Editor's note: This piece from the February 6, 1995 issue of Fortune details the rise of Newt Gingrich at a time when he had just managed to unite Republicans in seizing control of the House of Representatives. CEOs surveyed by Fortune saw Gingrich's party not just as anti-big government, but anti-big business, and feared the consequences of its newfound power. Writer Rik Kirkland, later a Managing Editor of Fortune, detected an ideological split among Republicans even then, one that perhaps sowed the seeds for the Tea Party movement more than a decade later.
When Dick Cheney kicked off his New Year by deciding not to make a run for the White House in 1996, business executives lost their favorite candidate for President. But corporate America has a much bigger problem than that: it's losing its party.
Don't laugh. Despite elation in most corner offices at the prospect that a Republican majority on Capitol Hill may finally deliver on promises to cut spending, remake the tax code, and roll back noxious regulations, the links between the corporate community and the GOP are weaker and more strained than at any time in memory. Business's influence began giving way to ideology, of course, with the ascent of that wrinkly antiestablishmentarian Ronald Reagan, though it rebounded somewhat during the Bush interregnum. But today, if the Republican National Committee published a tabloid newspaper, the headline heralding the dawn of the Newt Gingrich era might well blare: GOP TO BIG BUSINESS: DROP DEAD.
"A lot of the newer Republicans in Congress simply don't like big business," says Richard Rahn, former chief economist of the U.S. Chamber of Commerce. Indeed, party chairman Haley Barbour went out of his way to deliver that message, albeit more politely, in the wake of the GOP's November 8 triumph, observing "ours is the party of small business, not big business; of Main Street, not Wall Street."
In particular, the new GOP draws its strength from the neighborhoods on Main Street populated by religious conservatives (mainly born-again Christians as opposed to, say, mainline Protestants and Catholics with a small-government bent) and by conservative-cause groups, such as the National Rifle Association. Their common ideological ground: an intense dislike, even hatred, for meddlesome big government and all its minions. Their common purpose since the early 1980s: to support an insurgent generation of younger Republicans--concentrated initially in the House and led by Newt Gingrich and his comrades--who were willing, unlike Nixon- or Ford-era Republicans, to wage all-out warfare on the welfare state.
A few vital statistics on the 73 freshman Republican members in the 104th Congress suggest how fully their effort has borne fruit. Of this group, many of whom own small businesses, fully 44 won office with strong support from the Christian conservative movement. Nearly 60 take a strict pro-life position on abortion, and most hew to the NRA's anti-gun-control line.
As for their antipathy toward corporate America, don't mistake these suburban and small-town populists for their late 19th-century forebears, those Western and Southern sons of toil who backed William Jennings Bryan's crusade against urban plutocrats crucifying middle-class America upon the cross of the gold standard. Most of the current GOP partisans don't actively hate, much less fear, big business. They just feel contempt for it.
Their contempt rises mostly from the belief that in the economic policy battles important to them, corporate executives have generally proven to be summer soldiers: timid, eager to cut self-serving deals with the Democratic opposition--in short, just too damn moderate. "We call them prags," says Dick Armey, 54, the smart, chain-smoking, Ph.D.-toting, cowboy-boot-wearing Texan who's now majority leader in the House. "These big-business guys love peace more than freedom. And unlike entrepreneurs, they can buy that peace with someone else's money--their stockholders' money. If anybody's been carrying their water in Washington, it's been the Democrats."
An oft-cited example illustrating Armey's lament is the backing the Big Three automakers gave Bill Clinton's despised health care plan, a provision of which generously proffered taxpayers' money to pick up the medical bills of Detroit's early retirees. Oft-cited Example Two: the U.S. Chamber of Commerce's decision to sit out the fight against Clinton's 1993 tax increases, a desertion that later sparked a fierce public tongue-lashing of Chamber officials from Armey's fellow Texan Tom DeLay, the new Republican House whip.
Beyond ideological timidity looms an even bigger problem. Call it a culture gap. This is a party that now self-consciously twitches to the taunts of Rush Limbaugh (honorary Republican member of the 104th Congress) and throbs to the all-too-real frustrations of angry white males and families from the have-less half of the middle class. Thus, business executives are increasingly seen as just another bunch of out-of-touch elitists. "There's a real cultural disconnect between the Fortune 500 and social conservatives," says Gary Bauer, 48, who runs the Family Research Council, a lobbying outfit with strong ties to Christian fundamentalist groups and the new Republicans. "It mirrors the split in the GOP between country- club Republicans and those of us whom they see as the great unwashed."
