Why business leaders want political gridlock

By Tory Newmyer, writer

FORTUNE -- The business community is rooting for Republicans in the midterm elections. No surprise there. But a new poll of business leaders reveals that attitude doesn't translate into an endorsement of the Republican Party itself.

Instead, respondents registered hope that a newly divided government will allow the private sector some time to absorb the sweeping reforms of the last two years.

The survey of individual and institutional investors, financial advisors, and small business owners -- conducted by the global advisory firm FTI Consulting and released exclusively to Fortune -- presents a sobering assessment of both parties. It should be particularly eye-opening for the GOP as Republicans begin thinking about how to conduct themselves in power. A slim majority of respondents, 53%, said they want Republicans to work with President Obama if they capture one or both chambers of Congress, rather than rolling back what Democrats have already enacted.

"Businesses do not want to see Republicans repealing and replacing health care reform," says FTI's Brent McGoldrick, who coordinated the poll.

Many Republicans have pledged to undo the law and are using it as a rallying cry in their campaigns. But repealing it in the near term remains a nearly impossible task, considering the party is not poised to win veto-proof majorities in both chambers. Foes of the law have more realistic options to target it -- by defunding it in Congress or pursuing court challenges. And while 69% of the poll respondents said they think the overhaul will have a negative impact on business -- 65% said the same of Wall Street reform -- a clear majority also expressed a need for clarity in economic policy.

"They want the parties to work together, but they don't want major changes, whether that's new reforms or rolling back old ones," McGoldrick says.

Delivering the right message

Leaders of both parties are already signaling they intend to proceed carefully in the wake of the elections, acknowledging voters don't trust either side. President Obama, in an interview with National Journal this week, said no matter the outcome of the midterms, "the most important message that will be sent by the American people is, 'We want people in Washington to act like grown-ups, cooperate, and start trying to solve problems instead of scoring political points.'"

Senate Minority Leader Mitch McConnell (R-Ky.), told the same publication that Republicans will need to "have a humble, grateful response about this election," adding that "there is no polling data that suggests [the voters] love us."

Whether party leaders will make an earnest attempt to find common ground -- and how much room they're given by Tea Party-backed Republicans swept into power tilting against the political establishment -- will be a key question after the elections.

At the moment, according the poll, businesspeople and investors are optimistic about what it will mean for the economy. By a factor of two-to-one, respondents said they expect economic conditions to improve under divided government. And solid majorities expect businesses to dust off their stockpiled cash, with 56% forecasting increased capital expenditures and 60% seeing a rebound in hiring.

Such optimism is not unusual in the run-up to a midterm election. An analysis accompanying the poll notes that since 1960, the S&P 500 has posted modest gains in the two months before midterms and increased by an average of more than 7% in the three months afterward. This year, between Aug. 31 and Oct. 15, it gained 12%.

The poll was conducted online from October 11-14. To top of page