By Kevin Bogardus - 10/31/13 06:00 AM EDT
The feuding between business groups and Tea Party Republicans is just beginning.
Trade associations and conservative groups that clashed bitterly over the government shutdown and the debt-ceiling hike will soon be on opposite sides in fights over the U.S. Export-Import Bank, the Terrorism Risk Insurance Act (TRIA) and the farm bill, to name just a few.
“You are starting to see some daylight growing between K Street’s entrenched interests and their friends in Washington versus us and the rest of the conservative grassroots,” said Josh Withrow, legislative affairs manager for FreedomWorks.
FreedomWorks could be one of several groups giving heartburn to House Republican leaders as they try to take action on businesses’ priorities ahead of the midterm elections.
Of particular importance to business groups is the terrorism insurance program.
Set to expire at the end of 2014, the program requires the federal government to pay for 85 percent of coverage for terrorist attacks if damages exceed $100 million. The government can earn its losses back by charging insurers.
“To me, we have some good comebacks, if you will, to some conservative voices in the Congress and around the country,” said Leigh Ann Pusey, president and CEO of the American Insurance Association. “[TRIA] puts in place an economically orderly recovery that has worked to date, structured in a way that protects taxpayers. We would argue that it’s necessary and it hasn’t cost the taxpayer to date.”
First passed in 2002 in response to the 9/11 attacks, TRIA has been extended twice by Congress — the last time in 2007 in an overwhelmingly bipartisan House vote of 360-53.
Lobbyists say the program ensures that major landmark and tourism destinations receive insurance coverage.
“Our hotels are in some areas where there could be terrorist attacks so we want to be sure that they will be able to buy terrorist insurance,” said Vanessa Sinders, senior vice president and department head of governmental affairs for the American Hotel & Lodging Association.
“We have started already hearing from our properties that they are re-upping their insurance contracts, and insurance companies are telling them if TRIA isn’t reauthorized, they will include a clause in the contracts that they won’t cover for terrorist attacks.”
But right-leaning activists have questioned the program, and say the insurance risk should be borne by the private sector, not the government.
“We have a real problem with the government absorbing 85 percent of the costs in the event of a terrorist attack while the insurance companies only have a 15 percent obligation,” said Patrick Hedger, a FreedomWorks policy analyst.
Others in the conservative world have criticized the program as well.
The Club for Growth key-voted against extending the program in 2005 and 2007. David John, a Heritage Foundation senior research fellow, argued in testimony before Congress last year that TRIA should be phased out.
Washington could also see another drawn-out battle over the U.S. Export-Import Bank, which needs to be reauthorized before its charter expires in September.
The bank helps finance U.S. exports, often by providing multibillion-dollar loans.
Large companies like Boeing and some small businesses say the bank’s assistance is vital to industry.
“It is absolutely essential to doing modern business,” said Bill Reinsch, president of the National Foreign Trade Council, who noted that other countries provide similar export assistance.
“What frustrates our side [business groups] is that it is an essential element for us in competition. I don’t understand why these people want us to work with one hand tied behind our back.”
But conservative activists lobby against the bank ferociously, arguing it provides government handouts.
“The Export-Import Bank is nothing more than a slush fund for corporate welfare, and we will support its elimination,” said Barney Keller, a spokesman for the Club for Growth.
Conservative activists are constantly on guard against any legislation that they think creates federal meddling in the marketplace. They’ve fought against the farm and highway bills in the past, making it harder for House Republican leaders to secure votes.
“A lot of these fights that are coming up next year, one of the distinctions you are going to see is the divide between establishment Republicans and the conservative grassroots on the proper role of the government,” said Dan Holler, a spokesman for Heritage Action for America.
Holler said many of the business groups have a fundamentally different view of the government’s role in the economy.
“You are going to see a lot of special interests in town claiming that these bills are job-creation bills. The implication is that it is the federal government’s role is to create jobs,” Holler said.
“This is and was President Obama’s pitch for the stimulus in 2009, and whenever he decides to do his stimulus 5.0 pitch.”