One morning in early September, I drove through Tyler with state representative Leo Berman looking for undocumented immigrants. About half a mile east of downtown, we found a group of perhaps ten or twelve men sitting under a small hackberry on a grassy hillside in front of a doughnut shop. “Here’s the illegals right here,” Berman said. “If you’d been here about three hours ago”—when contractors and foremen cruised by in their pickups, searching for day laborers—“you’d have seen a mass of people.” These few stragglers in blue jeans and ball caps were the overlooked or unlucky, or maybe just the late sleepers. In recent years this corner has become the hub of a growing community of immigrants living in the northeast part of town. Berman pointed out the bright-orange facade of La Michoacana Meat Market across the street and a newly opened Mexican bakery nearby. “Michoacana” refers to a person or thing from Michoacán, a state in southwestern Mexico. But in Texas, where the chain now has more than one hundred stores, it might as well mean “immigrants live here,” since the company chooses its locations using census data to find pockets of Spanish speakers. Tyler, with a population of about 100,000 residents, got its store about eight years ago.

Berman, a 75-year-old retired Army lieutenant colonel who grew up in New York and has represented Tyler for twelve years, said his constituents are fed up. “If you take away the economy, it’s the number one issue,” he said. Berman’s list of the evils of illegal immigration—the burden on taxpayers, the loss of jobs, and the threat of disease, crime, and drugs—will be familiar to anyone who has heard the Republican talking points on the failure of the Obama administration to secure our southern border. Less familiar is his take on who is standing in the way of the kind of tough response conservatives crave. “What people don’t understand is that it’s not just Democrats,” he told me. “It’s Republicans too.” Chief among them, according to Berman, is Speaker of the House Joe Straus. Berman blames Straus, who is from San Antonio, for bottling up the dozen or so immigration bills he filed last session, which would have, among other things, prevented the children of undocumented immigrants from obtaining birth certificates, made it a state crime to transport or conceal an undocumented immigrant, and required undocumented immigrants to live in so-called sanctuary cities—a thumb in the eye to city councils that forbid discrimination based on the immigration status of their residents. Not one of the proposals was even allowed a vote on the House floor. Though Straus denies it, Berman is convinced that he made a deal with House Democrats who supported him for Speaker: No immigration bills would see the light of day. “He sold us out,” he said. Berman, whose outspokenness on immigration has made him a champion of tea party conservatives, has announced his own candidacy for Speaker for the session that begins in January.

Even if House conservatives do manage to oust Straus, however, that won’t alter the deeper and more fundamental problem that immigration reform poses for the Republican party in Texas. Many of the party’s biggest funders, like Houston homebuilder Bob Perry, are captains of industries that employ huge numbers of recent immigrants, some with papers and some without. More than 40 percent of the roughly one million construction workers in Texas are immigrants from Latin America, so it stands to reason that Perry Homes, which builds thousands of houses a year in subdivisions across the state, is one of the largest employers of foreign-born workers in Texas. Perry is also the single biggest donor to Republican politicians and causes in Texas, including $380,000 to Governor Rick Perry and $335,000 to Lieutenant Governor David Dewhurst during the 2006 general election. Equally influential in Republican circles are prominent homebuilders David Weekley and his brother Richard, a founder of Texans for Lawsuit Reform, one of the most active PACs in state politics for the past ten years. Then there is Bo Pilgrim, whose chicken-processing empire is built in large part on foreign-born workers as well. Republican candidates for statewide office in Texas don’t launch campaigns without first making a visit to these four men, and no immigration bill ever escapes the attention of their lobbyists in Austin.

“I don’t care what Bob Perry or Bo Pilgrim has to say,” Berman said. “My constituents sent me to Austin to do the right thing.” What his constituents want, Berman says, is something that resembles Arizona’s controversial Senate Bill 1070, which directs local law enforcement officers to check the immigration status of anyone they suspect of being in the country illegally, a duty generally reserved for federal immigration agents. That worries the powers that be in the Republican party. It’s not just the disruption that a major fight over immigration would mean for the next session of the Legislature, where battles over budget cuts and redistricting are already looming. It’s also the prospect of the state’s biggest Republican donors squaring off against the party’s grass roots.

“That kind of issue is so disruptive to so many people on so many levels,” said Bill Miller, who is a principal at HillCo Partners, one of the most influential lobbying firms in the state and a frequent conduit for Bob Perry’s political donations. “It’s just not a good thing, and the few people who believe it is don’t have anyone’s interests at heart except their own.”

