By Allan Smith
Republicans and corporate America are on the outs.
In the past week alone, American Airlines and computer company Dell came out strongly against GOP-led bills that place restrictions on voting in their home base of Texas. South Dakota Gov. Kristi Noem, a rising star in Republican Party, continued to take heat for nixing a bill that would have imposed a ban on transgender athletes in sports, citing the potential impact on her state’s bottom line. And conservatives spent days bashing “vaccine passports” some businesses think are needed to return to normal.
And then there was Georgia, where the Republican-controlled state House narrowly voted to end a tax break worth millions that Delta enjoys on jet fuel after the airline’s CEO — along with the CEO of Coca-Cola, another major Atlanta-based business — condemned new voting restrictions in the state. (The GOP-led state Senate did not take up the measure.) On Friday, Major League Baseball pulled this year’s All-Star Game out of Atlanta in protest of that same law.
Republicans were outraged.
“Boycott baseball and all of the woke companies that are interfering with Free and Fair Elections,” former President Donald Trump said in a statement. “Are you listening Coke, Delta, and all!”
“Why are we still listening to these woke corporate hypocrites on taxes, regulations & anti-trust?” Sen. Marco Rubio, R-Fla., tweeted.
Such public dust-ups between businesses and members of the GOP are becoming more frequent, though the divide — possibly one of the most consequential in U.S. politics and society — is years in the making. The shift is the product of a Republican Party increasingly driven by “culture war” issues that animate a base invigorated by Trump and corporate powerhouses that are under more pressure than ever to align themselves with the left on voting rights, LGBTQ rights and anti-racist efforts.
The result is a fraying in relations between a GOP that has for years advocated for the kinds of libertarian economic policies that have widely benefited these businesses and companies that are using their might to help advance racial and social justice causes.
“We have long thought and still think of the big institutional drivers of this culture war as more in academia, the arts, the media, and corporate America has mostly sat it out until recently,” retiring Sen. Pat Toomey, R-Pa., told NBC News in an interview. He added that while he does not think of corporate America “as the biggest player yet,” companies coming off the sidelines “can change the dynamic.”
This year has seen flashpoint after flashpoint. Weeks’ worth of conservative outrage about the “cancellation” of Mr. Potato Head and Dr. Seuss were not about policies instituted by the government, but decisions made by toymaker Hasbro and the famed children’s author’s own company to address inclusion and racism, respectively. February’s Conservative Political Action Conference — long a bastion of economic libertarianism — featured a panel decrying “The Awokening of Corporate America.”
“Part of this is a development that has been going on for probably 10 or 15 years,” David McIntosh, president of the Club for Growth, said. “The old Reagan coalition — which included the Chamber of Commerce representing big and small businesses — since the tea party movement has really kind of been frayed.”
The trend has intensified as the GOP absorbs more white working-class voters and as the Democratic Party is finding new success with well-to-do suburbanites.
These shifts were “exacerbated” under Trump, one Republican lobbyist said, with the party going “more towards this culture war stuff that amps up our voters and gets them really excited.”
“Talking about corporate tax cuts and reducing burdensome regulations doesn’t do it for our new voters,” this person said. “I guess it’s not that exciting. It might be exciting for those country club Republicans we lost, but we’re losing them.”
What it means for policy is less clear, however, even as some Republicans embrace some leftward policies like an increase in the minimum wage. Under Trump, Republicans implemented a tax cut that saw much of its benefits go toward some of these same corporations conservatives now decry for their social activism. Few Republicans are turning away from the traditional agenda of lower taxes and deregulation — though some prominent Republicans like Sen. Josh Hawley, R-Mo., and Rubio have sought to position themselves as corporate antagonists.
Toomey said he’s seen the “rise in economic populism among some Republicans,” with the possibility of more “anti-corporate momentum” should corporations decide “to become part of the left-wing social movement.”
The Pennsylvania Republican said that could lead to GOP legislators proposing restrictions on stock buybacks, raising taxes on dividends or even a more intense effort at breaking up large companies. Already, one of the right’s biggest rallying cries is opposition to U.S. tech giants for de-platforming prominent conservatives, even as conservative content continues to dominate on platforms like Facebook.
Toomey, a former president of the Club for Growth, is not on board with such moves.
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“I’m still going to fight for the right economic policy, right? I’m not going to say, ‘Well, let’s punish them for their bad behavior,’ because unfortunately punishment is inflicted on the American people and our economy,” he said. “So I’m not going to be part of that.”
But Toomey, along with stalwart economic libertarians like Sens. Rob Portman, R-Ohio; Roy Blunt, R-Mo.; and Richard Burr, R-N.C., are headed for the exit at the end of their current term. Should their successors be Republicans, they may be more aligned with Trump’s brand of politics.
A major test will be how Republicans handle President Joe Biden’s planned tax increase. Among those proposals floated by the White House is an increase in the corporate tax rate from 21 percent to 28 percent — which is lower than the 35 percent rate Trump inherited.
Rep. Jim Banks, R-Ind., suggested while Republicans are unlikely to vote for tax increases regardless, they may not make much fuss over raising the corporate rate.
“I can tell you that I’m going to fight like hell to make sure that this administration doesn’t take away the tax cuts that we passed for the individual rates, for working families,” he said. “That’s what I’m focused on.”
One of the biggest fractures in the relationship this year came in the aftermath of the deadly Capitol riot on Jan. 6. Many corporations announced they would no longer make donations to those in Congress who objected to the counting of certified results in certain states Biden won. Some said they would stop making political donations through corporate political action committees altogether.
That hasn’t proven to be such a negative for Republicans so far. Hawley, for example, has seen his fundraising soar in the first quarter of this year as he finds himself on what amounts to a “do-not-fly list” for some corporate PACs.
Banks, who objected to the Electoral College count, said local news stories mentioning that he’s been cut off from corporate donations have been among the “best” he’s ever received in his home district.
“I couldn’t pay for a better story,” he said.
Some feel it’s an inevitability companies will walk back those pledges. The Republican lobbyist said he was “100 percent” sure that would be the case.
“There’s 435 members of Congress,” this person said. “To write off 147 of them, that’s a tough way to win an issue.”
Judd Legum, a progressive journalist who has tracked the corporate donation habits following the pledges, said he’s not so sure.
“The world is changing,” he said. “There’s more conscious consumers and consumers are more conscious about how they’re spending their money.”
Paul Washington, who runs the Environmental, Social and Governance Center of The Conference Board, which conducts research on behalf of its business members, said the “expectations now are just different for companies than they were in the past,” and his group’s members don’t see the political and social trends they face reversing anytime soon.
Ultimately, McIntosh thinks corporate America will have “to really take a close look at what is in their self-interest.”
“Are they better off being with a party that maybe speaks to their social agenda?” he said. “Or are they better off with a party that looks out for their economic interests?”