By Kevin Bogardus and Peter Schroeder - 01/12/11 12:20 AM EST
In his annual State of American Business address, Chamber President and CEO Tom Donohue said the economy is picking up steam and is in much better shape today than it was a year ago, though the recovery remains fragile and uneven.
“Last year, we worried about a double-dip recession,” Donohue said. “Today, we are cautiously optimistic recovery will continue and pick up steam as the year progresses.”
Donohue predicted that the economy would expand by 3.2 percent in 2011, creating between 2.4 million and 2.6 million jobs. Growth of that size could lead to a roughly 1 percent drop in the unemployment rate.
“There are many unanswered questions about regulations, taxes and other policies that must be addressed in order to unleash aggressive hiring by the private sector,” Donohue said.
The Chamber and the White House have feuded over the past two years. In his State of American Business address last year, Donohue blasted administration policies that he said were stifling economic growth.
Donohue sounded a different note on Tuesday, only a few months after massive Republican wins in the midterm elections brought divided government to Washington. The Chamber was a major player in those elections, backing mostly Republican lawmakers to serve as a brake on the White House.
“To be sure, November’s election results, the tax package, progress on the Korea trade agreement and a new tone coming out of the White House have addressed some of the business community’s immediate concerns,” Donohue said Tuesday. “Yet uncertainty among companies, lenders and investors still abounds.
“Our approach in Washington will be to call them as we see them. We’ll continue to have our differences with the White House on some issues, but we’ll work together on other issues. We’ll support the new House leadership on many occasions, and we’ll work with Democratic legislators as well, but no one should expect the Chamber to march in lockstep with anyone.”
In a press conference after his speech, Donohue offered praise for the White House’s staff reshuffling.
“I do think the new people will be helpful; Bill Daley is a real pro,” Donohue said, referring to the new chief of staff. “[National Economic Council Director Gene] Sperling has done this before, knows the people.”
The business-group leader said the disagreements with the administration over the past two years have “never been personal” and that his trade association has always had “a great respect” for Obama.
“I’m absolutely convinced that they are ready to move on trade and regulatory issues to do what it’s going to take to get people back to work,” Donohue said.
The business lobby fought hard against healthcare and financial services reform legislation pushed by Obama in 2010, then campaigned against vulnerable Democrats in the House who supported those initiatives.
The fights against those bills — now laws — will continue on the regulatory front, despite the warm words shared recently between the Chamber and the White House.
Donohue said in his speech that the Chamber would support House Republicans’ effort to repeal the new healthcare law. He said the large number of waivers granted to companies from the law shows it is “not totally workable” and should be replaced “with more effective and efficient measures.”
Donohue also said the business group is taking aim at regulations stemming from the new financial services reform bill. He called it a “regulatory tsunami” that will “wash over our capital markets.”
But the Chamber could prove to be a powerful ally on many of the Obama administration’s other initiatives this year.
The business group wants to see renewed investment in the nation’s infrastructure, for example, and has come out against a House Republican rules package that could change how the highway trust fund operates.
At the press conference, Donohue said the rules package would “break the highway trust fund,” adding, “I don’t think that is a very good idea.
“I’m not sure that some of the leaders in Congress and I are going to be in concert on what they are going to do,” Donohue said.
Trade is another area of common interest between the Chamber and the White House. Donohue promised in his speech to lobby hard for the passage of pending trade deals with South Korea, Colombia and Panama.
“We will pull out all the stops we can to help the administration to get the votes to pass these bills,” Donohue said.
The Chamber also seemed willing to compromise with the administration to help pare down the national deficit and is not ruling out tax hikes, if necessary, to achieve that goal. Obama’s debt commission was not able to reach a consensus last year on how to reduce the deficit, but the White House remains committed to bringing down the debt.
"The Chamber will support strong proposals even if we don’t like all the details,” Donohue said in his speech.
The sentiments of cooperation by both sides are a marked change for the relationship between the Chamber and the White House.
In the heated days before the election, the White House suggested the business group was using foreign-sourced money for its electioneering, a charge the Chamber said the administration offered no proof to support.
But relations have thawed since last November. The Chamber has praised the administration for working to pass the pending free-trade deal with South Korea, and praised Obama’s selection of Daley as his new chief of staff.
Obama is scheduled to speak before the Chamber next month as he seeks to improve his ties to business before his reelection campaign in 2012.
— This story was originally posted at 9:30 a.m. and was updated at 7:20 p.m.