It seemed like the beginning of a beautiful friendship — or at the very least a functional relationship.
In March 2009, with the United States on the brink of recession and the stock market at 12-year lows, President Barack Obama met with the Business Roundtable, an association of chief executives from top U.S. firms. The two sides said they would work together to rescue the economy and signaled openness to tackling long-term problems like tax reform and deficit reduction.
Obama hailed the “entrepreneurial spirit” of the CEOs and said his goal was “not to disparage wealth but to expand its reach; not to stifle the market,” but to help spur innovation.
Harold McGraw III, chief executive of the McGraw-Hill Companies and the Roundtable’s chairman, was equally effusive. “There’s a misperception, I think, in some people’s minds that the relationship between business and the Obama administration is like, well, oil and vinegar,” he said. “From our standpoint, that couldn’t be farther from the truth.”
Eighteen months later, oil and vinegar would be among the more polite ways to describe the state of the White House’s relationship with the business community.
In a speech last summer, the Roundtable’s chairman, Verizon chief executive Ivan Seidenberg, accused the administration and Democrats of creating a hostile environment for business. “By reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses,” Seidenberg said.
Business groups contend this uncertainty has led firms to keep $1.8 trillion in cash on the sidelines — money they might otherwise use to invest and hire.
While disagreeing with the criticism, the White House is willing to try to make nice. Reuters has learned that part of the administration’s post-election playbook will be to reset relations with the business community.
Several ideas are under consideration. One is to hold a “summit” on jobs and the economy in either late December or early January, led by Obama and including leaders of both parties as well as top business leaders.
In the meantime, the president will also make a highly visible gesture toward corporate America when he sets off on a 10-day trip to Asia this week. On his first stop in Mumbai, he will address a U.S.-India business summit that will include a delegation of more than 200 U.S. chief executives — everyone from Boeing Co’s Jim McNerney and Honeywell International Inc’s David Cote to General Electric Co’s Jeffrey Immelt.
His presence there could help the companies seal billions of dollars in deals. Part of the agenda is a meeting between Obama and the U.S. CEOs.
A big priority on the Asia trip will be ironing out remaining issues with Seoul on the U.S.-Korea free trade pact, something business has been clamoring for since the start of the administration.
There will be further outreach, though officials say much will depend on whether the newly strengthened Republicans are willing to work with the administration.
“The perception that the business community and the administration aren’t getting along is not productive for either side or for the economy and we see real opportunity for common ground on a number of policies,” said Austan Goolsbee, a longtime Obama aide who was recently promoted to become chairman of the White House Council of Economic Advisers.
Goolsbee said a big unknown is: “Is the Republican party going to remain in a stance of ‘If the president is for it, we oppose it?”‘
After Tuesday’s election, Obama was faced with the prospect of legislative gridlock. Republicans pushed Democrats decisively from power in the House of Representatives and strengthened their ranks in the Senate as voters vented frustration over the economy.
Now that the election is over, one idea that could gain traction is a payroll tax holiday to give consumers and businesses some extra cash. Obama had considered proposing it before the election but rejected it because of its cost. There is some openness at the White House to it now but much would depend on whether it seemed likely to gain bipartisan support.
Obama aides say they were frustrated that the economic package the administration offered in September — including tax breaks for companies and beefed-up infrastructure spending — received little to no backing from Republicans in Congress. They hope to enlist business support in reviving these ideas.
But mending the frayed relationship may need to come first.
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