This split doesn't matter so much as long as the GOP is singing from the choir book of economic conservatives, who want to concentrate the party's political capital on revamping America's economy and not expend much of it on the messy business of reforming America's character. And that's what the Republican majority in Congress will do for at least its first 100 days by sticking to Gingrich's Contract with America. Though the contract ventures a little ways into social-issue territory-- mainly the relatively easy terrain of getting tough on criminals and welfare mothers--it avoids the thornier ground of, say, imposing strict limits on abortion or conducting a frontal assault on the gay rights movement.
But eventually social conservatives, whose support is required to push through much of the GOP's economic agenda, will insist on sounding a call to arms to wage what Pat Buchanan and others have labeled the "culture war." And in this struggle, they complain, big business has so far been either missing in action--or on the wrong side. Oft-cited case in point: a study by the Capital Research Center, a conservative policy group, which found that in 1992 major corporations gave $3.42 in donations to "left" or "liberal" charities--Planned Parenthood, the National Organization for Women (NOW), the Mexican American Legal Defense and Educational Fund, and the like--for every dollar given to nonprofits on the right side of the war.
Corporate human resource departments also draw heavy fire from the new powers in the GOP. "A lot of the leftist effort to redefine what a family is by extending benefits to same-sex partners or to advance the multicultural agenda with its insistence on quotas of all sorts is actively being embraced by large companies," says Bauer, who served as a policy chief in the Reagan White House. "I'd love to talk to the captains of industry about this. But though the average Fortune 500 CEO and I probably have far more in common in terms of our economic beliefs than he does with, say, the president of the NOW, my guess is he perceives me as much more controversial. Business is just going to have to learn who its natural allies are in this long battle we're engaged in."
True, none of this means big business can't or won't do business with the new GOP. It should, however, expect to pay for that privilege. Many Republicans are acutely aware that in past elections, some two-thirds of corporate political action committee dollars have flowed to Democrats, primarily to curry favor with powerful committee chairmen. "The Gingrich generation of activists have received comparatively little support from big business or its PACs over the years," says Republican consultant and former Nixon speechwriter Dick Whalen. "If anything, they were often fighting uphill against that money, which reinforces the lack of political loyalty or allegiance they feel toward those guys."
Now that their guys are on top, all Dan Leonard, communications director at the Republican National Campaign Committee, will allow is the oh-so-polite expectation that corporate PAC preferences "will change now that Republicans are in the majority." Privately, other party loyalists suggest extracting penance from these pinstriped apostates. Says one: "Since money after an election is only worth half what it is before the vote, the corporate crowd should expect to pony up twice as much."
By contrast, the GOP's new influentials have consistently devoted troops and treasure to the party's cause. During the last election cycle, the National Federation of Independent Business, the largest small-business lobby, spent almost all its $700,000 war chest backing more than 150 pro-business Republican congressional candidates. (In the spirit of bipartisanship the NFIB also managed to find some two dozen Democrats, mostly in the South and West, worthy of its support.) NFIB members, often prominent citizens in their communities, spoke at rallies and helped get out the vote. That kind of effort, going back over a decade, has made the NFIB "the business group Newt Gingrich and Dick Armey turn to first," says Ralph Reed, 33, executive director of the Christian Coalition.
Though His Baby Face and size-38 Jos. A. Bank suits belie his size-50 political clout, Reed himself runs the most influential outfit within the most critical segment of the new GOP's electoral base: religious conservatives. Many mistakenly believed the religious right had peaked as a political force after televangelist Pat Robertson's bid for the presidency failed in 1988 and the Reverend Jerry Falwell folded the camp chairs of his Moral Majority. The movement's revival owes much to three decisions Robertson made in launching the Christian Coalition in 1989: hiring, in Reed, a very able general; stressing issues, not personalities (plenty of religious conservatives don't much care for Robertson himself); and ignoring Washington to focus on grassroots politics.
With 1.8 million members and a $20-million-a-year budget, the coalition today combines lobbying muscle--it played a major role in defeating the Clinton health plan--with a stunning ability to cultivate and harvest voters at election time, mainly by distributing some 60 million voter guides and congressional scorecards through 65,000 churches. "No company in America, no 100 companies, have the political power they've got now," marvels Grover Norquist, 38, the hyperactive head of Americans for Tax Reform, another of the new crop of grassroots groups closely allied with the GOP. "Ask any Congressman whom he'd rather have mad at him--Ralph Reed or General Motors. Not one, even among the entire Michigan delegation, would pick Reed."
The final insult of this power realignment is simply this: what serious presidential candidate can afford to care anymore whether he wins the undying affection of corporate America? In the cruel calculation offered by pollster Frank Luntz, 32, a senior adviser to Gingrich and the House Republican leadership, "that's worth a few contributions and about half of 1% of the vote in the Iowa caucus, maybe less." The action, veteran GOP consultant Ed Rollins agrees, is now with the religious conservatives. "A campaign needs activists willing to work in the trenches," he says, "and moderate Republicans mostly want to write a check or maybe host a fundraiser. Give me a choice between someone offering to hold a fundraiser and a preacher with a churchful of 1,000 activists, and I'll take the preacher anytime."
