White House’s Daley seeks balance in outreach meeting with manufacturers

June 16, 2011

It was supposed to be the White House’s latest make-nice session with corporate America — a visit by Chief of Staff William M. Daley to a meeting with hundreds of manufacturing executives in town to press lawmakers for looser regulations.

But the outreach soon turned into a rare public dressing down of the president’s policies with his highest-ranking aide.

One by one, exasperated executives stood to air their grievances on environmental regulations and stalled free-trade deals. And Daley, the former banker tasked with building ties with industry, found himself looking for the right balance between empathy and defending his boss.

At one point, the room erupted in applause when Massachusetts manufacturing executive Doug Starrett, his voice shaking with emotion, accused the administration of blocking construction on one of his facilities to protect fish, saying government “throws sand into the gears of progress.”

Daley said he did not have many good answers, appearing to throw up his hands in frustration at what he called “bureaucratic stuff that’s hard to defend.”

“Sometimes you can’t defend the indefensible,” he said.

The exchange suggests the limits of the elaborate courtship of corporations begun by President Obama and his top aides after Democrats’ big losses in the 2010 elections — an effort that has taken on new urgency in recent weeks.

Top aides have been reaching out to business leaders as Obama’s reelection campaign seeks to expand its network of potential new donors and fundraisers. And the White House has hoped that a closer alliance with businesses would help spur job growth.

Even as the White House pledges more receptivity to corporate concerns, business continues to spar with the administration on numerous fronts.

Wall Street is lobbying to undo many of the new regulations signed into law last year. Manufacturers say environmental policies are hindering growth. And, in a high-profile case that tests the administration’s allegiances, aerospace giant Boeing is warring with labor regulators over its decision to open a plant in South Carolina, which is hostile to unions.

In his speech and during a question-and-answer session Thursday, Daley laid out the administration’s efforts to help business, promoting Obama’s support for changing the corporate tax structure and for new free trade agreements.

He pointed to the administration’s effort, led by regulatory czar Cass Sunstein, to identify hundreds of rules that could be costing businesses money and time.

When a paper company executive said Environmental Protection Agency regulations might cost her $10 million to $15 million to upgrade a mill, Daley said the number of rules and regulations “that come out of agencies is overwhelming.”

Later, he added: “We’re trying to bring some rationality to it.”

Daley’s appearance before Thursday’s meeting of the National Association of Manufacturers was an unusual public appearance for Obama’s relatively new chief of staff. He invited the executives to offer candid views and extended the question-and-answer session, at one point joking, “I’ll probably regret saying that.”

He acknowledged the touchy political calculation the White House faces as Obama tries to promote his economic record on the campaign trail while being sensitive to the reality that many Americans are struggling. This month, the White House was thrown a political curveball with a surprisingly glum jobs report in which the unemployment rate ticked up to 9.1 percent, giving several of Obama’s potential GOP rivals an opening to attack his leadership.

“You can’t sound Pollyannaish,” Daley told the business leaders. “I believe this economy of ours is better than the perception right now.”

Daley offered blunt assessments on key issues of interest to executives in the room.

On the status of free-trade agreements with South Korea, Panama and Colombia, he suggested politics was proving to be a challenge. He said there are “people who lose from these agreements” and urged businesses to lobby their workers to help overcome opposition on Capitol Hill.

“No politician loses an election because they voted against trade,” he said.

On lowering the corporate tax rate, a top goal of business groups, Daley said again, “there are winners and losers.” He warned that some small businesses might face a tax increase.

Mary Andringa, head of NAM, described the meeting as “constructive” and was “quite pleased” that Daley devoted more than an hour to the group’s concerns.

But some business executives in the room said they were unimpressed by the White House’s attempts to woo industry.

“We think there’s a thin facade by the administration to say the right things, but they don’t come close to doing things,” said Barney T. Bishop III, chief executive of the business group Associated Industries of Florida. He called the efforts to streamline regulations “immaterial.”

“We love the platitudes, but we want to see action,” Bishop said.

White House officials described Thursday’s encounter as part of a work in progress. Spokesman Eric Schultz described the meeting as a “frank and open conversation . . . about steps we can take to drive private-sector job growth.”

Daley said afterward that he’s sympathetic to the gripes he heard. “This is a practical world you’ve got to live in,” he said. “These people run businesses.”

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