Obama Intensifies CEO Outreach as Tea Party Draws Business Ire
During a meeting in the West Wing of the White House this month, President Barack Obama’s aides posed an unusual question to business leaders across the table: How can the administration help House Speaker John Boehner?
Obama’s interest in helping Boehner is part of a broader White House effort to enlist executives to support Republicans who are willing to deal with the administration. It’s also aimed at exposing divisions within the opposition party.
The White House session sought to coordinate efforts to pass immigration legislation, an achievement that would boost the electoral chances of some of Boehner’s Republicans even as it sparks opposition from Tea Party lawmakers.
As corporate America grows frustrated with Tea Party influence over Republican leaders, the president, who in his first term once derided “fat-cat bankers on Wall Street,” is now reaching out to chief executive officers for help on issues from the budget to immigration laws.
“The White House and Democratic leadership are certainly appealing to the business community’s disenchantment with the GOP,” said Kathryn Wylde, CEO of the Partnership for New York City, an association of leaders of companies, including Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co.
One result could be the isolation of the Tea Party from businesspeople, donors and the Republican Party itself.
After years of a fractured relationship and fitful efforts to mend ties, Obama has had no fewer than five meetings and a conference call with CEOs since the start of October, according to an administration official. He spoke to a business gathering on Oct. 31 and yesterday at a Wall Street Journal CEO Summit.
Among the CEOs who have met with him are Lloyd Blankfein of Goldman Sachs and Stephen Schwarzman of Blackstone Group. (BX) Schwarzman once said a fight with the administration over raising taxes on private-equity firms was “like when Hitler invaded Poland in 1939,” according to Newsweek magazine.
Business groups such as the National Retail Federation and the U.S. Chamber of Commerce have signaled they’ll become more engaged in combating the rise of the Tea Party, funding primary challenges to hardliners in next year’s congressional elections.
Scott Reed, senior political strategist for the chamber, said last month there’s a need “now more than ever to elect people who understand the free market and not silliness.”
“Business is tightening the purse strings and putting pressure on the GOP leaders,” Wylde said. “But I would not say it is in response to Democratic tactics so much as their disillusionment with the whole Washington, D.C., scene.”
The White House has reached out to the business community before with little to show for it. Some executives said there was a sense in the past that Obama was going through the motions with them, as he pushed for new financial rules and urged companies to spend their $1.8 trillion in cash to boost hiring.
Relations soured as financial institutions fought the administration’s campaign to curb executive pay, establish the Consumer Financial Protection Bureau and enact the Volcker rule, which bans proprietary trading.
Frustrations also rose when Obama rejected the deficit-cutting recommendations of his own fiscal commission. And there were complaints that the increased regulations coming out of Washington hindered job creation.
Since 2010, the Chamber of Commerce has hung four, two-story-tall banners outside its headquarters facing the White House, spelling out “JOBS.”
Obama called the bonuses for “fat-cat bankers” at financial institutions that received bailout funds “shameful” and criticized them for fighting new regulation as the economy was reeling from the financial crisis in 2009.
While the executives interviewed voiced optimism that the new bid to repair relations isn’t a public relations stunt, they said Obama’s recent stumbles could overtake his domestic agenda.
The fumbled roll-out of the health-care law has helped Republicans rebound politically from the October government shutdown, putting the focus now on Obamacare’s flaws. There may be little pressure now for them to vote for Obama’s immigration package.
“We have no intention of ever going to conference on the Senate bill,” Boehner, an Ohio Republican, said last week of legislation passed in June by the Democratic-majority Senate that offers a path to legal status for the estimated 11 million undocumented immigrants in the U.S.
If the administration is looking to convince the business community to pressure Boehner and his leadership, the Fortune 500 CEOs it has enlisted in the effort have so far shown little sway over Republican hardliners.
“I’m not sure if it’s going to work,” said John Feehery, a former aide to House Republican leaders and now a party strategist. “The business community sees the Tea Party as a threat; they also see the Obama agenda as a threat.”
That hasn’t stopped the executives from talking with the White House. Blackstone’s Schwarzman was among several CEOs with whom Obama met on Nov. 5 to talk about immigration.
The group also included: Donald Thompson of McDonald’s Corp., Arne Sorenson of Marriott International (MAR) Inc.; Greg Brown of Motorola Solutions Inc. (MSI); Joe Echevarria of Deloitte LLP; Marillyn Hewson of Lockheed Martin Corp. (LMT); Ed Rust of State Farm Mutual Automobile Insurance Co.; and Roger Altman, co-founder of Evercore Partners Inc. (EVR)
“We have a fascinating cross-section of people -- some unlikely bedfellows, some very liberal folks, some very conservative folks -- who all believe that now is the time to get this done,” Obama told reporters as the meeting began.
In the last six weeks, White House aides such as senior adviser Valerie Jarrett, chief of staff Denis McDonough and National Economic Council Director Gene Sperling have met 10 times with CEOs and trade groups, according to the administration official, who asked for anonymity because the meetings were private.
Treasury Secretary Jacob Lew has held talks and calls with dozens of executives. While meetings in September and October centered on the budget, Lew says the administration and Democrats are more aligned with business priorities.
“There’s been a bit of an evolution of the parties in this country,” Lew said yesterday at the Wall Street Journal-sponsored CEO summit. “Businesses thought we were listening to them in September and October. What I heard them saying was, ‘We go to the Hill and we don’t think people are listening to us.’”
“The White House has spent a lot of effort improving what started off as not a very strong relationship with the business community,” said Maya MacGuineas, head of the Campaign to Fix the Debt, a coalition that includes business leaders and lawmakers that has met at the White House on fiscal matters.
Participants in the White House calls and meetings say officials have been more proactive and smarter about bringing in executives around specific issues. Meetings at the staff level often are followed up by presidential sessions, they say.
Rather than disparaging Boehner, Republican Majority Leader Eric Cantor and Majority Whip Kevin McCarthy, the president and his aides are complimentary and respectful, according to one CEO who was on recent budget and immigration calls and asked for anonymity because the sessions were private.
The House leadership isn’t part of the problem, Obama’s aides say. They focus their criticism on the small group of hardliners thwarting progress on policy fronts, the CEO said.
While the executive said the enhanced outreach might not produce much, he said communication helps establish trust, which can be leveraged at the appropriate time.
Tea Party supporters dismiss the outreach effort.
“If the entrenched corporate elites are in favor of competition and entrepreneurship, they have no better friends than conservatives,” Michael Needham, chief executive officer of Heritage Action for America, a political advocacy group that promotes small government, said in a statement. “If, however, they are interested in favors and kickbacks, they should return the president’s overtures.”
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