Are Top Executives aware of these tensions and their diminished status in the political pecking order? Somewhat. Are they eager to talk about them publicly? Are you kidding? Happily, a poll conducted exclusively for Fortune by the opinion research firm of Clark Martire & Bartolomeo sheds fascinating light on some of the problems that may lie ahead for business and the GOP. The survey, taken in December, drew responses from 204 chief executives of America's largest corporations, the Fortune 500 and Service 500. Of this group, 69% identified themselves as Republicans, 19% were independents, and just 12% were Democrats.
Above all, their answers confirm that CEOs sit squarely in the amen corner of those espousing an economics-only conservatism. Asked to rank their legislative priorities for the new Congress, just 4% of executives rated passing a constitutional amendment to allow voluntary school prayer as highly important, even though 41% described religion as "very important" in their lives, and 48% agreed it was "somewhat important." By contrast, a whopping 98% said Congress should make cutting or slowing the growth of federal spending a top priority. In addition, 82% gave a high score to reducing government regulation, and 78% thought it critical to pass a tort reform bill.
Follow-up interviews with a small number of Republican CEOs willing to speak on the record confirmed corporate America's strong desire to steer clear of the social-issue arena. "These go-nowhere issues, where one person tries to make his moral views the law of the land, are killers," says Harry Conger, chief executive of Homestake Mining. "The people pushing them on either side are literally killing each other, and it's not helping the country a bit." Nor will it help the GOP, argues Jack Rehm, chief executive of Meredith Corp. "The social issues are no-win, divisive, and could do grave damage to the party if it pursues them," he says. "That whole agenda should be at the bottom of our priorities."
Looking ahead, business leaders also express considerable anxiety about the growing clout of the Christian conservative movement within the GOP. Some 22% said they were "very concerned" about the religious right's influence in setting the party's future agenda, and fully two-thirds professed themselves "somewhat concerned." Indeed, on the litmus-test issue of abortion--the last four Republican party platforms and a majority of GOP primary voters favor imposing stringent restrictions--59% of CEOs were adamantly pro-choice, agreeing with the statement that "a woman should be able to get an abortion if she wants one, no matter what the reason."
Most striking--and revealing--are the preferences of Republican CEOs in the 1996 presidential sweepstakes. Standing balding head and shoulders above the rest, with support from 58% of executives: Dick Cheney, best known to most Americans for his calm, decisive leadership as Secretary of Defense during the Gulf war. The only contender even close is Cheney's comrade in arms in the victory over Saddam Hussein, General Colin Powell, whom 36% of CEOs identified as among their top choices.
Why did corporate types love Cheney, who dropped out of the race just after our survey was taken? Simple. Like Powell, he's unflappable, decisive, sober, understated, smart, reasonable, reassuring--"a real leader with good judgment and inner fortitude," as Meredith's Jack Rehm notes. In other words, he reminds CEOs of themselves--or at least their ideal selves. (Except he got to fight and win a real war.) As with Powell, few executives knew much about Cheney's policy stands. The main thing is, as Quaker State CEO Herb Baum puts it, he seemed "a sane, practical Republican."
Might this imply that the rest of the Republican field strike many business folk as -- what? Fire-breathing ideologues? Perhaps less practical anyway. In Fortune's poll, Senate rivals Bob Dole and Phil Gramm drew nods from just 17% of the executives. And right down at the bottom of the pack with a 3% show of support, outpacing only former Vice President Dan Quayle and zillion-to-one long-shot Senator Arlen Specter of Pennsylvania: the new Speaker of the House, Newt Gingrich.
Conservative theorist Irving Kristol has likened this influx of activist newcomers into the GOP to the great surge of European immigrants into the Democratic party between 1870 and 1914, a migration that transformed the party and turned Democrats into the country's dominant political force. Religious conservatives, Kristol presciently opined in 1993, "are going to be the very core of an emerging American conservatism."
Religious conservatives hold veto power over the Republican presidential nomination in 1996. Pretty much. They can't unilaterally impose a candidate on the party--or ensure the victory of any truly controversial character the like of Ollie North. On the other hand, as John Green, a political scientist and expert on the movement, puts it, "nobody will get the Republican nomination in 1996 who provokes the active hostility of evangelical Protestants."
Confirmation of that reality: the care all serious potential candidates now take to avoid offending religious conservatives. In 1992, for example, Massachusetts Governor Bill Weld led the forces fighting against the party's rigid pro-life stance at its Houston convention. But last spring Weld declined a reporter's invitation to affirm his intention to repeat that effort, noting, "I want to be in the same party as Pat Robertson. They're very nice people."