But the fight is going to happen, and it will get ugly, especially if an Arizona-style bill comes to the floor of the Senate, where voting rules have traditionally made it easy to quietly kill controversial bills. In late July, Houston senator Dan Patrick created a stir when he all but promised, in the course of a televised debate with Democratic senator Mario Gallegos, that the Republicans would override the Senate’s hallowed two-thirds voting rule—which requires two thirds of the members of that chamber to agree to debate a measure—to ram such a bill past the Democratic minority. One thing is for sure: When Berman and Patrick make their respective moves next session, Democrats may prove to be the least of their worries.

The national debate over illegal immigration has become so polarized that it’s hard to remember how close the country came to making genuine progress on the issue only a few short years ago. In 2006 Bob Perry, Bo Pilgrim, and a host of other industry leaders and prominent Republicans from Texas and around the nation lined up behind President George W. Bush’s effort to pass comprehensive immigration reform in Washington. “Neither the immigrants here today nor those we will need in the future should have to live in the shadows,” read a Dallas Morning News opinion piece signed by Perry and his fellow Republicans. “These are good people with good values doing work that we need done, reaching for the American Dream and helping make it a reality for all.” Bush’s proposal had something for everyone: increased border security for conservatives, a path to citizenship for undocumented workers already here, and an assurance of a steady labor supply for employers. Karl Rove toured the country to gin up support for the package, stopping in, among other places, Tyler, where he was joined by U.S. senator John Cornyn and several of the city’s largest employers, who endorsed the bill.

But that seems as long ago as the fabled “permanent Republican majority.” Bush’s effort foundered amid a rising tide of anti-immigrant sentiment bubbling up from the heartland—an organic, grassroots phenomenon that even Rove’s legendary political acumen failed to anticipate. With the emergence of the tea party movement, stopping illegal immigration (along with fighting taxes and reducing the size of government) has now become a central organizing principle for conservatives, one so powerful that even state-level politicians, who have no real say over the nation’s immigration policy, are compelled to offer at least some sort of legislative solution, however constitutionally dubious it may be. According to a tally by the National Conference of State Legislatures, 1,374 bills and resolutions dealing with immigration and refugees were introduced nationwide in the first six months of 2010. Arizona-type bills have been introduced in 22 states. In one sense it’s an unlikely time for the issue to catch fire: Illegal immigration has dropped dramatically since the recession began, in 2008. Declining birth rates in Mexico, meanwhile, have demographers predicting that we have already seen a peak in northern migration and that American employers may be facing labor shortages in twenty years.

Republicans in Washington can’t decide if the groundswell is a good or bad thing. They have been happy enough to hang the porous border around President Obama’s neck, hoping to ride the anti-immigrant wave to a new Republican majority in one or both chambers of Congress. Yet Rove, who has been telling anyone who will listen that the Arizona solution is bad for the Republican party’s long-term prospects, has found himself labeled an “establishment” Republican, a dirty word in the tea party era. “There is an anti-immigrant tidal wave crashing through the Republican party,” said state senator Eliot Shapleigh, an El Paso Democrat who for the past two sessions has led an informal working group—which includes some moderate Republicans—to track and defeat punitive immigration legislation. “I don’t know how a Republican elected official can stand against it.”

Carrollton Republican Burt Solomons very nearly drowned in that tidal wave last spring. Berman had blamed Solomons, a loyal Straus lieutenant, for bottling up his immigration bills in the State Affairs Committee, which he chaired last session. In the Republican primary, tea party conservatives backed Michael Murphy, a 37-year-old political consultant, to run against him, and he attacked Solomons on the immigration issue. Murphy came within a hair of ousting the sixteen-year incumbent. Murphy’s campaign was funded largely by Peter Morrison, a real estate developer who sat on the local school board in Lumberton, near Beaumont. Morrison publishes a conservative newsletter that has become widely read among a network of tea party–type groups across the state. After Morrison and fellow conservative David Barton, a former vice chairman of the Republican Party of Texas, urged their followers to get behind Berman’s Speaker bid, members of the House were inundated with faxes vilifying Straus. “People started calling me, saying, ‘Make it stop,’” Berman gleefully told me. “I don’t think Speaker Straus is going to be around much longer.”

Not surprisingly, Solomons tells the story a different way. “Leo Berman is a liar,” he said. “He couldn’t pass his immigration bills under [former House Speaker Tom] Craddick either. He makes up conspiracy theories to explain his own failures. The fact is, we had a uniquely divided House last session, and we could hardly get anything done.” Solomons seemed chastised by his brush with early retirement, however, and sounded more than convinced that this session was the time for tough action on immigration. “I think the lesson of the primary for me is that the electorate wants something done,” he said. He didn’t have much sympathy, he told me, for the arguments of homebuilders and growers who complain that rash action might kill the golden goose for the Texas economy. “Are they admitting that they can’t run their businesses legally?” he said.

