The trickiest two-step in Washington as the debt-ceiling deadline looms is the one that House Republican Leader Eric Cantor has been called on to perform. Even more than his boss, John Boehner, Cantor answers to two masters whose interests have diverged: Wall Street and the Tea Party.
Until the past few days, Cantor has tilted toward the Teasters, at least when in public. Walking out on Joe Biden's negotiations with congressional leaders, challenging President Obama during his meetings with those leaders, and taking a harder line than Boehner on any proposed compromises, Cantor had consistently positioned himself as the leader of the new, more radical generation of GOP legislators, the Gingrich to Boehner's Bob Michael.
Now, however, Cantor has become Boehner's enforcer, telling the Teasters to stand down and accept Boehner's debt-ceiling plan. In Boehner's meeting with the House GOP caucus on Wednesday morning, Cantor, according to The Wall Street Journal, not only defended Boehner's bill but declared that "he was tired of hearing Republicans criticizing other Republicans on cable television." He called on caucus members to "rally together" to pass the speaker's bill.
Cantor's pirouette may not be all that surprising; he is, after all, the No. 2 Republican in the House. But it makes perfect sense when we learn -- courtesy of a terrific Alec MacGillis piece that ran in Monday's Washington Post -- that he's the congressional point person for Wall Street hedge-fund operators and private-equity bankers. "For the past four years," MacGillis reports, "Cantor has taken the lead in the House on fighting" proposals that would tax hedge-fund pay as ordinary income (it's currently taxed at a rate of 15 percent) and other proposals that would compel the private-equity bankers to pay taxes at rates at least as high as their secretaries'. Indeed, MacGillis writes, it was Cantor's opposition to the Democrats' proposal to increase taxes on this very small number of gazillionaires that prompted his exit from the Biden negotiations.
Cantor has been well rewarded for his services to the super-rich. In 2010, MacGillis documents, Cantor's "two fundraising committees took in nearly $2 million from securities and investment firms and real estate companies, more than double the figure for Boehner." His top-ten contributors included the employees at three leading investment firms: Steve Cohen's hedge fund, SAC Capital Advisers ($64,964); KKR ($52,600); and Paul Singer's hedge fund Elliott Management ($44,198).
But now that push has arrived on the doorstep of shove, those Wall Street guys whom Cantor has served so faithfully want the debt ceiling raised lest financial havoc is loosed on the land. (For that matter, Cantor's wife is a former vice president of Goldman Sachs, which is no fan of a debt default, either.) Cantor has thrived from, and funded, Tea Party hysteria, but he can't let it damage his Wall Street patrons. In a sense, his is the dilemma of the entire Republican Party, only for Cantor, it's more acute. That's why he's stumping for Boehner's plan and stomping on those members of his caucus who stand in its way.