The exception, Arlen Specter, merely proves that the religious right rules. "If Pat Robertson, Pat Buchanan, and the social- issue extremists dominate the party and the convention again in 1996, we'll give Bill Clinton his best chance to win," Specter told Fortune. "I'm sure the American business community is scared to death of having Republicans misread the meaning of the elections, get sidetracked into pursuing a radical social agenda, and blowing our best chance to cut taxes and spending." He's right. They are. But not a single CEO in Fortune's poll expressed an interest in his candidacy.
Since Republican populists, unlike the Democratic variety, aren't actively hostile toward corporations, it doesn't really matter if they feel estranged from big business. False. For one thing, it means that when the party bakes a tax-cut cake, corporate views count for little at mixing time. Why is the centerpiece of the new GOP tax program a $500-per-child tax credit with a $107 billion pricetag over five years (almost twice the cost of cutting capital gains taxes), a measure that virtually all economists agree does nothing to stimulate capital formation or growth and that only 19% of CEOs in Fortune's poll rated as important? "It's a result of our movement," says Ralph Reed. "Before, the GOP had only talked about supply-side tax cuts and cutting capital gains. But we said we want this. Higher taxes have been tearing at the fabric of the American family, and you can't just focus on economic arguments and ignore family values." Ways and Means Chairman Bill Archer has already indicated that if it gets tough to find money to pay for all the contract's tax cuts, one of the first things that he'll scale back are proposals to ease depreciation schedules on business investment.
The same holds for the spending side. If you're a flinty free-marketeer like investment banker and former Treasury Secretary William Simon, you're so ecstatic over the real prospects for truly significant cuts that you don't fret over much about where the GOP swings its budget broadax. But if, like many Americans, you support the principle of balancing the budget but would just like to preserve a few special programs that matter to you, then you care plenty who's tightest with Gingrich, Armey, House budget hawk John Kasich, or Senate grandees like Phil Gramm and Mississippi's Trent Lott, the new majority whip.
True, a few large companies on the fringe of corporate America--the tobacco industry, Amway--enjoy the status of bigtime contributors. For the most part, though, the folks at the head of the lobbying queue these days have zero interest in preserving programs they consider "corporate welfare." Says John Motley, vice president for federal government relations at the NFIB: "We don't like the idea of industrial policy and don't believe large companies should be looking to the government to help them export." Ralph Reed goes even further, declaring that "whether it's the Chrysler bailout or John Sculley flying in on his jet to meet the President, the era of handwringing CEOs swooping into Washington to seek special breaks is a fixture of a bygone era."
Many executives and managers hold distorted and inaccurate views of who religious conservatives really are. Undoubtedly. In 1993 a Washington Post article described the believers of the religious right as "largely poor, uneducated, and easy to command," a less incendiary echo of H.L. Mencken's dispatches from the Scopes trial, which depicted evangelicals and fundamentalists as "rustic ignoramuses," "anthropoid rabble," and "gaping primates of the upland valleys."
In fact, 7% of evangelicals now perch in the $75,000-a-year-and-up income bracket, and 6% hold advanced degrees, vs. 10% and 8%, respectively, in the general population. That's according to the most comprehensive recent survey of white evangelical Protestants, a 1992 study conducted by professor John Green and colleagues at the University of Akron. In reality, most religious conservatives are reasonably well educated and solidly middle class. Says former Congressman and Gingrich ally Vin Weber: "Corporate executives might begin to take a different view of the religious right if they would realize that many of these people are their employees, customers, and shareholders."
People like Bob Reese, 42, an affable aeronautical engineer, a devout Christian ("nondenominational fundamentalist"), and vice president of Flowdata, a private manufacturer of metering devices that was recently voted one of the top 50 growth businesses in Dallas. Reese, his wife, Connie, and their eight children live on a 160-acre ranch near Tyler. That's 75 miles away from his office in a north Dallas industrial park, but also far removed from the materialism and "peer pressure" of the suburbs. "I'd like to teach my kids to learn to live within their means and without debt," says Reese, whose offspring are all being "home schooled."
Always a Republican, he's recently gotten more active in politics, helping to restructure the state GOP's operations and communications systems, looking at things like "how to make use of the Internet and new predictive dialing techniques in telemarketing." An active investor, Reese would love to see a capital gains tax cut but above all hopes the GOP won't stint from the values debate and will try to do something about "things like the nonstop decline in character, integrity, and patriotism." Says he: "People like me should be referred to not as the religious right but as the mainstream-values coalition."
Many executives and managers will, nonetheless, find that the religious right makes for very strange political bedfellows. Also true. And at bottom this rift is not about class (although it is hard to imagine many corporate executives purchasing Sea of Galilee face cream or quaffing a nutritional drink called the American Whey, two offerings from a health products chain that was owned until November by Pat Robertson). It's about metaphysics.
