Obama and Big Business Trade Blame on the Economy
Kenneth T. Walsh

The war between the White House and big business is getting worse. Tom Donohue, CEO of the U.S. Chamber of Commerce, fired the latest salvo last week when he warned that President Obama's policies, including new government regulations and vast government spending, are slowing growth and stalling job creation. Like many other business leaders, Donohue argues that the administration is meddling too much in the economy and creating uncertainty that is causing executives to cut back on expansion and hiring. "Taken collectively," he says, "the regulatory activity now underway is so overwhelming, and beyond anything we have ever seen, that we risk moving this country away from a government of the people to a government of regulators." He particularly objects to proposed tax increases on individuals and businesses, and to the expanding federal role in healthcare, finance, energy use, and consumer protection.

These comments follow the remarks of Verizon CEO and Business Roundtable Chairman Ivan Seidenberg, who said that by "reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses. And General Electric CEO Jeff Immelt told the Financial Times that government's overregulation was hurting economic recovery and that "business did not like the U.S. president, and the president did not like business."

Overall, says a prominent Republican strategist who is advising congressional candidates, many business executives were willing to give Obama the benefit of the doubt at first, hoping he would turn out to be a pragmatic centrist like Bill Clinton. Now those doubts are gone. "The administration's approach to business is radical and punitive," he says.

The administration is fighting back. In a letter to the chamber, White House Chief of Staff Rahm Emanuel and White House senior adviser Valerie Jarrett said business leaders are being too harsh and divisive. "The stakes are far too high for us to be working against one another," the two White House officials argued. "That is why we were surprised and disappointed at the rhetoric we have heard from some in the business community." Their letter added: "We will not, however, accept a return to the lax regulation of the financial industry that contributed the worst economic crisis since the Great Depression. And we will not stand by while oil and gas companies continue to fight needed changes to the outdated regulations that are partially responsible for one of the worst environmental crises in American history" -- the massive oil leak in the Gulf of Mexico.

For his part, Obama has been aggressive in condemning what he considers abusive or unwise practices by big business, especially Wall Street investment houses, the insurance industry, and, of course, oil companies like BP, which is responsible for the catastrophic mess in the Gulf. He did this in his recent fund-raising appearances for Democratic Senate candidate Robin Carnahan in Missouri and for Senate Majority Leader Harry Reid in Nevada. White House aides say he will take the same approach right through the November 2 elections.

But Obama isn't expected to wage an all-out campaign against business interests. "He isn't the kind of guy to pick fights," says a friend. "His instinct is to find compromise." In fact, on the same day that the chamber was blasting him, Obama was meeting at the White House with billionaire investor Warren Buffett to discuss ways to bolster the economy.

One fear among Democrats is that corporate America will greatly increase its spending in this fall's campaigns, funneling what White House Press Secretary Robert Gibbs predicts will be "tens of millions of dollars" against Democratic candidates. This could turn key races toward the Republicans and might even cost the Democrats control of the House or the Senate.

But there's another complication. Many liberals, a core constituency of the party, want more government pushback against big business, not less, and they are disappointed that the White House isn't being tough enough. Their argument is that the government has given bailouts to Wall Street, auto companies, and irresponsible mortgage holders, and spent billions on pork-barrel projects, while middle-class Americans who play by the rules have gotten short shrift.

If those activists stay home in a snit in November, the Democrats will suffer enormous losses.

Obama and Big Business Trade Blame on the Economy

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