WASHINGTON – Labeled antibusiness by Republicans and some corporate chiefs, President Barack Obama mounted a campaign to show he wasn’t. But his charm offensive has hit a rocky patch.
Business leaders gripe about burdensome new financial and health care regulations, what they see as unfriendly tax policies and vast government spending. They were put off by Obama’s harsh depiction of “fat cat bankers” and “reckless practices,” a label he applied both to Wall Street and to oil-spill giant BP.
Among the Obama policy detractors: JPMorgan Chase CEO Jamie Dimon, who supported Obama’s presidential bid but actively opposed his financial regulation overhaul. Not surprisingly, Dimon was not on the 400-strong guest list for the bill-signing.
White House aides dispute an antibusiness bias, noting that corporate profits are up 65 percent from two years ago. “The stakes are too high for us to be working against each other,” top presidential advisers Rahm Emanuel and Valerie Jarrett wrote to the U.S. Chamber of Commerce.
Reaching out to big business, Obama named more than a dozen top CEOs to a presidential Export Council, revived a Bush administration free-trade pact with South Korea and stumped aggressively for cutting taxes and increasing loans for small businesses. But it is noticeable that not a single former corporate executive is in his Cabinet or among his top economic advisers.
Friday’s dismal jobs report, showing unemployment stuck at 9.5 percent, further underscored the need for government and private sector cooperation to produce jobs.
Still, Obama has nurtured “an increasingly hostile environment for investment and job creation,” says Verizon CEO Ivan Seidenberg, chairman of the Business Roundtable. Thomas Donohue, who heads the U.S. Chamber of Commerce, sees a “cumulative job-killing impact of over-regulation” under Obama.
“The truth is that not even the Franklin Roosevelt administration was as hostile to and ignorant about free enterprise as this administration is,” declared magazine publisher and one-time GOP presidential contender Steve Forbes.
So far, Senate Republicans – echoing some of the same antibusiness complaints – have been able to block Obama’s small-business jobs bill, even though small business is a traditional core GOP constituency. Republicans claim the bill is misguided.
“This should be as American as apple pie,” Obama told a Democratic fundraiser in Austin, Texas, on Monday. “And yet we can’t get it moving through the Senate.” He speculated that Republicans were blocking the bill because they didn’t want to do anything to help him and were “thinking about the next election instead of the next generation.”
But Senate Republican leader Mitch McConnell of Kentucky shot back in a statement, “For more than a year and a half, the president and his Democrat allies on Capitol Hill have pushed an antibusiness, anti-jobs agenda on the American people in the form of one massive government intrusion after another.”
The current adversarial climate is being aggravated by November’s midterm elections. Both parties recognize that job creation has not been strong enough to push down an unemployment rate long hovering near 10 percent. And both recognize the vital role to be played by small businesses, which account for two out of every three jobs.
The new financial overhaul law – while not going as far as some Democrats wanted – and other new regulations along with the prospect of higher taxes irritated many financial and corporate leaders “and they’ve moved away from Obama,” said James Thurber, a political scientist at American University.
“Certainly, the campaign money has migrated away from the Democrats. And Wall Street will go with whomever helps them out the most,” Thurber said.
Obama must weigh whether he wants to anger bankers anew when filling the top job at the new Bureau of Consumer Financial Protection, created in the financial overhaul.
Consumer advocates and labor groups want him to pick Harvard law professor Elizabeth Warren, who now chairs the congressional oversight panel scrutinizing bank bailouts. But she has little support within the financial community and nominating her would risk a big Senate confirmation fight.
Of course, not all business leaders are negative and many have offered words of support.
UPS chief executive Scott Davis said Obama’s goal of doubled exports in five years would help “foster engagement in the global economy for small and large businesses.” And Ford CEO Alan Mulally said Obama recognizes that “for exports to grow we must ensure that market access for manufactured goods remains at the center of U.S. trade policy.”
Both Davis and Mulally are members of Obama’s new export panel.
Other CEOs have expressed frustration, not just with Obama but with stalemate in Washington.
Jeff Immelt, CEO of General Electric, complained that “government and entrepreneurs are not in sync.” He also decried lack of progress in formulating energy policy. “Our policy is uncertainty … I’d say status quo for this country is a losing hand.”
Obama brought former President Bill Clinton – generally seen as business-friendly – and Berkshire Hathaway CEO Warren Buffett to the White House to discuss job creation. The billionaire investor from Omaha supported Obama in the 2008 election but has since been sometimes critical of Obama’s handling of both the financial crisis and the Gulf oil spill.
While Obama says small businesses will “lead this recovery,” the National Small Business Association recently issued a report saying that more small businesses are unable to get financing than at any time over the past 17 years. Unless they can get the loans they need “we will continue to see high unemployment,” said NSBA President Todd McCracken.
Douglas Holtz-Eakin, a former Congressional Budget Office director who was 2008 GOP presidential candidate John McCain’s top economic adviser, said some of Obama’s economic overtures have merit, such as his push for doubling U.S. exports and vow to move ahead on the South Korea trade agreement.
But, he said, “I think Republicans are going to be skeptical until they see real action.” Holtz-Eakin said “the business community’s dismay” with Obama is driven by a sense that “he’s saying one thing and dead set on doing another.”