Obama Makes Peace With Business
A rush to make up after a bitter election. “A tactical shift," says an executive.
WASHINGTON —American big business leaders, from Wall Street to boardrooms around the country, backed Mitt Romney to the hilt in 2012, but they and President Barack Obama have rushed into one anothers’ arms in the wake of his re-election.
Business leaders are resigned to tax hikes and want a quick and clean resolution to the “fiscal cliff.” Obama is more than willing to accept their capitulation, and wants to avoid the substantial damage the business lobby proved it could do to his agenda during his first term, a time of tense relationships between the White House and business. This is a new alliance, and if an alliance of convenience, it’s one with the capacity to change the politics of Washington.
“I am passionately rooting for your success,” Obama said in remarks Wednesday to the Business Roundtable in Washington before a closed-press question-and-answer session, replacing October’s presidential rhetoric of demanding that the wealthy pay their “fair share” with new emphasis on the role of business in the economy.
“If the companies in this room are doing well, then small businesses and medium-sized businesses up and down the chain are doing well," he said to the group that represents the biggest American businesses.
Outlining the new efforts, White House officials said Obama has had three meetings with groups of CEOs, as well as many more informal meetings and calls with business leaders, in addition to speaking at the Business Roundtable — a group consisting of the leaders of some of the nation's largest corporations. He’s also hosted small business owners at the White House.
And in an interview Tuesday with Bloomberg — and outlet selected by the White House for its business viewership — Obama was asked by Julianna Goldman if he would bring a business executive onto his economic team.
“Not only is it something I'm considering, I'd love to do it,” Obama said.
(The administration also put Treasury Secretary Tim Geithner on CNBC this week to discuss fiscal cliff negotiations.)
“I think they would like the voice of business to be helpful in this and probably particularly be willing to say that we recognize revenue increases and tax increases are a part of that. I think there was a bit of an ask on that,” Arne Sorenson, the President and CEO of Marriott, told reporters following a meeting with Obama after Thanksgiving.
And even Romney supporters like Goldman Sachs CEO Lloyd Blankfein and FedEx CEO Fred Smith are finding their way into the White House’s good graces by publically expressing openness to higher rates.
“It is capital investment and equipment and software that’s the solution to our economic problems, not the marginal tax rates of individuals,” Smith said on CNN this week, in a talking point that earned top billing on a White House fact-sheet for undercutting congressional Republican arguments.
A White House spokesman singled out the help statements like those from Wal-Mart President and CEO Mike Duke, at pressuring Hill Republicans to come to the table.
The outreach to business is a marked shift from much of Obama’s first term, when his relationship with the business community frayed over Obamacare and Dodd-Frank.
Even Obama’s jobs council — which he created in 2011 from his Economic Recovery Advisory Board and includes a host of top donors — met just once in 2012, and three times in its inaugural year, much to the consternation of Republicans.
“They’re martialling the business community to talk about why we shouldn’t go over the cliff, which reflects the positive role the business community can play in Washington,” said one financial industry executive of the current efforts.
“It’s certainly a tactical shift, and it remains to be seen if it will morph into something more substantial and enduring,” the executive said.
White House officials say the reengagement isn’t necessarily the goal — it’s a means to a fiscal cliff solution — but a close relationship with business is something they’ve historically had difficulty achieving.
Obama martialed a small cadre of business leaders to help push through the stimulus, but the focus on financial sector regulation and health care reform erased the gains. Bill Daley was brought in as White House Chief of Staff in 2010 to mend the administration’s rocky relationship with the business world, an effort that never produced much. And during the campaign, much of the business community — even many supportive of Obama in 2008 — was solidly in Mitt Romney’s camp, funneling him hundreds of millions in donations.
And another close Obama aide has born some of the blame for the Administration’s rocky relationship with the business community: Senior adviser Valerie Jarrett. Jarrett’s defenders always argued that Obama’s policies, not Jarrett’s relationships, were at the core of the tension; and now several people inside the Administration and the business community credit the old hand for the new administration embrace of business.
“It’s all about the follow-up,” said one Romney-supporting executive who participated in the BRT meeting. “We all walked in there having had contact with Valerie, Geithner, or [Director of the National Economic Council Gene] Sperling, and everyone I’ve spoken to has heard from them since.”
Robert Wolf, a friend, bundler, and adviser to Obama and the former Chairman of UBS Americas, said the relationship between the business community and the White House is more robust now than at any point in the Obama presidency.
“The president wants the private sector to be involved, and they want a seat at the table,” Wolf said, saying businesses took away from last summer’s debt ceiling fight that they need to play a role in negotiations.
But also, undoubtedly the business community is trying to find away back into the administration’s good graces after a bitter election year.
“We have to find a way to work together with the White House if we want to be involved in this process,” said the BRT-participant.
Obama's decision to relax a self-imposed ban on accepting corporate cash for his second inauguration offers the business community a risk-free opportunity to get back in the president's good graces.
Wolf and White House officials described a persistent outreach effort to the business community — in which officials hold calls before and after meetings with Obama.
“It’s one thing to have a meeting and there is no action and there is no engagement after the meeting,” Wolf said. “Now we’re trying to keep everyone in touch to get this done — and hopefully work on the next issue together.”
The question of course is whether the White House and the various business constituencies — the best organized of which are Wall Street and the large employers represented by the Chamber of Commerce — will see their alliance of convenience survive the current budget talks.
Wolf said he is optimistic.
“They’re not just talking fiscal cliff, they are talking about ways to make the us more competitive going into 2013 — things like immigration, education, corporate tax reform, and tax policy that the president is making a priority,” said Wolf. “They actually align very well with what the private sector wants to participate it.”