Obama's latest charm offensive with CEOs pays some dividends

Obama's latest charm offensive with CEOs pays some dividends

President Obama is mounting his most concerted charm offensive yet toward the business community as he strives to build support for a debt deal and, more generally, assuage concerns that he is disdainful of corporate interests.

A meeting Wednesday with a group of leading CEOs at the White House was only one manifestation of an ongoing effort to ease the distrust that marked interactions between the administration and commerce during Obama’s first term.

There are some signs that the push is working, at least in terms of improving the mood music.

After the White House meeting, Marriott CEO Arne Sorenson praised the White House as “resoundingly reasonable” in its approach to the "fiscal cliff" negotiations. The sentiment was particularly notable because Sorenson had donated to Mitt Romney’s campaign and to the Republican National Committee during this year’s election cycle.

Joe Echevarria, the CEO of Deloitte, told reporters that Obama “clearly wanted to embrace business and all business leaders.”

The warm words are in stark contrast to the tensions that marked Obama’s initial White House tenure. 

Obama angered some on Wall Street by making reference to “fat cat bankers” in a 2009 interview with CBS’s “60 Minutes.” The U.S. Chamber of Commerce complained the following year, in an open letter, that the president and his congressional allies had “vilified industries.” 

Last year, 3M CEO George Buckley called Obama “anti-business.”

There have been previous efforts to reset the relationship but they ran aground, especially as the 2012 campaign approached. Some business leaders leaned toward the GOP, and the Obama campaign struck a populist tone, attacking Romney for his corporate record with Bain Capital.

The latest effort may have more chance of success, in part because Obama and big business now have a confluence of interests. Both want to avoid the damaging economic consequences that would be produced via a national tumble over the fiscal cliff. 

"The president believes that there are significant economic consequences in this debate," said a senior administration official.  "So making that case to business leaders makes a lot of sense because they have a lot at stake." 

Further down the line, the administration and big business could find more tracts of common ground on issues including immigration reform and tax reform.

For the moment, the focus is on a deal to avert the spending cuts and tax increases looming at the start of the new year — and the noises are positive.

“I think there is uniform agreement on the fiscal cliff, among the financial services sector and the broader business community. We need to avoid the consequences of inaction,” said Scott Talbott of the Financial Services Roundtable. “Since we are all in the same boat, it is an opportunity.”

A spokesperson for the Chamber agreed.

“Chamber members have been involved in many meetings with the administration in the past few weeks, and there are more meetings scheduled, as the business community continues to urge Congress and the administration to work together to avert the fiscal cliff and address all the economic components that would lead to a 'Big Deal' next year,” the spokesperson said in an emailed statement.

The new constructive tone is striking not just because of the mutual skepticism evident in the relationship during Obama’s first term, but also because of the opposition by many of the corporate groups to the president's legislative agenda. The Chamber, for example, reportedly spent well over $50 million to oppose Obama’s healthcare reform package in 2009 and early 2010.

But not all businesses are on board for a detente with the administration. Even while the CEOs of major corporations enjoy the attentions of the White House, small-business owners feel left out, according to Dan Danner, president of the National Federation of Independent Business.

“I think some of the large corporate community may feel that they have a better relationship [with the administration] but the majority of small businesses don’t feel they have much of a relationship at all,” Danner said. “They have not been at the table, they’ve not been invited. Their significance in terms of the economy and jobs is either disregarded or misunderstood.”

It is not just invitations to the White House that are at issue. Key policy proposals would have a markedly different effect on major corporations as compared against small businesses. 

Most notable among these is Obama’s signature goal in the fiscal cliff talks: to have taxes rise on income above $250,000. In the grand scheme of things, the shift would have little detrimental effect on the fortunes of corporations. But for small-business owners who often declare their business profits as personal income, it could be a very different story.

In the wake of Wednesday’s White House meeting, Echaverria said that Obama had stoutly defended the need for higher taxes at the top end of the income scale and that the CEOs had voiced no real opposition.

They were, instead, "supportive as part of a bigger solution. This by itself isn't the solution, but as part of a broader solution, there was a sense that if that's what it takes ..." 

He added: "Will 5 percent more change my lifestyle? No, it won't." 

Danner said his members see things very differently.

“Rhetoric is easy but it is policies that count," he said. "What we see right now is a commitment to raise taxes on a lot of small businesses and no seeming discussion of how those aren’t rich people. In the regulatory arena, what our guys see is a regulatory avalanche.”

The whole issue of regulation tends to be looked at too crudely, according to Matthew Mitchell of the Mercatus Center at George Mason University. He asserted that the increase in regulation in recent years — which he noted had characterized all recent presidencies, not just Obama’s — often served to help big business at the expense of smaller competitors, entrepreneurs and even other industries.

“Regulations have imposed greats costs on some but given great benefits to others,” Mitchell said. “Look at the health insurance industry: How great for them to have the federal government ensure they have customers.”

Obama’s record, he added, “isn’t so simple as ‘pro-business’ or ‘anti-business.’ Regulations almost always create winners and losers.”

Still, when it comes to the big picture, there are some grounds for optimism.

Matt Bennett of the center-left Third Way organization said that the relationship between the White House and business “got pretty dismal for a while.” 

But, he added, “victory has a way of changing certain attitudes. I do think the relationship is improving. The whole relationship is up and down but it is on an upswing.”

However, he cautioned that a failure to reach a debt deal could change all that in an instant.

“If it ends in acrimony and disaster, he said “fingers will point in every direction.”