Sample the various TV and radio broadcasts of the large and growing Christian media samizdat, and at some point you stumble (as I did on Highway 635 outside Dallas) across folks earnestly debating whether Russian fascist Vladimir Zhirinovsky is the Beast 666 from the Book of Revelations. Pick up books by prominent movement figures and at some point you read, say, that Woodrow Wilson, George Bush, and Jimmy Carter may have been unwitting pawns of "a tightly knit cabal," somehow linked to Freemasons and "European bankers," whose goal is "nothing less than a new order for the human race under the domination of Lucifer" (from Pat Robertson's best-seller The New World Order). Hardly the stuff of country-club locker-room conversation.
Business lobbyists can and should build better bridges to the religious right. Good idea. Until now, social and religious conservatives and the established business lobby in Washington have occupied the same city but completely separate worlds. Even when they were backing a common policy, such as opposing the Clinton health plan, says a prominent trade association head, "we'd never form a single coalition, because it wasn't considered respectable to comport with those folks."
Given the GOP's ascendancy and the clout people like Reed now enjoy, persisting in such persnicketiness seems foolish, especially given mutual interests in such issues as tort and regulatory reform, welfare reform, passing a balanced-budget amendment (favored by 73% of CEOs in Fortune's poll), and imposing term limits (backed by 63% of CEOs).
Religious conservatives have been focusing more on economics lately and less on single-issue politics... True. The Christian Coalition backed pro-choice conservatives Paul Coverdell of Georgia and Kay Bailey Hutchison of Texas in recent Senate races, and is hewing faithfully to the party line about focusing for now on fulfilling the Contract with America. Says Ralph Reed: "Our view is that if we can reduce the size and scope of the federal government, we'll have gone a long way toward a pro-family agenda."
...so knockdown, drag-out fights over controversial social issues can be avoided for the next two years. No chance. "Once the contract's been dealt with, social conservatives want a second 100 days for them," says Robert Knight, director of cultural studies at the Family Research Council. "And we want it taken every bit as seriously as the first 100 are." Priorities: "defund the left" by sharply trimming back, eliminating, or privatizing agencies like the National Endowment for the Arts and the Corporation for Public Broadcasting; ensuring the right to conduct open, voluntary prayer in public schools; abolishing the Department of Education (whose hated sex education programs and other mandates have been a major spur to activism among Christian conservatives); and cutting off all federal support for abortion (including the tens of millions of dollars a year the government doles out to Planned Parenthood).
The biggest battle over abortion will likely come at the party's 1996 convention. GOP moderates--California Governor Pete Wilson, New Jersey Governor Christine Whitman, and Arlen Specter, among others--would desperately like to pull back from the party platform's call for a pro-life constitutional amendment. Religious conservatives aren't likely to give an inch-and almost certainly will have the firepower to prevail. At best, it promises to provide an unwanted spectacle.
Down the road, free trade will also become an area of conflict. Though the Christian Coalition took no position in the GATT debate, many of its members are sympathetic to the nativist natterings and conspiracy theorizing on display in Pat Robertson's writings and often aired on Christian radio stations. "A lot of the same conservatives who worry about 1.5 million babies being aborted annually in this country are also concerned about running a $150-billion-a-year trade deficit," claims Terence Jeffrey, 36, executive director of American Cause, the lobbying group founded by Pat Buchanan. Jeffrey, who denounces America's "managerial and investing class" for lacking "any commonality of interest with the people who work for them" and taking advantage of foreign "slave labor," predicts that the GOP will adopt an economic nationalist position by 1996.
The political influence of religious conservatives has peaked. Wrong. Election analysts expect 1996 will be the biggest year yet for white evangelical Protestants in the voting booths. Looking toward the millennium, Ralph Reed talks expansively of making further inroads with black evangelicals and conservative white Catholics and Latin Americans--he figures getting 20% to 30% of their vote is a reasonable goal--and pulling ten million voters onto the Christian Coalition's mailing lists. To put that in perspective, the NRA currently claims 3.5 million members, the Sierra Club more than 500,000. "Our long-term goal," says Reed, "is to serve as an institutionalized counterbalance to the Establishment Left." The vision includes activists who would operate in every one of the 175,000 precincts in the U.S., compiling voting guides for virtually every electable office: school boards, precinct chairmen, dogcatchers.
A new centrist third party, fiscally conservative and moderate on social issues, is bound to emerge in the U.S. We do seem to be slouching in that direction. Beyond the polarizing debate over cultural issues, neither party seems able to mount a serious assault on the real source of America's deficit --uncontrolled spending on middle-class entitlements, such as Social Security and Medicare.
