Opinion | Pat Toomey, a Free-Market Champ, Exits the Senate

Elected as an insurgent in 2010, Mr. Toomey later found himself watching a populist tide that often favored bigger government. A Journal editor asked him in February 2016 if

Donald Trump

could win Pennsylvania. With a look of alarm, Mr. Toomey replied that Mr. Trump would lose and take the Republican ticket down with him. Messrs. Trump and Toomey both won that year, but the prediction came true in 2020 and 2022, when independent and suburban voters swung toward

Joe Biden

and Mr. Fetterman.

Pennsylvania wasn’t unusual in that regard. Democrats also held Senate seats this year in Arizona and Georgia, which had gone Republican in 2016 but flipped to Mr. Biden in 2020. Nationwide, independent voters in key House races favored Democrats, resulting in a thin Republican majority instead of the red wave many observers expected. The losers were often unconventional candidates backed by the former president.

“I couldn’t imagine a clearer data set of ultra-pro-Trump candidates and conventional Republicans running at the same time in the same places,” Mr. Toomey says during a recent visit to the Journal editorial board. “Everywhere, the conventional Republican outperformed the pro-Trump, often by huge margins.”

Doug Mastriano,

who won the Republican primary for Pennsylvania governor with Mr. Trump’s endorsement, was trounced by Democratic Attorney General

Josh Shapiro.

By Mr. Toomey’s lights, Mr. Mastriano dragged down the Republican Senate nominee, celebrity physician

Mehmet Oz

(who also had Mr. Trump’s endorsement in the primary). “I thought, actually, that Dr. Oz was a pretty good candidate and ran a pretty good campaign,” Mr. Toomey says. “He got just pounded in the primary, and I don’t know that he had a chance to win when the top of the ticket’s losing by 15 points.”

When Mr. Toomey was elected to the House in 1998, he joined a sizable contingent of like-minded conservatives who supported free markets and trade, including Ohio’s

John Kasich

and

Rob Portman,

Oklahoma’s

Tom Coburn,

Wisconsin’s

Paul Ryan

and Texas’ Kevin Brady—all of whom will have retired by next month. Although longstanding divisions within the GOP over trade and immigration persisted, Republicans largely backed pro-growth economic policies. During Mr. Toomey’s six years in the House, Republicans cut personal-income taxes across the board, including for capital gains and dividends. They gave

George W. Bush

trade-promotion authority, which resulted in trade agreements with 16 countries.

In 2004 Mr. Toomey took on the GOP establishment by challenging liberal Sen.

Arlen Specter

and came within two points of winning the Republican primary. After leaving Congress in 2005, Mr. Toomey became president of the free-market Club for Growth. Specter avoided another challenge from Mr. Toomey by switching parties in 2009—then lost the Democratic primary the next year. Mr. Toomey won election in 2010 as tea-party Republicans flipped control of the House and picked up six Senate seats by campaigning against the Democrats’ 2009 stimulus, ObamaCare and Dodd-Frank Act.

Twelve years later, the tea party is over. Many Republican lawmakers elected in 2010 now support a bigger welfare state and more government intervention in the private economy and are increasingly hostile to free trade. What happened? In two words, Donald Trump.

“He contributed a lot to that—his hostility to trade, his populism,” Mr. Toomey says. “I’m afraid that there are colleagues of mine who have clearly decided their path forward is not the historical, conventional limited-government, free-market, economic libertarian lane, but rather this populist lane.”

As an example, he cites Sen.

Bernie Sanders’s

amendment to the railroad union contract that would have provided employees with seven days of sick leave—six more than the deal the Biden administration helped arbitrate. Although the amendment failed to win the 60 votes necessary for passage, six Republicans supported it: Mike Braun (Ind.), Ted Cruz (Texas), Lindsey Graham (S.C.), Josh Hawley (Mo.), John Kennedy (La.) and Marco Rubio (Fla.).

“I knew you were a socialist,” Mr. Sanders quipped as he gave Mr. Cruz a fist bump on the Senate floor. Mr. Cruz answered him on Twitter: “Nope. I’m not. I just don’t agree with Biden & the Democrats voting to screw the union workers.” The vote underlined how many Republicans who say they support free markets are making common cause with organized labor.

“It’s unbelievable to me that Republicans voted for that, but they did,” Mr. Toomey sighs, adding that the policy fractures between populist and free-market conservatives are growing.

Many Republicans favor increasing the child tax credit, which is now partly refundable and thus amounts to a welfare program, and don’t mind higher taxes on corporations—a divide he had to breach while negotiating the 2017 tax reform. He worries that Republicans in the next Congress will trade a big increase in the child tax credit for an extension of some of the 2017 tax cuts, many of which expire in 2025.

