The government shutdown and looming threat of default have pitted House conservatives against the Republican Party's traditional allies in the business community. Populist Tea Partiers driven by ideology care little for the pleas for sanity from banking lobbyists and the Chamber of Commerce; indeed, they wear their disregard for Big Business as a badge of honor.
Where does that leave the Koch brothers? The billionaire industrialists have funded a sprawling empire of libertarian-conservative activism; they've been dubbed the bankrollers of the Tea Party. Liberals frequently accuse them of seeking deregulatory policies to further their company's financial interests. But what happens when the Tea Party's ideological warfare threatens to plunge the U.S. economy into chaos?
The answer: The Kochs appear to be distancing themselves from the movement they've helped to create. In a letter released Wednesday, Koch Industries' chief lobbyist, Philip Ellender, says the company does not favor the House's push to defund Obamacare as a condition of keeping the government open. Koch Industries would prefer to see Congress focus on fiscal issues: "We believe that Congress should, at a minimum, keep to sequester-level spending guidelines, and develop a plan for more significant and widespread spending reductions in the future," Ellender writes.
Ellender's letter came in response to Democrats' attempts to pin the shutdown on the Kochs. Speaking on the Senate floor on Tuesday, Majority Leader Harry Reid said: "Very rich people in America who don’t believe in government have used Obamacare as a conduit to shut down the government …. This has been led by, according to the news article, a former attorney general of the United States, Ed Meese, and the Koch brothers, who have been raising and spending hundreds of millions of dollars to get us where we are right now," Reid said. He added, "By shutting down the government—and that is what has happened—we are satisfying the Koch brothers and Ed Meese, but millions of people in America are suffering." Reid cited a front-page New York Times article on Sunday that traced the government shutdown's origins in a network of right-wing pressure groups opposed to Obamacare, many of them funded by Charles and David Koch.
But Ellender, in his letter, accuses Reid of distorting Koch's stance. "Koch believes that Obamacare will increase deficits, lead to an overall lowering of the standard of health care in America, and raise taxes," he writes. "However, Koch has not taken a position on the legislative tactic of tying the continuing resolution to defunding Obamacrare nor have we lobbied on legislative provisions defunding Obamacare."
In addition to keeping spending at sequester levels, Ellender adds, "We also believe that Congress should work to rein-in rampant government spending so that it becomes no longer necessary to continually raise the debt ceiling."
Even as the Kochs attempt to disavow the defund movement, their money has supported it. The brothers have given half a million dollars to Heritage Action, which toured the country rallying support for defunding Obamacare over the summer, Politico reported Wednesday. Heritage Action continues to insist the way to end the shutdown must be defund or nothing: Talk of a fiscal deal constitutes "losing focus," according to a Heritage Action blog post on Tuesday, and "the House should use its leverage to battle President Obama's failed health care law." The Koch-funded group Americans for Prosperity officially supports repealing Obamacare, not defunding it, but state chapters in New Jersey, New Mexico, Ohio, and Virginia have voiced support for defunding.
Like others in the business community, the Kochs appear to believe that the push to defund Obamacare is a doomed and destructive distraction and that the Republican-led House should refocus on fiscal issues. A bigger fiscal deal is the goal House Majority Leader Eric Cantor and Budget Committee Chairman Paul Ryan pushed in a pair of op-eds Wednesday. But it's adamantly opposed by many conservative activists who still see defunding as achievable, and who see the threat of default not as a looming calamity but as a politically motivated ruse. It's this insistence that Obamacare be gutted at all costs, backed by the archconservative faction in the House, that's keeping the shutdown from ending.
The bigger picture here is the continuing splintering of the mainline GOP from its restive, angry base. Many in the Republican establishment hailed the Tea Party when it seemed like merely a source of grassroots enthusiasm for GOP politicians. But now it has turned on them, and even the Koch brothers find they are powerless to stop it.