President Barack Obama extended his latest peace offering to businesses in a venue where he often finds himself the target of criticism: The op-ed section of the Wall Street Journal.
Obama used those pages yesterday to write his own article making the case that his administration is addressing outmoded federal regulations that impede economic growth. While praising moves like the financial market overhaul he signed last year, Obama said the government sometimes places “unreasonable burdens on business” that have a “chilling effect on growth and jobs.” He also signed an executive order calling for a government-wide review of regulations to remove or revise those that stifle economic expansion without helping consumers.
“We are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb,” Obama wrote.
Business associations offered tepid praise, calling the review a first step, while environmentalists and other Democratic-leaning groups voiced concern the White House was trying to placate corporate America.
The executive order doesn’t cover a number of agencies that oversee markets, including the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Federal Deposit Insurance Corp., leading Republican critics to voice skepticism about Obama’s commitment to reviewing policies such as the new financial rules that they say hinder growth.
“You have to question whether this plan is really about creating jobs -- or just headlines -- when it exempts some of the agencies that impact our economy the most,” said Brendan Buck, a spokesman for House Speaker John Boehner.
‘The Right Tone’
The Journal op-ed, Obama’s first for the newspaper as president, and the executive order marked the latest in a series of moves since the midterm elections -- that he called a “shellacking” for Democrats -- to reach out to business leaders in an effort to encourage them to restart hiring and reduce the U.S. unemployment rate of 9.4 percent.
During the first half of Obama’s term, the business community, including the U.S. Chamber of Commerce, frequently sparred with the administration, saying it adopted a hostile tone toward companies and enacted sweeping laws on health care and finance that created an onerous regulatory environment. Shortly after the election, Obama said he would set “the right tone publicly” with businesses.
Included in those overtures were his push to extend Bush-era tax cuts that he had campaigned against, a trade deal with South Korea, the appointment of former JPMorgan Chase & Co. executive William Daley as chief of staff, and a planned Feb. 7 speech to discuss job creation before the Chamber of Commerce.
‘Heard the Message’
Obama’s new regulatory focus is another step in a pro-growth strategy that was lacking the past two years, said Ken Duberstein, who was chief of staff to President Ronald Reagan.
“The number one concern of the American people is jobs, and what they expect of our government is to do nothing that thwarts the possibility of job creation,” Duberstein said. “The fact that President Obama has heard the message from business leaders and from the public is a sign that he wants to reach out and govern much more inclusively.”
Obama signed the executive order the same day Chinese President Hu Jintao arrived in Washington for a state visit focused on U.S.-China business ties. The two leaders will meet today with executives including General Electric Co. Chief Executive Officer Jeffrey Immelt, Boeing Co. CEO Jim McNerney and Goldman Sachs Group Inc. CEO Lloyd Blankfein, to discuss boosting exports and spurring job growth.
Later this week, Obama will travel to Schenectady, New York, home to GE’s largest energy division, and tour the site with Immelt. The president will deliver a speech on strengthening U.S. competitiveness -- a theme he’ll echo during next week’s State of the Union address and one he discussed with executives at a December meeting in Washington.
During that 4 1/2-hour meeting last month, Obama and the corporate leaders, who included United Parcel Service Inc. CEO Scott Davis, McNerney and Immelt, discussed how regulatory policies can be hurdles to an expansion and agreed to work together, according to one participant.
Too much regulation in a weak economy with high unemployment creates uncertainty that hurts confidence, the executives told the president, the person said.
Obama reflected that sentiment yesterday. “This order requires that federal agencies ensure that regulations protect our safety, health, and environment while promoting economic growth,” he wrote in the Journal, whose editorial pages have criticized his policies, including the health law, which it calls “ObamaCare.” He added: “We are seeking more affordable, less intrusive means to achieve the same ends.”
‘Positive First Step’
Tom Donohue, the president of the Chamber of Commerce, called it a “positive first step” and pledged to work with the administration to “advance commonsense regulatory-reform measures.” Still, he called for a “fundamental reform” of the regulatory system and included in that Obama’s health and finance laws.
John Engler, president of the Business Roundtable, an association of 193 chief executives, said Obama’s regulatory review signaled “an important change in direction.”
Donohue and the Business Roundtable have eased off on criticism since Obama’s recent business overtures.
Ivan Seidenberg, CEO of Verizon Communications Inc. and chairman of the Business Roundtable, praised Obama during a Dec. 8 news conference for “a willingness to learn” after the president agreed to keep the tax cuts for high-income families. Six months earlier, Seidenberg had complained that Obama’s policies were creating “an increasingly hostile environment for investment and job creation.”
Stocks, Profits Grow
U.S. stocks have climbed since Obama agreed with Republican lawmakers in December to extend those tax reductions. The Standard & Poor’s 500 Index has risen for seven straight weeks, the longest winning streak since May 2007.
U.S. corporate profits in the third quarter of 2010 exceeded the 2006 high reached before the recession. Optimism about the economy among CEOs of the largest companies rose in the fourth quarter to the highest level since the start of 2006 as business leaders projected increased sales, investment and hiring, according to a Business Roundtable survey.
House Majority Leader Eric Cantor, a Virginia Republican, said Obama’s plan is a modest first step to address “out-of-control and costly bureaucratic rules.”
The executive order “shows that he heard the same message I did in the last election, that Americans are sick and tired of Washington’s excessive overreach and overspending,” Cantor said in a statement. “While I applaud his efforts on this new executive order today, we must go further.”
The review drew criticism from progressive groups.
“This is the wrong way to think about regulation, and it is the wrong direction for the American people,” said Robert Weissman, president of Public Citizen, a Washington-based consumer advocacy group. “The administration should be preparing for a major fight to implement effective public protections on behalf of the American people -- not echoing the Big Business’ talking points.”
The executive order is likely to have a greater influence on decision-making in the bureaucracy than case-by-case decisions because it provides explicit guidance for agencies. It also requires agencies to subject existing rules to the same cost-benefit analysis that’s required now of new regulations.
Yesterday’s op-ed won’t be the last time Obama appears in a news outlet that’s critical of his policies. The president will sit down for an interview with Fox News Channel host Bill O’Reilly before the Feb. 6 Super Bowl, which News Corp.’s Fox network is broadcasting.