He also worries about a populist turn toward isolationism. “We’ve got some voices that have been increasingly skeptical about aid to Ukraine,” he says. “The traditional coalition is going through some tense moments.”

As for the economic populist groundswell on the left, Mr. Toomey doesn’t see it receding anytime soon. He doubts Mr. Biden will run for re-election and expects a primary challenge if he does: “I just find it hard to believe that the party’s all going to fall in lockstep behind him.”

Despite the GOP’s ideological fissures, Mr. Toomey hopes that the new Republican House majority can use its appropriations power to rein in Biden regulators such as

Gary Gensler

at the Securities and Exchange Commission and

Lina Khan

at the Federal Trade Commission.

“One of the things that just keeps gnawing at me is Democrats insist that they are the party that’s defending our democracy,” he says. “Obviously, they mean that Donald Trump is a threat to the democracy. But what I think is a much more profound undermining of our democracy is they want everybody else to do the work of Congress, whether it’s the courts or regulators.”

Mr. Toomey led the fight to defeat

Sarah Bloom Raskin,

Mr. Biden’s nominee for Federal Reserve vice chairman for supervision. He says Ms. Raskin supported using banking regulation “to accelerate a transition to a low-carbon economy because that’s the outcome they want,” even though “it’s a completely undemocratic and unaccountable process to get there.”

As another example, he cites Mr. Gensler’s cryptocurrency power grab. The SEC chairman has taken the position that cryptocurrencies, save for Bitcoin, are securities. “He won’t even explain what is different about Bitcoin,” Mr. Toomey notes; nor will Mr. Gensler say “how an exchange, for instance, would comply with the regulatory regime that he claims to have authority over.”

In his final weeks in office, the senator is introducing legislation for regulating stablecoins, which are cryptocurrencies with a fixed peg to the dollar or another currency. This month he unveiled a bill with Massachusetts Sen.

Elizabeth Warren

that would subject Fed regional banks to the Freedom of Information Act.

“I’ve been in a two-year-long battle with the Fed over several things,” he says. “One is their tendency to wander and stray from their mandate into uncharted waters. The other is just their refusal to provide basic information about what they’re doing, such as their process on master accounts,” which provide direct access to the central bank’s payment and settlement systems.

Many of Mr. Toomey’s legislative proposals have bipartisan support, but they get stymied because the chamber’s rules let one member block a vote on amendments. “If I want to litigate something, I need all 99 other senators to give me permission to litigate it,” he says. That rarely happens nowadays, “so very little gets done.”

His idea to break the gridlock: “What if we raise the threshold from one to some number greater than one in order to block an amendment? Maybe it’s 20. Maybe it’s 30,” he says. “This doesn’t have a partisan angle. There’s a lot of Democrats that feel very strongly about having the opportunity to offer amendments.” Even they may end up missing Mr. Toomey, who demonstrates that a Republican without a pugilistic attitude can be an effective fighter.

As for his fellow Republicans, Mr. Toomey is hopeful that Mr. Trump’s hold on them is weakening. He thinks the former president hurt himself by nicknaming Florida’s governor, a potential 2024 rival, “Ron DeSanctimonious.” “Nobody had a reason to dislike DeSantis,” Mr. Toomey says. “Everybody liked the fact that he was a fighter. He’s seen as aggressive, effective, and he wins big. It’s a reminder of Trump’s petty vindictiveness that isn’t really terribly appealing.”

The senator takes heart from some of the speeches he heard at the Republican Jewish Coalition’s postelection annual leadership meeting last month: “I would say that 18 months ago, I don’t think you would have had the parade of folks we had at the event in Las Vegas saying the things they were saying, but they felt comfortable saying it.” Many Republicans “were making it pretty clear they’re going to run against Trump, and that it’s time to move on from Trump.”

Nikki Haley,

Mr. Trump’s ambassador to the United Nations, said last year that she wouldn’t seek the presidency in 2024 if he did. But at the Las Vegas event she said she was considering a run in a “serious way.” Gov.

Chris Sununu

—who easily won re-election while Trump-backed

Don Bolduc

lost New Hampshire’s Senate race—said the state’s voters were “open to alternatives” to Mr. Trump.

“I think that tells you their perception of how the party has shifted,” Mr. Toomey says. “If they’re willing to openly challenge the guy that they would not have challenged 18 months ago, I think it’s also possible that we’ll have a gradual re-embrace of tradition”—meaning free markets, free trade and small government.

Asked who might lead such an effort, he names Tennessee’s

Bill Hagerty,

Wyoming’s

Cynthia Lummis

and Oklahoma’s

James Lankford.

But come January, they’ll have to do without the help of the junior senator from Pennsylvania.

Ms. Finley is a member of the Journal’s editorial board.