Bob Perry declined to comment for this story, as did Bo Pilgrim and several other high-profile Republican donors. In fact, the voice of industry in Texas has been conspicuously silent, even as the issue has come to dominate the election season. “We’re monitoring the situation, but we have yet to gear up,” said Bill Hammond, the president of the Texas Association of Business. His take on the Arizona bill is the same as his position on state laws imposing sanctions on employers who hire undocumented workers: “We think it’s misguided for Texas to step in. It’s a federal problem that requires a federal solution.” The real turning point, according to Hammond, will come early in the session, when Patrick makes his move in the Senate, which is the ultimate hurdle for any immigration bill because of the power of the Democratic minority. If Patrick fails to get the two-thirds rule suspended, Hammond can rest easy. But if he manages to get a bill to the floor, then the gloves will have to come off. Bill Miller said the party’s big moneymen were watching closely, however quiet they may seem. “If they see this thing getting any traction,” he said, “they’ll pick up the phone and they’ll make it unmistakable where they’re coming from on this issue, which is, Are you guys out of your mind?”

When people talk about immigration in a place like Tyler, they are often talking about race, though they may not want to admit it. In the halls of the Legislature, however, the subtext of the immigration debate more often than not is wages. What the business community knows is that the face of manual labor is changing: Nationwide, 47 percent of jobholders without high school diplomas are immigrants, up from 28 percent in 1993. Spanish is now the language spoken on construction sites, and large-scale agriculture has always relied on a steady supply of migrant workers, at least half of whom are believed to be undocumented. Hammond’s constituents fear that any decrease in the size of the labor pool in Texas will eventually lead to rising wages, which is why the only acceptable outcome of immigration reform from the industry perspective is one in which the estimated 10 million to 12 million undocumented immigrants remain in the country under some legal aegis.

Organized labor in Texas supports this approach too, because the AFL-CIO can’t organize workers who are not here legally, and it sees low union membership as the real reason Texas wages remain stagnant, not immigration. Ed Sills, the communications director for the Texas AFL-CIO, said he considers himself to be on Hammond’s side in the fight. Still, he thinks Hammond and company are making a critical mistake by staying quiet and ceding the stage to the wing of the party represented by Berman. “They think they can get a short-term gain by letting the tea party forces dominate the discussion before the election,” he said. Then, after voter anger over immigration leads to anticipated Republican gains in November, they can worry about tamping down expectations for any major initiatives after the legislative session starts.

But once the genie has been let out of the bottle, who will do the hard and painful work necessary to get it back in? “I think there will be a price to pay,” Sills said. What happens, for example, if an Arizona-type bill does land on Rick Perry’s desk? Perry has skillfully deflected efforts to pin him down on this question, suggesting that an Arizona law is “not right” for Texas but not definitively saying he will veto it. Given that Texas will have a Hispanic majority as early as 2020, his misgivings are not hard to understand—what would it mean for the party’s future prospects if he signs it? “I think it would mean a serious setback of long duration,” Miller said. “If you want to do it and kill yourself, go right ahead. If you want to commit suicide, you know, pull the trigger.”

For now, the person with his finger on the trigger is Dan Patrick. In an interview at his Capitol office, Patrick, whose popular talk radio show has made him a standard-bearer for the party’s right wing, nevertheless took pains to distance himself from bomb throwers like Berman, who made national headlines when he called Obama “God’s punishment” on America at a rally last spring, or Berman’s House colleague Debbie Riddle, who infamously engaged Anderson Cooper in a discussion of “terror babies” on national TV. “I think I have shown that I am someone who can build a coalition and get bills passed,” Patrick said. But he is also someone who is not afraid to put his fellow Republicans on the spot. “The one thing that I would remind every Republican who serves in the Legislature is that 2012 is not far away, and the tea party, which I think is the best thing that has happened in my lifetime, is not going away, and this issue sure as heck is not going away,” Patrick said. “So if Republicans think, in the House or the Senate, that they can leave here next summer and go back to the voters in 2012 and say, ‘You know, we had the majority of the House by about ten or twelve votes, and we had the majority of the Senate by seven or eight senators, and we still couldn’t do anything about illegal immigration,’ then I think some of those Republicans are going to have some explaining to do.”

“They can’t just say, ‘Bob Perry wouldn’t let me’?” I asked.

Patrick was uncharacteristically tongue-tied, considering, perhaps, not just the prospects of his party but his own political future as well. “The bottom line,” he said finally, “is that there are no excuses.”