 to 400 pages of rules of how people can have lunch together, who can run a party, whether you can eat with a fork or a toothpick. ... It has made it more difficult. It used to be that you go fight up on the Hill ... and then, at 8 o'clock, everybody finishes and somebody would say, ‘Let's go get a hamburger and a beer.’ We don't do that anymore!
“I really don't know very many people in Washington that you could buy for a hamburger and a beer,” he continued. “We miss the camaraderie and the ability to do that sort of thing, and ... I think it would be better if we had a little more flexibility here – if we treated people a little more like they're honest brokers and they're honest representatives and they're not out to try to lie, cheat and steal. I think better of the members of the Congress. … It's just really silly.”
BY JAMES HOHMANN with Joanie Greve and Mariana Alfaro