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Businessweek Archives

How The Gop Could Brawl Itself Out Of Power

Washington Outlook


These should be glorious days for Capitol Hill Republicans. They just engineered a balanced-budget pact with a family tax credit and lower capital-gains rates. They've pushed President Clinton to reform the welfare system. And the public buys their less-government mantra. But victory has come at a cost: bloody infighting between center-right pragmatists willing to cut deals with Clinton and conservative purists bent on radical change. The warfare raises fresh doubts about the GOP's ability to keep its coalition intact.

Emboldened by the failed right-wing coup against an increasingly flexible House Speaker Newt Gingrich (R-Ga.), the compromisers are on the offensive. Moderate William F. Weld quit as Massachusetts governor on July 29 to wage war with conservative icon Jesse A. Helms (R-N.C.), the Senate Foreign Relations Committee chairman who is blocking Weld from becoming Ambassador to Mexico. At stake is not just a diplomatic post but the GOP's long-term appeal to centrist swing voters turned off by the Right's ideological zeal.

CAVING IN? To his backers, Weld is standing up to Helms and other extremists to keep them from shoving moderates out of the GOP tent. To hard-right activists, Helms is a hero and Weld is emblematic of the "collaborators" who sell out to Clinton. Even Senate Majority Leader Trent Lott (R-Miss.), a staunch conservative, has come under fire for questioning sexism in the military and backing a chemical-weapons ban. "We should change our name to the Cave-In Party," huffs a House right-winger.

That view is shared by a powerful bloc of activists--ranging from religious conservatives to supply-side purists. Such ideological fervor--combined with widespread voter discontent over the economy--helped the GOP capture Congress in 1994. But now, with the good times rolling, complacent voters see little need for revolutionaries. "We're getting things done because we're making accommodations," says Representative Sherwood L. Boehlert (R-N.Y.), a leading House moderate. "The problem with the [hard-liners] is that they think it's a cardinal sin to make any accommodation."

The intensifying discord could imperil the GOP's 11-seat House majority in 1998. Faced with a tough campaign, Republicans can't afford to look as though they're hostage to the Far Right. But neither can they snub the religious conservatives who've helped them capture former Democratic seats in the South and Midwest. "None of this is good for Republicans in '98," concedes conservative activist Karen Kerrigan, president of the Small Business Survival Committee.

NICE TILT. For now, the balanced-budget deal is a rallying point for all GOP factions. Budget hawks are pleased that it will erase decades of red ink. Supply siders extol its capital-gains tax cut. Social conservatives like the "pro-family" tilt. And moderates hail new spending on education, health care, and the environment.

But the unity will dissolve in the scramble for the 2000 Presidential nomination. Weld--or another moderate, such as New Jersey Governor Christine Whitman--may battle a Religious Right favorite, such as former Vice-President Dan Quayle. And the champion of another faction, supply sider Steve Forbes, looks like he's going to throw his checkbook into the ring again.

Democrats may face splits within their own party, too, as New Democrats vie against traditional liberals. But for now, Dems are managing to keep their differences under control. If the Republican purists don't listen to the voters and make peace with the pragmatists, they may find themselves waging their revolution again--as the minority party.EDITED BY OWEN ULLMANN By Richard S. DunhamReturn to top


A long-running battle between Washington and Silicon Valley over a vital high-tech issue--how to keep online information secure--may finally come to a peaceful resolution this fall.

The dispute is over encryption software that scrambles electronic data to protect it from prying eyes. Business needs it to conduct confidential transactions on the Internet. But the FBI and the CIA fear they will be hampered by use of secret codes. So the feds are restricting exports of encryption software and want makers to create codes that law enforcement will be able to break.

In September, the House will vote on an industry-backed bill that would remove most export limits, a move that could mean up to $9 billion a year in overseas sales. The Senate is moving in the opposite direction: It's considering an Administration-backed measure that ensures government access to the codes. But Senator John McCain (R-Ariz.), a chief sponsor, says he'll explore a middle ground with industry reps. Senate Judiciary Committee Chairman Orrin G. Hatch (R-Utah) and ranking Democrat Patrick J. Leahy (Vt.) may write a more pro-industry bill.

If business is willing to deal, a compromise could be forged around the idea of giving the feds limited control over decoders. A big impetus for a settlement: Both House Speaker Newt Gingrich (R-Ga.) and Senate Majority Leader Trent Lott (R-Miss.) have Silicon Valley connections that make them sympathetic to the industry. "The score is tied now," says Commerce Under Secretary William A. Reinsch. "But we're going to get it done."By Catherine YangReturn to top

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