But when might a new party emerge, and from where? Ross Perot tried in 1992, but both message and messenger (especially messenger) were flawed. Now Democrat Paul Tsongas and others are making a quixotic call for Colin Powell to head a kind of national unity party in 1996. Their fantasy is that somehow the folks from the Democratic Leadership Council, fleeing in frustration from their party's inability to turn more toward the right, would meet up with moderate Republicans horrified by their party's ability to do so all too well.
No one's betting on that, and even if it occurs, it's certain that the "small c" conservatives who run corporate America won't be leading the charge. In Fortune's CEO Poll, just 8% of top executives saw any need for such a new party. Instead, most prefer to keep dreaming about finding what one of their number describes this way: "a Republican like Eisenhower, who could come along and excite centrists again." Too bad for them that in a party much enamored with the 1950s, Ike-like moderation seems the aspect of that decade least likely to be restored by the new GOP.
Reading between the lines, the bottom line is this: Big business would love to see at the head of the GOP ticket in 1996 a centrist fiscal conservative who could reach beyond the party's base to attract a broad swath of swing voters and pro-choice Perotistas. That's possible, but it's sure not the way to bet. "Cheney was the candidate whose style was most reassuring to the establishment," says Norman Ornstein, a political analyst with the American Enterprise Institute. "But that style never resonated with party activists, and in the wake of their victory in November and the change in Congress, you're far more likely to see a GOP candidate running in 1996 on an explicitly antiestablishment message."
As it struggles to come to terms with the changes in its party, maybe the corporate community should take a page from that old survivor and fellow pragmatist Bob Dole. Back in 1984, having been labeled by some upstart named Gingrich as "the tax collector for the welfare state," Dole dismissed Newt and his small but vocal band of congressional activists as "young hypocrites." "They think they can peddle the idea that they've taken over the party," he loftily told a New York Times reporter. "Well, they aren't the Republican Party, and they aren't going to be." The point is, Bob was wrong, but he's moved on; he's dealing with the changed realities of the political marketplace.
To help you do the same, here follows a short guide to the truth or falsehood of several key propositions that pertain to business, religious conservatives, and the new Republican Party.
The religious right now controls the GOP. A large overstatement. The entire apparatus and hierarchy of the Grand Old Party have not converted overnight into God's Own Preserve. Aside from various species of economic conservatives and libertarians, who don't march in lock step with their social conservative brethren, nearly a dozen self-styled moderates still occupy Republican seats in the Senate. As many as 40 graze (quietly these days) in the House, while among the 30 Republican governors, hybrid strains of fiscal-conservative/social-moderate flourish, win reelection--and even remain solicitous of big companies' economic needs and desires.
Religious conservatives are the single most powerful force within the GOP. That's more like it. For years, well-off Episcopalians, Presbyterians, Methodists, and other traditional Protestants constituted the single biggest bloc among Republican voters. While plenty of them still show up at ballot time to pull the GOP lever, they are now being surpassed by white born-again Christians, whose share of all U.S. voters has climbed from 12% in 1988 to some 22% in the last election. Among this group, an extraordinary 78% voted Republican in 1994, the highest percentage on record.
Conservative theorist Irving Kristol has likened this influx of activist newcomers into the GOP to the great surge of European immigrants into the Democratic party between 1870 and 1914, a migration that transformed the party and turned Democrats into the country's dominant political force. Religious conservatives, Kristol presciently opined in 1993, "are going to be the very core of an emerging American conservatism."
Religious conservatives hold veto power over the Republican presidential nomination in 1996. Pretty much. They can't unilaterally impose a candidate on the party--or ensure the victory of any truly controversial character the like of Ollie North. On the other hand, as John Green, a political scientist and expert on the movement, puts it, "nobody will get the Republican nomination in 1996 who provokes the active hostility of evangelical Protestants."
Confirmation of that reality: the care all serious potential candidates now take to avoid offending religious conservatives. In 1992, for example, Massachusetts Governor Bill Weld led the forces fighting against the party's rigid pro-life stance at its Houston convention. But last spring Weld declined a reporter's invitation to affirm his intention to repeat that effort, noting, "I want to be in the same party as Pat Robertson. They're very nice people."
The exception, Arlen Specter, merely proves that the religious right rules. "If Pat Robertson, Pat Buchanan, and the social- issue extremists dominate the party and the convention again in 1996, we'll give Bill Clinton his best chance to win," Specter told Fortune. "I'm sure the American business community is scared to death of having Republicans misread the meaning of the elections, get sidetracked into pursuing a radical social agenda, and blowing our best chance to cut taxes and spending." He's right. They are. But not a single CEO in Fortune's poll expressed an interest in his candidacy.
