Industry the July/August 2014 issue

100% of Nothing or 90% of Something

There is growing tension between anti-government conservatives and pro-business conservatives. Yes, there’s a difference.
By Joel Wood Posted on July 17, 2014

What are the implications for healthcare reform? Does the ongoing intra-party warfare guarantee more years of dysfunction, especially in the House? How can we ever get anything done?

Indeed, Cantor’s defeat will have repercussions for all of these issues. It served as an astonishing reminder that inside-the-Beltway conventional wisdom (which is pretty much the only knowledge I possess) is too often dead wrong. In retrospect, all the warning signs were there for the House Majority Leader, but none of us saw his defeat coming, especially not by double digits.

And while I do fear consequences when a thoughtful conservative leader like Cantor is thrown out, I don’t think there’s any reason for “establishment” Republicans like me to melt down (I prefer being considered a “Reaganite,” but these days that term refers to a big-government liberal.) After all, on the same night that the Speaker-in-waiting faltered, Sen. Lindsay Graham, R-S.C., a man who embraced immigration reform and was the very essence of establishment, easily fended off Tea Party challengers in his South Carolina primary. 

And as of June, in every state but Texas and Mississippi, the Tea Party wing of the party (which I define as those who would prefer 100% of nothing instead of 90% of something) had largely lost out to mainstream Republicans. Cantor was only the second sitting representative who lost to a more conservative opponent in this election cycle. The first was Rep. Ralph Hall, R-Texas, who at 91 years of age had never before run a modern campaign.

So, no panic here. I still feel as though control of the U.S. Senate in the fall elections is the Republicans’ to lose, and continued GOP control of the House is assured. But I do worry about the impact on our commercial insurance agenda. Our issues used to be low-profile, regulatory, technocratic—and mostly non-ideological.

Now our issues are front-burner concerns in Congress and are affected significantly by philosophical divides.

Our issues used to be low-profile, regulatory, technocratic, and mostly non-ideological.

First, on the property-casualty side, our major priority this year is the renewal of the Terrorism Risk Insurance Act (and, with it, our long-sought NARAB proposal for multistate nonresident agent/broker licensure). Senate action in extending the program for seven years with tweaks has been bipartisan and relatively smooth. On the other side of the Capitol, TRIA action has been trickier. House Financial Services Committee Chairman Jeb Hensarling, R-Texas, has long been a TRIA skeptic. He would like to significantly reduce the federal government’s role in terrorism reinsurance.

There has been tension between Cantor and Hensarling this year, especially when Cantor pushed a flood insurance relief bill onto the House floor over Chairman Hensarling’s objections. On the morning after Cantor’s primary defeat, Politico had the following analysis of the TRIA implications: “Cantor was a major force behind moving a reauthorization of TRIA. The bill should still move, but perhaps on a slower timetable without him. Hensarling…would reduce taxpayer exposure via higher thresholds, greater government recoupment, and a reserve fund for future payouts. Cantor’s loss may slow down the process for negotiating a compromise with the more generous Senate reauthorization bill.”

I’m not so sure about that about that analysis. It is true that Senate Democrats are loathe to negotiate with House Republicans, especially when the Senate TRIA bill cleared the committee with unanimous support, and the House product has been more partisan. Cantor has indeed been pushing for TRIA reauthorization, but he also demurred in May to Hensarling. TRIA will get done. It may be ugly, but it will get done.

The healthcare consequences of Tea Party reemergence are less clear. The battle lines are pretty clear to be seen. At The Council’s Employee Benefits Leadership Forum in Colorado in May, I asked former Florida governor Jeb Bush, a potential presidential candidate, about the prospects for healthcare reform for the next administration—given that repealing the Affordable Care Act would mean millions of Americans would theoretically lose their subsidized exchange coverage. While expressing outrage over the ACA, Bush indicated “fixing” the ACA is the goal—not repealing.

For the Tea Party crowd, that goal may be heresy. The 2013 government shutdown led by Sen. Ted Cruz, R-Texas, was disastrous for the party. There was no end game. It marked the nadir of congressional Republican approval in every poll. Will this “Groundhog Day” cycle repeat itself?

The Cantor primary defeat was jarring on these issues. But I don’t think it’s a harbinger of madness. Cantor, House Speaker John Boehner, R-Ohio, and Senate Minority Leader Mitch McConnell, R-Ky., have worked hard in the aftermath of the government shutdown to keep the focus on conservative wins, not ideological purity. 

The national attention on the Cantor loss brings into focus the growing tension between anti-government conservatives and pro-business conservatives. There’s a difference. On the full panoply of insurance concerns—regulatory, property-casualty, benefits—the compatibility (or incompatibility) between those two factions has great influence over our agenda. That’s to put it mildly. More directly, it reminds me of the line that the late great congressman Charlie Wilson, R-Texas, gave about the Supreme Court nomination of the shy and scholarly New Englander David Souter: “David Souter better fasten his seat belt because this ain’t New Hampshire—and it ain’t like living with Mama.”

Joel Wood Senior Vice President, Government Affairs, The Council Read More

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