Obama's Message to Big Business: The Economy is Doing Just Fine
Talk to lobbyists and business executives who deal with the Obama administration and they'll tell you about a constant, if quiet, refrain coming out of the White House over the past year or so: you may not like all of our policies, but at least we're not crazy like the other guys.
President Barack Obama hinted at the idea—an implicit shot at the the most conservative Republicans in Congress—Wednesday during a lengthy question-and-answer session with chief executive officers at the Business Roundtable in Washington. It's not the central tenet of the administration's efforts to mend its poor ties with segments of the business community, but it's part of the pitch and one that has gained some traction in the wake the October 2013 government shutdown and the brinksmanship that brought the country to the edge of default. It's one that's also earning greater resonance from the possibility, however remote, of another government shutdown as Republicans look for an avenue to push back on Obama's unilateral immigration action. (You may have noticed an official White House Twitter account or two tweeting out stories about certain Republicans talking about pathways that would lead to a shutdown. It's not because they're fans of the writing.)
"We just cannot afford to engage in that kind of brinksmanship that we saw over the last couple years," Obama told the top executives. "Each time that happened, consumer sentiment plunged, it was a self-inflicted wound, and we had to dig ourselves back out of a hole, despite all the efforts that had been made, simply because people’s confidence in the system overall was shaken. So my strong hope is, is that we don’t repeat that."
Republican leaders have dismissed the idea that there will be another government shutdown and laid the blame for the gridlock that has kept the business community on edge in recent years at Obama's doorstep—something midterm voters appeared to agree with in November. Incoming-Senate Majority Leader Mitch McConnell called the election a "butt-kicking" on Tuesday and said that while there are areas of agreement that may be possible to pursue in the months ahead, there's a reason the president's relationship with the business community has faced so much criticism.
"We've had a tutorial here over the last six years over spending, borrowing, taxing and over-regulation," McConnell, a Kentucky Republican, said at the Wall Street Journal's CEO Council. He called on business leaders, specifically on the issue of tax reform, to lobby the White House to come closer to Republican positions. McConnell and Obama held a rare one-on-one meeting Wednesday, but neither side provided details of their talk. Don Stewart, McConnell's spokesman, simply called it "a good meeting."
The administration's central point, emphasized by Obama on the campaign trail before the midterms and again to the CEOs, is that the U.S. economic recovery is real, and better than any other developed country in the world. As White House officials are quick to point out, employment is up by an average of 229,000 per month this year. Since the president took office, the S&P 500 has risen more than 150 percent. Corporate profits are soaring. The 3.9 percent rate of GDP growth last quarter followed a 4.6 percent increase in the previous three months, marking the biggest back-to-back gains since late 2003. It's a story Obama and his team say doesn't get nearly enough attention.
"I will say that’s one of the frustrating things about Washington, is people are really good about hollering about problems, and then when we solve them, nobody talks about them," Obama said. The top-line economic numbers have allowed corporate interests to thrive in the years following the worst economic crisis since the Great Depression.
Still, there are no shortages of Obama-driven policies that will produce a rant-like response from K-Streeters and Wall Streeters alike. From the environmental regulations to the ongoing implementation of Affordable Care Act and Dodd-Frank rules, there are laundry lists of changes to Obama policies lobbyists across the city are pushing. Business groups, most notably the U.S. Chamber of Commerce, went all out to ensure the defeat of many of Obama's Democratic Senate allies in the midterm elections. (The chamber's political operation, which deserves significant credit for its role in swinging the Senate into Republican hands, also did its part to knock off any GOP primary candidates that would fall into that "crazy" category cited by the White House.) Those campaign efforts came in the wake of what many corporate leaders viewed as an anti-business re-election campaign for Obama in 2012. That means there is some serious mending of fences needed.
The administration is arguing that it can be a stronger ally than the traditionally business-friendly GOP. A good metric that encapsulates where the White House is right now appears to be "compared to what." Sure, on the regulatory side, particularly through rules coming out the Environmental Protection Agency, there are major areas of disagreement. But compared to pockets of the Republican Party who want to do away with the Export-Import Bank, or block the immigration reform that business has stood so steadfastly behind, or the battle over raising the debt ceiling again, perhaps the White House doesn’t look so bad.
Obama on Wednesday outlined a tentative 2015 agenda that tracked closely with the one laid out by the Business Roundtable. Tax reform. Infrastructure spending. Immigration reform. Trade deals. Those are issues with Republican support and possible pathways forward on Capitol Hill (though even Obama acknowledged immigration would be moving to the backburner to let temperatures "cool a little bit in the wake of my executive action.") That's important for one reason: what the business community really wants is for Washington—all of its institutions—to get stuff done. All of the lobbying, whether in 70-minute sessions at the Business Roundtable or through quiet messages behind closed doors, doesn't change that fact. It's something Obama and his team are keenly aware of, as well.
"There are some common-sense things that we should be doing that we’re not doing, and the reason, primarily, is because of politics and ideological gridlock," Obama said. "But I suspect that if we surveyed folks here, regardless of your party affiliation, you’d say, let’s get this done."
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