By Sam Youngman and Ian Swanson - 10/11/11 09:20 AM EDT
President Obama’s attempt to strike a balance between firing up his liberal base and reaching out to business is leaving him in an awkward place.
Both efforts are designed to help Obama win a second term as president. The problem is that as Obama makes an appeal to one group, he risks losing the other, something that will be highlighted this week in a series of congressional votes.
Obama also needs to win a large share of independent voters, who were critical to his 2008 victory but shifted to Republicans in the 2010 midterms. The outreach to business is thought to appeal to these voters.
White House officials have repeatedly rebutted the popular notion that Obama is at odds with big business.
The administration said that the president is committed to helping business grow the economy and create more jobs, pointing to Obama’s 27-member jobs council to highlight’s the president’s business credentials.
The goal of the jobs bill, a senior administration official said, is the goal both of big business and the Democratic base: Create more jobs.
“The business leaders on the Jobs Council are working with the White House to put more people back to work, strengthen our economy and win the future,” one administration official said.
But even White House chief of staff Bill Daley, brought on in part to smooth over tensions between Obama and big business, recently joked that the relationship continues to be strained.
“It’s going great,” Daley said jokingly — and with a touch of sarcasm — to CBS’s Norah O'Donnell at a summit in Washington last week. “Can’t you tell — I mean, you know things are going really great. The debt ceiling was no problem and the business community loves us, and they love the rhetoric — there are just no problems.”
Congress is poised this week to approve three long-stalled trade agreements, with South Korea, Colombia and Panama, that would serve as major victories for the president’s pro-business credentials.
The South Korea deal would be the largest trade agreement ratified by the U.S. since the North American Free Trade Agreement with Mexico and Canada, and has long been sought by financial-services firms eager to get into that country.
But to the left, the deals are another reason to be disappointed with a president whom many liberals feel has compromised too often with the GOP and business.
The deals were negotiated by the Bush administration, and a vote on the Colombia deal was blocked by then-Speaker Nancy Pelosi (D-Calif.) in 2008. Labor unions oppose all three deals and despise the agreement with Colombia, which labor argues has not done enough to counter violence against union organizers.
In another possible fight with labor, Obama is not offering strong support for a Senate measure to punish China for lowering the value of its currency, something unions say lowers the price of Chinese products, costing the U.S. thousands of jobs.
Legislation that could lead to tariffs on Chinese imports is expected to be approved by the Senate this week, though it might not go anywhere in the GOP House. It will also not win a White House endorsement.
Obama last week offered caution, saying that while China was clearly “gaming” the trading system with its currency, the Senate legislation might be ineffective and lead to a case against the U.S. in the World Trade Organization. He also said that could lead to new tariffs on U.S. exports.
“I think we’ve got a strong case to make, but we’ve just got to make sure that we do it in a way that’s going to be effective,” Obama said.
How much of a difference Obama’s actions on trade will make in terms of business support for the White House is an open question.
While the trade agreements are a big deal, the debate over the jobs package — and how to pay for it— is a bigger political issue. And here, Obama is on the opposite side of business.
The president has adopted a populist tone in arguing that business and wealthier households should shoulder the cost of paying for a jobs bill. Obama initially called for the rolling back of tax breaks for families with annual income above $250,000 to pay for the plan, in addition to using higher taxes on oil and gas companies. On Thursday, he shifted his support to the 5.6 percent surtax on millionaires that Senate Democrats would use to pay for the jobs bill.
The messaging on the surtax has been music to liberals’ ears, but business groups have reacted with distaste.
In an op-ed in The Wall Street Journal, U.S. Chamber of Commerce President Tom Donohue slammed Obama for not paying for the jobs bill by cutting spending. He said Obama was asking that “successful small businesses, productive industries and those Americans most capable of investing in growth … foot the bill through major tax increases.”
“Any jobs that might have been supported by other measures in the plan would be more than wiped out by these tax hikes,” Donohue wrote.