President Barack Obama said he and 20 company executives made “good progress” during a four and a half hour meeting toward establishing closer cooperation between government and business to accelerate the U.S. economic recovery.
“We focused on jobs and investment, and they feel optimistic that by working together we can get some of that cash off the sidelines,” Obama said as he left the session yesterday, referring to the almost $2 trillion that he said companies have amassed.
The meeting with business leaders, who included UBS AG (UBSN) Chairman for the Americas Robert Wolf and Honeywell International Inc. (HON) Chairman David Cote, was part of the administration’s campaign to heal a strained relationship with the business community and to collaborate on ways to boost jobs, with the nation’s unemployment rate at 9.8 percent.
Held at Blair House, across Pennsylvania Avenue from the White House, the executives and administration officials conferred on issues such as tax overhaul, education, exports, regulation and the budget deficit, as well as ways to encourage businesses to spend and invest. While Obama has held dozens of meetings with business-leaders during his term, attendees said they expected more follow-up from yesterday’s summit, either from the president himself or top aides.
Executives said it was critical that the administration continue the dialogue.
“This meeting is not episodic; we think it will be continual,” Motorola Inc. Co-CEO Greg Brown said in an interview with Bloomberg Television. “We agreed on a number of us engaging on different issues within the administration. It’s not about optics, it’s about delivery and we are all very focused on that.”
Obama is generating more optimism among CEOs after a series of business-friendly overtures, including a deal to extend tax cuts enacted in 2001 and 2003 and efforts to boost exports such as a U.S.-South Korea free-trade agreement and a loosening of controls on some technology sales.
The administration has been seeking to strengthen relationships with the business community following criticism from some executives and business groups, such as the U.S. Chamber of Commerce, of the administration’s overhaul of the health-care system and financial regulations. Obama said private companies are crucial to the U.S. climbing out of the worst recession since the Great Depression.
“Things were said on both sides that shouldn’t have been and did not further the opportunity to work together,” Honeywell’s Cote said as he arrived at Blair House yesterday. “This is our chance to do that. I give the president a lot of credit for being the man big enough to say ‘Let’s restart, let’s work on how do we create a more vibrant economy.’”
Obama began the meeting with a message to the corporate leaders, saying they represent why the U.S. is unique, what is best about the country’s entrepreneurial spirit and that he wanted to dispel any notion that his administration wanted to inhibit their success, according to one person in the room.
The president asked the executives for examples of policies that weren’t working. One idea was to cut tax rates on accumulated foreign earnings that are repatriated to the U.S. like Congress authorized for one year in 2004, according to participants in the room.
While Obama has called on the CEOs to spend the $2 trillion in cash their companies have accumulated on job creation, the executives said much of that is earnings from overseas sales that are retained abroad to avoid paying U.S. corporate income tax. U.S.-based multinational corporations pay corporate income tax on earnings when they are brought back to the U.S. If the revenue remains abroad, either in cash or investment in overseas facilities, the money isn’t taxed.
Obama said he would consider the issue and asked what the executives would be willing to give up in other corporate tax rates to make sure it remains revenue neutral.
The executives also brought up the issue of U.S. global competition. With respect to China specifically, they asked Obama to ensure trade goes both ways, attendees said.
Twenty executives took part yesterday’s session, which was closed to the press. Along with Wolf, Cote, and Brown, those invited included Google Inc. (GOOG) CEO Eric Schmidt, Intel Corp. (INTC) CEO Paul Otellini and Comcast Corp. (CMCSA) CEO Brian Roberts. Other CEOs attending were DuPont Co. (DD)’s Ellen Kullman, PepsiCo (PEP) Inc.’s Indra Nooyi, Dow (DOW) Chemical Co.’s Andrew Liveris, Cisco Systems Inc. (CSCO)’s John Chambers, Kenneth Chenault of American Express Co. (AXP), Duke Energy Corp.’s James E. Rogers, NextEra Energy Inc.’s Lew Hay and Eli Lilly & Co. President and CEO John Lechleiter.
A number of the executives at the meeting serve on several of Obama’s outside advisory boards, including Wolf; Cote; Boeing Co. CEO James McNerney; General Electric Co. (GE) Chief Executive Officer Jeffrey Immelt; United Parcel Service Inc. (UPS) CEO Scott Davis; Penny Pritzker, who led Obama’s campaign fundraising effort and is chairman of Pritzker Realty Group; Mark Gallogly, founder and managing partner of Centerbridge Partners LP; and venture capitalist John Doerr, a partner at Kleiner Perkins Caufield & Byers.
After the meeting, Boeing’s McNerney said Obama told the executives that the administration is committed to pursuing free-trade agreements that would increase U.S. exports and jobs. Obama set a tone for the meeting that “we’re all in this together,” McNerney said on Bloomberg Television.
Executives at the meeting agreed with the president’s assessment that the two sides made progress.
“It’s important for business and government to be able to work together,” Cote said. “I came away feeling very good.”
To contact the editor responsible for this story: Mark Silva in Washington at firstname.lastname@example.org