Pride Before the Fall

Conservatives’ summer wins are paving the way for fall bipartisan brawls.

Republican House Speaker McCarthy is currently winning some of his internal political battles. But it’s likely these actions will have left him and most Republicans politically exposed and seemingly ill-positioned to win the longer-term wars coming later this fall as we head into an important election cycle.  

McCarthy's concessions to conservatives on spending and more recently social policy issues succeeded in getting them to lift their House floor blockade. That allowed McCarthy to move legislation again, including the just-passed FY24 National Defense Authorization bill. But there is more to the legislative process than just getting 218 Republican votes in the House.  

Unfortunately for McCarthy, the support of 60 senators and the White House is required and it is unlikely to be found for much of the conservative agenda. 

The immediate consequences of McCarthy’s actions have allowed him to avoid alienating the conservatives and to move legislation on the House floor. But there could be longer-term ramifications for McCarthy and ultimately all Republicans if they try to hold to the fiscal and policy positions they have staked out.

As you assess the entire fall legislative lineup—the issues, the politics, positions of the parties and legislative procedure—it seems clear McCarthy’s approach of making concessions to conservatives to get things done is running out of runway.  At some point this fall, he will need to bring bills to the House floor that have the support of the Biden Administration and 60 senators. And these bills are likely to contain more losses than wins for his conservatives. The big question is how long McCarthy sticks with them and at what cost to the Republican Party.

The Biden Administration is working to achieve the thaw with China the president predicted earlier this year. 

Back-to-back visits to Beijing by Secretary of State Antony Blinken and Treasury Secretary Janet Yellen demonstrated the U.S. desire to to move forward in a more positive direction. The U.S. government described these trips in positive terms and pointed out the “candidness” on both sides. 

But the question remains as to whether reality can hold up to the stated goal of both the U.S. and China to reset relations on the path outlined by Presidents Biden and Xi in Bali last year.

Notably, despite softening language on both sides, the Blinken and Yellen visits were not accompanied by any major policy announcements or initiatives. 

Many on the Chinese side expressed skepticism about U.S. intentions. The Chinese government readouts of Blinken’s visit placed the blame for the downturn in relations squarely on the U.S. and maintained tough language on Taiwan. 

Meanwhile, the Biden Administration continues to contend with a hawkish Congress that has not embraced the less aggressive tone toward China and pushes for policies that will further distance the two countries. The Biden Administration continues to consider economic measures meant to decrease the U.S. economy’s exposure to China that, if adopted, will earn further condemnation from Beijing.

Following nation-wide protests sparked by George Floyd’s murder in 2020, hiring for DEI-related roles increased significantly, as did financial commitments to DEI initiatives. But in 2022 the numbers declined in all areas, including hiring, financial contributions, conversations happening on analyst calls and appointments of underrepresented groups to corporate boards. 

In 2023, business leaders are now faced with a new set of challenges around limited resources, DEI backlash and the risk of their companies appearing performative.

On the latest episode of our FGS Global podcast, Insight to Impact, FGS Global Partner Lisa Green interviews FGS Global Senior Advisor and Vice Chair of the NAACP National Board of Directors Karen Boykin-Towns about these trends.

Some key takeaways:

• DEI doesn’t just help an organization guard against harassment and discrimination. When it's done well, it can give the company a competitive advantage and enhance the business.

• If a company is looking to speak out on an issue, its internal house needs to be in order. If it isn’t, the company’s words and actions may be perceived as performative, and it could face backlash.

• Companies must understand what their values are as navigating the culture wars becomes increasingly fraught. When speaking out on issues, they should consider what matters to their business, to their stakeholders and their employees.

• DEI isn’t just about bodies in roles. It’s about the culture, how people feel when they come to work. 

• Naming a chief diversity officer is not going to fix all your issues. To be successful, they need to get integrated into a company’s DNA, which takes time and internal buy-in at all levels.

Listen to the episode here.