Why Business Hates ClintonRichard S. Dunham
As the 103rd Congress whimpers to a close amid the familiar sounds of crashing legislation and partisan bombast, a grim President Clinton is licking the wounds he suffered at the hands of increasingly balky lawmakers. But if Clinton has had a rough year on Capitol Hill, corporate lobbyists are positively aglow over the legislation they got passed--or, in the case of health-care reform--managed to kill.
Therein lies a key irony of the Clinton Presidency: Despite his best efforts to woo them, Corporate America's top executives have nothing good to say about President Clinton. A BUSINESS WEEK/Harris Poll of 400 senior executives, conducted from Sept. 19 to Sept. 26, finds that 85% of them disapprove of the President's handling of the economy. They give the Administration especially poor marks on creating jobs, reining in government spending, and promoting economic growth. In general, American executives simply don't have faith in the President's ability to lead.
At the heart of big business' visceral disdain for Clinton is the health-care debacle. That legislative defeat left many CEOs convinced that, beneath the President's New Democratic trappings, there still lurks the heartbeat of a traditional liberal. "From time to time, like with NAFTA, Clinton does things that no Old Democrat would do," says Edgar S. Woolard Jr., chairman and CEO of DuPont Co. "For most of us, it doesn't happen frequently enough. There's still a propensity to look for a big-government solution."
Corporate America's downbeat assessment of Clinton comes after two years of impressive gains for business in Washington. Case in point: the budget. Last year, the President spurned liberal advisers' pleas for costly social spending and made deficit reduction his top goal. His plan helped drive down long-term interest rates, fueling the expansion. Says Salomon Inc. CEO Robert E. Denham: "Clinton dealt responsibly with the budget." Not according to most of his colleagues: Some 82% of those polled said Clinton had done only a fair or a poor job of ensuring economic growth.
Clinton's record on trade expansion has been equally bold. First, he risked civil war within his own party to seal NAFTA. This year, he's fighting hard for a new General Agreement on Tariffs & Trade. And Clinton extended China's most-favored nation trade status and paved the way for U.S. investment in a booming Vietnam. The Administration's trade push, says Texas Instruments CEO Jerry R. Junkins, "will mean more exports, more jobs, and a stronger economy."
For his efforts, Clinton gets some grudging credit from Corporate America. Slightly more than half of those polled thought he had done well at achieving fair trade--though his marks on dealing with Japan are decidedly lower. Clinton's trade efforts haven't won him much support from partisan legislators, though. By embracing GATT and NAFTA, the President essentially adopted Republican policies. Yet earlier this year, Hill Republicans threatened to sink GATT unless the White House made key concessions. GOP obstructionism became so intense that a delegation of Business Roundtable leaders had to urge Senate Minority Leader Bob Dole (R-Kan.) to knock off the games and support the pact. He did.
Clinton's belief in industrial policy--nurtured during his days as Arkansas' governor--turned him into American business' top salesman. Commerce Secretary Ronald H. Brown has become a roving pitchman for U.S. exports, and the Administration nailed down lucrative foreign contracts for U.S. multinationals hawking airliners, telecommunications gear, oil-drilling equipment, and auto parts. Brown & Co. are "working as hard as anybody has ever worked on selling American business," says John F. Welch Jr., chairman and CEO of General Electric Co. Boeing CEO Frank A. Shrontz agrees. The Clintonites are much more willing to advance U.S. commercial interests abroad, he says: "They're not free-market ideologues."
Corporate America did fine riding in tandem with Clinton. But it did equally well when they diverged. Take the Administration's drive for a new national health system, to be partly funded by mandates on employers. Although CEOs of old-line manufacturing industries initially backed reform, strong business opposition to the plan's rigid bureaucratic structure helped defeat the President's top domestic initiative.
Despite Clinton's endorsement, business easily turned back an AFL-CIO bill that would have barred the hiring of permanent replacements for striking workers. Indeed, most of labor's legislative agenda, from hiking the minimum wage to beefing up the Occupational Safety & Health Administration, went nowhere on the Hill.
Business would have fared even better had some of its pet issues not gotten caught in a partisan crossfire. GOP scorched-earth tactics could sink business-backed legislation to revamp the Superfund toxic-waste cleanup program. "There's no ideological reason to hold this up," says the American Insurance Assn.'s Michael McGavick. "The only gain is popping Clinton in the nose again."
CHANGES AHEAD. These injuries from friendly fire aside, Corporate America has won the best of both worlds by shrewdly playing on divisions within Hill Democrats. On trade issues, business teamed up with Clinton and his party's free-trade minority to defeat protectionists. Then, on health reform, a bloc of Democratic centrists joined forces with Republicans to defeat the Administration. Business lobbyists came to realize that in today's Congress, the balance of power is held by younger, pro-business Democrats. "These newly elected Democrats don't have 30 years of New Deal and Great Society in them," says Senator Bob Packwood (R-Ore.). "They are more familiar with business and more concerned about regulation."
The influence of probusiness centrists will grow next year, since the midterm elections in November should produce a far more conservative Congress. "If the President wants to make real policy changes, he'll have to move to the center," predicts Representative Michael A. Andrews (D-Tex.).
Such a shift could improve odds for legislation that would grant companies greater power to challenge government regulations, ease the burden of product-liability suits, and put in place modest health-insurance reforms. Never one to stick to a hopeless position, the President may well embrace some of these initiatives.
Even so, he's unlikely to get much credit. House Ways & Means Committee Chairman Sam M. Gibbons (D-Fla.) chalks up the antipathy more to business' "upper-income attachment to the Republican party than anything else." But it still gets under the President's skin. On Sept. 25, he told a New York audience that "the American people, with this sort of partisan, negative pounding...do not know what we've done." When it comes to the sentiment in America's boardrooms, he may have a point.
WASHINGTON'S BUSINESS AGENDA
TRADE Clinton's support helped win congressional passage for NAFTA, and likely passage for GATT in the face of spirited opposition.
EXPORT PROMOTION Among other efforts, Commerce Secretary Ron Brown announced $6 billion in export deals during his recent China mission, and helped seal a $4 billion deal for AT&T in Saudi Arabia.
BANKING Though banks are under Administration pressure to step up lending to minorities, financial institutions hit a home run with passage of the interstate banking bill. And Clinton's community development banking initiative gave the industry relief from federal red tape.
TELECOMMUNICATIONS A bipartisan compromise designed to overhaul telecom regulations died after eleventh-hour lobbying from regional phone companies, who said it was tilted toward long-distance competitors.
HEALTH Health reform was buried under an avalanche of business complaints that it was too bureaucratic and too expensive.