The U.S. Chamber of Commerce said President Barack Obama’s administration has “vilified” businesses, and the president’s aides fought back with a vow not to settle for lax regulation of banks and oil companies.
The exchanges waged across Lafayette Square in Washington yesterday reflect renewed confrontation between the Chamber, the largest U.S. business lobbying group, and an administration that has sought to defuse corporate opposition to its regulatory policies.
The Chamber held a “Jobs Summit” to promote its views and sent Obama a letter saying the cooperative efforts that produced stimulus legislation early in 2009 have given way to confrontation over tax and regulatory policies that risk pushing the economy into a double-dip recession.
“Instead of continuing their partnership with the business community and embracing proven ideas for job creation, they vilified industries while embarking on an ill-advised course of government expansion, major tax increases, massive deficits, and job-destroying regulations,” the Chamber said in the letter.
White House Chief of Staff Rahm Emanuel and Senior Adviser Valerie Jarrett responded hours later with their own letter, saying weak regulation during President George W. Bush’s administration led to the financial crisis that threw the economy into the worst decline since the 1930s.
Emanuel and Jarrett wrote the Chamber that they were “surprised and disappointed” by the group’s rhetoric. The administration has focused “every single day” on creating jobs and wants to work with business to do so, the aides said.
Economic, Environment Crises
“We will not, however, accept the lax regulation of the financial industry that led to the greatest economic crisis since the Great Depression,” they said in the letter. “And we will not stand by while oil and gas companies continue to fight needed changes to outdated regulations that are partially responsible for one of the worst environmental crises in American history.”
Obama hosted his own meetings with business leaders at the White House yesterday. He discussed the economy with Berkshire Hathaway Inc.’s Warren Buffett, who was an adviser to Obama’s presidential campaign.
Obama, Vice President Joe Biden and former President Bill Clinton also conferred separately with Bank of America Corp. Chief Executive Officer Brian Moynihan and Honeywell International Inc. Chairman David Cote, according to White House spokesman Robert Gibbs.
‘Eye Off the Ball’
The Chamber, which spent more than $30 million lobbying this year, believes the prospect of pending health, financial, environmental and other regulations is stifling business spending and curtailing the economic recovery, Tom Donohue, the organization’s president, said at its conference.
Congress and “the administration took their eye off the ball,” Donohue said. “They embarked on a course of rapid government expansion, major tax increases and suffocating regulations -- going well beyond what had to be done to keep the economy out of a depression.”
Efforts by the administration to overhaul health care, Wall Street and oil regulations has led to companies being “demonized,” Donohue said.
Another business group, the Financial Services Roundtable, expressed similar concerns today about Obama’s approach.
“The administration and others went way too far in their highly negative and volatile rhetoric against the financial industry,” Steve Bartlett, president of the group, told reporters in Washington. “It doesn’t help the economy.”
Stan Anderson, managing director of the Chamber’s Campaign for Free Enterprise, said the group wants the government to raise revenue without increasing individual taxes, such as reinstituting a tax holiday on corporations’ overseas income. A 2004 tax holiday let companies that stockpiled dollars overseas bring the money into the U.S. at a rate of 5.25 percent instead of the 35 percent they otherwise would owe.
The Chamber also is urging sales of minerals and timber on government land, which it says could raise more than $1 trillion.
The organization wants Obama to support continuing the tax cuts enacted under Bush in 2001 and 2003.
The cost of extending the cuts for the most prosperous Americans would be about $55 billion for a year. Obama campaigned for the presidency saying he would preserve middle- class tax cuts while letting taxes on the rich rise to previous levels.
One of the best things Obama could do for the economic outlook would be to declare today that those taxes will not be raised until the economy is back at full health, Donohue said.
“In one bold move, this would substantially boost investor, business, and consumer confidence and infuse our economy with fresh momentum,” he said.