President Obama will address the Business Roundtable (BRT) on Wednesday as he works to get corporate leaders on his side during this fall’s fiscal showdowns with the GOP.
The White House is hoping that Obama can rally the influential organization, made up of conservative chief executives from the nation’s largest corporations, to help build pressure on congressional Republicans.
According to a White House official, the president will ask business leaders "to help send the message to Congress that a default would be disastrous for our economy and for businesses across the country."
"Some Republicans in Congress are playing a reckless political game by threatening to leave the economy hanging in the balance for an ideological agenda that has no chance of becoming law—a game that last time had real consequences, hurting growth and business confidence," the official said.
Obama is expected to note that during debt ceiling negotiations in the summer of 2011, the stock market decreased 17 percent, the nation's credit rating was downgraded, and consumer confidence dropped to its lowest level since the financial crisis. He'll argue to the assembled corporate executives that failure to strike a deal would again endanger the economy — and their bottom lines.
“The president’s focus, as is always the case when he meets with this group, is what we can do together to keep the American economy growing,” White House press secretary Jay Carney said on Tuesday.
But the sell will not be an easy one — the association’s officials have been critical of the president, and members of the group are wary of the administration’s aggressive regulatory push on labor and environmental issues.
And congressional Republicans are accusing the president of employing "scare tactics" to gain leverage.
"No one is threatening to default," said Brendan Buck, a spokesman for House Speaker John BoehnerJohn BoehnerRyan delays committee assignments until 2017 Lobbying World 'Ready for Michelle' PACs urge 2020 run MORE (R-Ohio). "The president only uses these scare tactics to avoid having to show the courage needed to deal with our debt crisis. Every major deficit deal in the last 30 years has been tied to a debt limit increase, and this time should be no different."
Obama has leaned on the organization in the past. Shortly after the president’s last visit in December for a speech and closed-door discussion, the CEOs sent a letter to congressional leaders arguing all options — including tax increases — should be on the table as negotiators sought a “fiscal-cliff” deal.
That gesture, a reversal from the group’s stance just five months earlier, ratcheted up pressure on congressional Republicans. The GOP subsequently stumbled, and Obama struck a deal that many Democrats embraced.
The group has also proven a valuable ally on immigration reform, voicing support for a plan championed by the White House as it wove its way through the Senate. Earlier this summer, Motorola chief executive Greg Brown sent a letter to every member of the House imploring them “to make successful consideration of immigration reform a top priority.”
Carney said Tuesday that, during the meeting, the president would solicit ideas for how the White House and business community could work together “to move forward on comprehensive immigration reform, which has enormous economic benefits for the country and for the middle class in which, I think, many of those affiliated with the Business Roundtable would support.”
Recruiting the business community, a core constituency of the Republican Party, to help lobby for a budget deal is a shrewd move on the part of the White House, said Princeton University Professor Julian Zelizer.
“A lot of business has not been happy with the constant use of the debt ceiling as a political weapon. They certainly want stability in the economy and see how it undermines that,” Zelizer said. “It enables Obama to pit business against the Republican Party.”
But the strategy carries its fair share of risk. Roundtable President John Engler, the former Republican governor of Michigan, has not been shy in criticizing Obama.
White House visitors logs show Engler cleared into the White House more than two dozen times for meetings with the president, top adviser Valerie Jarrett and Treasury Secretary and former Obama chief of staff Jack LewJack LewOvernight Finance: House GOP plans short-term spending bill | Senate Republicans not happy | Yellen intends to finish term Lew: Don't paint Wall Street execs with 'broad brushstroke' Dumping Obama’s faux foreign tax legislation should be high on Trump's to-do list MORE, among others.
But during the 2012 presidential campaign, Engler warned that Obama’s focus on the richest Americans was alienating business leaders.
“The president is not as strong as he was four years ago. I think he had a lot of support,” Engler said at a breakfast meeting sponsored by The Christian Science Monitor. “I think he is trying to win that back. But if it is going to be the 1 percent against the 99 percent, it is going to be very hard to do that.”
The president’s overtures to the business community come at a time when liberals are wary of Obama aligning himself too closely with Wall Street.
Over the weekend, former Treasury Secretary Lawrence Summers removed his name for consideration for chairman of the Federal Reserve after Democrats on the Senate Banking Committee signaled that his corporate ties were a liability.
“There’s always a risk, and particularly at a moment that liberals are feeling a little energized,” said Zelizer.
Labor unions will be watching Obama’s courtship of the BRT very closely. In recent months, the administration has agreed to postpone the employer mandate of ObamaCare for one year while rejecting labor’s lobbying on how the landmark healthcare reform law should be implemented.
The White House Tuesday worked to preemptively squash any notion that the president could be seeking advice on his Fed chair choice while meeting with the Roundtable executives.
“I would not anticipate that the president will be having, you know, conversations about personnel matters,” Carney said.
The president also risks reinforcing perceptions that he caters more to the interests of corporations than small businesses. The White House drew the ire of the National Federation of Independent Business (NFIB) earlier this summer when proposing an overhaul of the business tax code, which the small-business trade group said unfairly benefited big corporations.
At the time, the NFIB slammed Obama for offering a “corporate-only approach to tax reform [that] will ensure that small business shoulders a much greater tax burden than mega-corporations that have been gaming the system.”
Groups like the BRT were more measured, saying they agreed with the president’s proposal to lower overall rates but believed it should be done in a revenue-neutral manner.
--This report was originally published on Tuesday at 7:45 p.m. and was last updated on Wednesday at 6:00 a.m.