Lobbyists Bet Big on Kevin McCarthy’s Potential as Speaker. It’s Not Paying Off

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Sitting on the floor of the chamber he still hopes to lead, Kevin McCarthy masked a grimace behind a smile as his fellow Republicans repeatedly rejected his ascension to a job he has long coveted and failed before to earn. It quickly became clear on Tuesday that McCarthy was not going to be elected Speaker of the 118th Congress on the first round of voting. Within a half-hour—with an alphabetical roll-call vote still underway—Rep. Michael Cloud doomed McCarthy’s hopes for a clean win. McCarthy’s dreams only made it to the Cs.

Then in a re-vote, the same 19 again said nah. And, by the time the third vote got going, things were going worse: 20 defections, with the slightest of headwinds growing. And, now on Day Two, the same dynamic is playing out.

All of which makes for dramatic viewing for the armchair polisci nerd watching on C-SPAN. But for the professional lobbying class glued to the vote, it was worse—mainly because literally trillions of dollars in spending hinge on who leads the House, where all spending constitutionally has to start. Special interests had already invested tens of millions in McCarthy’s ambitions over the years. The Congressional Leadership Fund, the campaign arm favored by McCarthy and would-be Speakers before him, had raised and spent almost $260 million this cycle alone to retake the House—far more than the $51 million then-Speaker Paul Ryan helped to raise in 2016 to successfully defend his majority or the $158 million collected in 2018 to unsuccessfully protect it again in two years on McCarthy’s watch. In the eyes of K Street until fairly recently, McCarthy was supposed to have been their guy, a reliable stand-in for corporate interests and Main Street alike. Regulations out, free markets in.

At least that was the deal. But, as with so much of Washington in recent years, McCarthy had to arrive at this moment via the Trump Train. In fact, McCarthy had so embraced former President Donald Trump’s antagonism toward Big Business, monopoly, and internationalism that he arrived at his station this week on a slow ride to nowhere certain. Unlike previous Speaker races, which were nominal affairs at best, K Street sat this one out and mostly kept their phone lines quiet. Trump’s contempt for “political correctness” and “the woke” left him standing far afield from the mainstream business community, which recognized socially conscious buying had a power place in the free market—and, as TIME’s Molly Ball reported, Trump was bad for the bottom line. Years of deriding a so-called rigged system had left special corners of that market feeling, well, slightly betrayed and none-too-eager to join Trump, or McCarthy for that matter.

McCarthy, however, wanted to replicate Trumpism. It was, after all, expedient. And that led to a pretty toxic split between McCarthy and DC’s top lobbyists, especially those at the U.S. Chamber of Commerce. For years, the Chamber had been seen more as an appendage of the Republican Party than as a pro-business lobbying group with some incredible real estate just a three wood from the North Lawn of the White House. The Chamber spent less than in $400,000 in direct giving this year, but its $60 million in lobbying made it an enormous player whose calls must be answered on the first ring.

Trump’s isolationist approach—and McCarthy’s willingness to accommodate it—led the Chamber to break with tradition during the midterms and support some first-term Democratic candidates for re-election. Of the 23 House Democrats to get Chamber support last year, 15 are coming back. The group’s direct giving to Republicans fell from $312 million during the 2018 midterms to $279 million in 2022, while Democratic support jumped from $74 million to $103 million.

And you could draw a direct line from that swap to McCarthy’s struggling bid for Speaker. Had the Chamber stepped in to help McCarthy’s allies, he could have been an easy quid pro quo from the gavel. Yet, as shown by the continued defections, so-called Big Business wasn’t stepping in to help shore up his threadbare majority. Nor were other deep-pocketed players on K Street. McCarthy had cashed their checks as he climbed the ladder of power, but he was now seen as a co-opted Trump ally. And that, many on K Street realized, was not exactly good for their bottom line, especially for businesses reliant on cheap foreign labor markets. They may not have liked Nancy Pelosi’s policy or posture, but they knew she’d never be in this sort of limbo. Many lobbyists, it turned out, wrote checks to the moderates, not the meltdowns.

So as McCarthy limped toward yet another round of balloting, he must surely be reconsidering his embrace of Trump’s populism and, at best, polite indifference toward K Street’s preferences. The Trump hug was expedient, but hardly permanent. Trump even on Wednesday was telling his loyalists to back McCarthy and avoid embarrassment, but it was clear the would-be-Speaker was facing terrors from his own quarters—perhaps, even, of his own making. Even if he prevails and grabs the gavel, a Speaker McCarthy would have far less sturdy of a grip on power than his predecessors. And that is sure to be a weakness for his ability to not only govern, but to do that all important shuffle down K Street to collect checks going forward.

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