Since Republican populists, unlike the Democratic variety, aren't actively hostile toward corporations, it doesn't really matter if they feel estranged from big business. False. For one thing, it means that when the party bakes a tax-cut cake, corporate views count for little at mixing time. Why is the centerpiece of the new GOP tax program a $500-per-child tax credit with a $107 billion pricetag over five years (almost twice the cost of cutting capital gains taxes), a measure that virtually all economists agree does nothing to stimulate capital formation or growth and that only 19% of CEOs in Fortune's poll rated as important? "It's a result of our movement," says Ralph Reed. "Before, the GOP had only talked about supply-side tax cuts and cutting capital gains. But we said we want this. Higher taxes have been tearing at the fabric of the American family, and you can't just focus on economic arguments and ignore family values." Ways and Means Chairman Bill Archer has already indicated that if it gets tough to find money to pay for all the contract's tax cuts, one of the first things that he'll scale back are proposals to ease depreciation schedules on business investment.
The same holds for the spending side. If you're a flinty free-marketeer like investment banker and former Treasury Secretary William Simon, you're so ecstatic over the real prospects for truly significant cuts that you don't fret over much about where the GOP swings its budget broadax. But if, like many Americans, you support the principle of balancing the budget but would just like to preserve a few special programs that matter to you, then you care plenty who's tightest with Gingrich, Armey, House budget hawk John Kasich, or Senate grandees like Phil Gramm and Mississippi's Trent Lott, the new majority whip.
True, a few large companies on the fringe of corporate America--the tobacco industry, Amway--enjoy the status of bigtime contributors. For the most part, though, the folks at the head of the lobbying queue these days have zero interest in preserving programs they consider "corporate welfare." Says John Motley, vice president for federal government relations at the NFIB: "We don't like the idea of industrial policy and don't believe large companies should be looking to the government to help them export." Ralph Reed goes even further, declaring that "whether it's the Chrysler bailout or John Sculley flying in on his jet to meet the President, the era of handwringing CEOs swooping into Washington to seek special breaks is a fixture of a bygone era."
Many executives and managers hold distorted and inaccurate views of who religious conservatives really are. Undoubtedly. In 1993 a Washington Post article described the believers of the religious right as "largely poor, uneducated, and easy to command," a less incendiary echo of H.L. Mencken's dispatches from the Scopes trial, which depicted evangelicals and fundamentalists as "rustic ignoramuses," "anthropoid rabble," and "gaping primates of the upland valleys."
In fact, 7% of evangelicals now perch in the $75,000-a-year-and-up income bracket, and 6% hold advanced degrees, vs. 10% and 8%, respectively, in the general population. That's according to the most comprehensive recent survey of white evangelical Protestants, a 1992 study conducted by professor John Green and colleagues at the University of Akron. In reality, most religious conservatives are reasonably well educated and solidly middle class. Says former Congressman and Gingrich ally Vin Weber: "Corporate executives might begin to take a different view of the religious right if they would realize that many of these people are their employees, customers, and shareholders."
People like Bob Reese, 42, an affable aeronautical engineer, a devout Christian ("nondenominational fundamentalist"), and vice president of Flowdata, a private manufacturer of metering devices that was recently voted one of the top 50 growth businesses in Dallas. Reese, his wife, Connie, and their eight children live on a 160-acre ranch near Tyler. That's 75 miles away from his office in a north Dallas industrial park, but also far removed from the materialism and "peer pressure" of the suburbs. "I'd like to teach my kids to learn to live within their means and without debt," says Reese, whose offspring are all being "home schooled."
Always a Republican, he's recently gotten more active in politics, helping to restructure the state GOP's operations and communications systems, looking at things like "how to make use of the Internet and new predictive dialing techniques in telemarketing." An active investor, Reese would love to see a capital gains tax cut but above all hopes the GOP won't stint from the values debate and will try to do something about "things like the nonstop decline in character, integrity, and patriotism." Says he: "People like me should be referred to not as the religious right but as the mainstream-values coalition."
Many executives and managers will, nonetheless, find that the religious right makes for very strange political bedfellows. Also true. And at bottom this rift is not about class (although it is hard to imagine many corporate executives purchasing Sea of Galilee face cream or quaffing a nutritional drink called the American Whey, two offerings from a health products chain that was owned until November by Pat Robertson). It's about metaphysics.
Sample the various TV and radio broadcasts of the large and growing Christian media samizdat, and at some point you stumble (as I did on Highway 635 outside Dallas) across folks earnestly debating whether Russian fascist Vladimir Zhirinovsky is the Beast 666 from the Book of Revelations. Pick up books by prominent movement figures and at some point you read, say, that Woodrow Wilson, George Bush, and Jimmy Carter may have been unwitting pawns of "a tightly knit cabal," somehow linked to Freemasons and "European bankers," whose goal is "nothing less than a new order for the human race under the domination of Lucifer" (from Pat Robertson's best-seller The New World Order). Hardly the stuff of country-club locker-room conversation.
Business lobbyists can and should build better bridges to the religious right. Good idea. Until now, social and religious conservatives and the established business lobby in Washington have occupied the same city but completely separate worlds. Even when they were backing a common policy, such as opposing the Clinton health plan, says a prominent trade association head, "we'd never form a single coalition, because it wasn't considered respectable to comport with those folks."
Given the GOP's ascendancy and the clout people like Reed now enjoy, persisting in such persnicketiness seems foolish, especially given mutual interests in such issues as tort and regulatory reform, welfare reform, passing a balanced-budget amendment (favored by 73% of CEOs in Fortune's poll), and imposing term limits (backed by 63% of CEOs).
Religious conservatives have been focusing more on economics lately and less on single-issue politics... True. The Christian Coalition backed pro-choice conservatives Paul Coverdell of Georgia and Kay Bailey Hutchison of Texas in recent Senate races, and is hewing faithfully to the party line about focusing for now on fulfilling the Contract with America. Says Ralph Reed: "Our view is that if we can reduce the size and scope of the federal government, we'll have gone a long way toward a pro-family agenda."
...so knockdown, drag-out fights over controversial social issues can be avoided for the next two years. No chance. "Once the contract's been dealt with, social conservatives want a second 100 days for them," says Robert Knight, director of cultural studies at the Family Research Council. "And we want it taken every bit as seriously as the first 100 are." Priorities: "defund the left" by sharply trimming back, eliminating, or privatizing agencies like the National Endowment for the Arts and the Corporation for Public Broadcasting; ensuring the right to conduct open, voluntary prayer in public schools; abolishing the Department of Education (whose hated sex education programs and other mandates have been a major spur to activism among Christian conservatives); and cutting off all federal support for abortion (including the tens of millions of dollars a year the government doles out to Planned Parenthood).
The biggest battle over abortion will likely come at the party's 1996 convention. GOP moderates--California Governor Pete Wilson, New Jersey Governor Christine Whitman, and Arlen Specter, among others--would desperately like to pull back from the party platform's call for a pro-life constitutional amendment. Religious conservatives aren't likely to give an inch-and almost certainly will have the firepower to prevail. At best, it promises to provide an unwanted spectacle.
Down the road, free trade will also become an area of conflict. Though the Christian Coalition took no position in the GATT debate, many of its members are sympathetic to the nativist natterings and conspiracy theorizing on display in Pat Robertson's writings and often aired on Christian radio stations. "A lot of the same conservatives who worry about 1.5 million babies being aborted annually in this country are also concerned about running a $150-billion-a-year trade deficit," claims Terence Jeffrey, 36, executive director of American Cause, the lobbying group founded by Pat Buchanan. Jeffrey, who denounces America's "managerial and investing class" for lacking "any commonality of interest with the people who work for them" and taking advantage of foreign "slave labor," predicts that the GOP will adopt an economic nationalist position by 1996.
The political influence of religious conservatives has peaked. Wrong. Election analysts expect 1996 will be the biggest year yet for white evangelical Protestants in the voting booths. Looking toward the millennium, Ralph Reed talks expansively of making further inroads with black evangelicals and conservative white Catholics and Latin Americans--he figures getting 20% to 30% of their vote is a reasonable goal--and pulling ten million voters onto the Christian Coalition's mailing lists. To put that in perspective, the NRA currently claims 3.5 million members, the Sierra Club more than 500,000. "Our long-term goal," says Reed, "is to serve as an institutionalized counterbalance to the Establishment Left." The vision includes activists who would operate in every one of the 175,000 precincts in the U.S., compiling voting guides for virtually every electable office: school boards, precinct chairmen, dogcatchers.
A new centrist third party, fiscally conservative and moderate on social issues, is bound to emerge in the U.S. We do seem to be slouching in that direction. Beyond the polarizing debate over cultural issues, neither party seems able to mount a serious assault on the real source of America's deficit --uncontrolled spending on middle-class entitlements, such as Social Security and Medicare.
But when might a new party emerge, and from where? Ross Perot tried in 1992, but both message and messenger (especially messenger) were flawed. Now Democrat Paul Tsongas and others are making a quixotic call for Colin Powell to head a kind of national unity party in 1996. Their fantasy is that somehow the folks from the Democratic Leadership Council, fleeing in frustration from their party's inability to turn more toward the right, would meet up with moderate Republicans horrified by their party's ability to do so all too well.
No one's betting on that, and even if it occurs, it's certain that the "small c" conservatives who run corporate America won't be leading the charge. In Fortune's CEO Poll, just 8% of top executives saw any need for such a new party. Instead, most prefer to keep dreaming about finding what one of their number describes this way: "a Republican like Eisenhower, who could come along and excite centrists again." Too bad for them that in a party much enamored with the 1950s, Ike-like moderation seems the aspect of that decade least likely to be restored by the new GOP.
